Hello! My Fiancé and myself are newbie real estate investors. We currently own a condo that we rent out, and are under contract to buy our second property, a two-family home.
A quick overview of the property:
- The home was built in 1813, and looks to have some additions built throughout the years
- The units are side by side
- Oil heat
- No AC
- Septic Tank
- Public Water
- Rental income of $2800 per month combined
- Offer Price: $265K (based on expectations that the home will need all new windows and one new oil tank)
We just had our home inspection today and learned that there are some framing issues in both the attic (supporting the roof) and the basement. The roof is a gable roof, and our inspector pointed out that the framing was not done properly. From the outside of the home, you can see some "give" in the roof line, and we attribute this to the framing issues. Our inspector's recommendation would be to have a professional framer come and reframe the attic/roof in about 10 years, at the same time a new roof will be required.
In regards to the basement, there was major powder post beetle and termite damage in the supporting beams of the home. It does not look like there was ever any treatment done at any point to fix the issue, and some of the beams are completely rotted through. Also, in the basement, our inspector found pipes coming from one of the foundation walls, which led him to believe that there could possibly be an underground storage tank. The foundation itself seems like it is in fine condition.
Based on the details above, we would love to understand people's point of views on if this is a good deal or not and/or something that we should undertake.
Looking forward to read your responses! Thank you.
Hi Rachel, you described yourselves as 'newbies'-right? When you say 'under contract' that to me means you can still walk away? You are not complete newbies, you had an inspection done and you have an out. Lots of investors miss that step. That property sounds pretty extreme. If you are going to look for funding, a post and beam foundation will likely not pass the lender's requirements. If it were me I would continue to look for another, better deal. They are out there, just harder to find in this over bought market! All the best!
@Bjorn Ahlblad Hi Bjorn, thank you so much for your reply! Very helpful.
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