Investor · Olympia, WA · Member since 2017 · 4 posts · 0 votes
I am getting back in to investing after buying 3 SFR in Washington 8 years ago. We are looking out of state with my son. We have made an offer on a 4 plex, built in 1900, in Wisconsin and just received the inspection report. The It lists several problems:
1. Sewer pipe on north wall west side in basement leaking.
2. Northeast corner of roof has corner cap missing and is believed to be the entry point for wildlife to get in.
3. Recommend a qualified structural contractor repair back outdoor steps and balconies to code.
a. Loose railing, improper attachment, cracked treads, moss growth, stringer cracks, stringer improperly attached to the trimmer.
4. No CO detector in each unit.
5. Bathroom vents vent into attic space.
These are the highlights. Should I have the seller fix these problems before purchasing, renegotiate with the seller, or fix the items myself?
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
7y
@Glenn Gerth seems like relatively minor issues compared to what I see sometimes.
I usually discuss these issues with the listing agent and find out what the sellers preference is. Usually as a buyer, in particular out of State, having the repairs done by the seller before closing is you first option. Make sure that your agent is very specific in the definition of what and how repairs are done. Duct tape does not count.
Your second best choice would be to ask for a closing cost credit, as it has cash value to you. Asking for a price reduction is third, as it will not impact your cashflow very much.
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
7y
@Glenn Gerth seems like relatively minor issues compared to what I see sometimes.
I usually discuss these issues with the listing agent and find out what the sellers preference is. Usually as a buyer, in particular out of State, having the repairs done by the seller before closing is you first option. Make sure that your agent is very specific in the definition of what and how repairs are done. Duct tape does not count.
Your second best choice would be to ask for a closing cost credit, as it has cash value to you. Asking for a price reduction is third, as it will not impact your cashflow very much.
Rental Property Investor · West Bend, WI · Member since 2015 · 931 posts · 598 votes
7y
@Marcus Auerbach gives great advice! I would add if you have boots on the ground near the property that would charge a reasonable rate to make the repairs after closing, you could negotiate a discount more than the cost of the repairs, giving you more control of how the repairs are done, but either way the items will need to be addressed. For me I would rather have the discount and control, but if you can get the seller to do the repairs there is nothing wrong with that, the terms of asking for repairs should include "Licensed contractor" and "in a Workman like manner" if you have the seller complete repairs.
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
7y
@Glenn Gerth. These seem pretty minor to me. They don’t all have to be addressed immediately I would say. Get a rough estimate for cost to fix and get that as a seller credit from seller. It’s unlikely they’ll pay to have it all fixed but you want to do it yourself post closing not the other way around.
Never allow a seller to do repairs, quality will be very low, probably need to be redone. I prefer a buyer ask me to do repairs since I can usually get away with a bit of spit and tape. It is very simple to polish a turd but unfortunately the shine rarely lasts.
You always ask for a discount and be prepared to walk away from the deal.
Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
7y
100% agree with @Thomas S. Renegotiate the terms if you want, and have someone, of your choosing, do the repairs. The seller will always go with the cheapest option, and never the best option.
Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
7y
After closing 1,000+ sales over the last 30 years let me give you a hint or three from my own experience: 1. Get a few estimates to have the work done. 2. Ask the seller for more than the cost of the repairs in a price adjustment/credit. 3. Don't settle for less than the full amount of your chosen estimate (unless it's such a super hot deal that you can't pass).
Remember, no seller will take the care in getting the issues fixed for a sale that the buyer will. The main thing on a seller's mind is getting it closed. So NEVER ask he seller to do repairs. Get the adjustment/credit.
Keep in mind--in any negotiation, the one who wants it most, LOOSES.