Under contract -1st out of state deal, insight welcome - Thanks

2 Replies

Would like some advice on this deal - thank you in advance 

SFH under contract for $106k (current owners purchased a year ago for $59k and did lipstick on a pig) - neighbourhood nice b /class neighbourhood - no crime

Inspection brought up a few things 

Asbestos tiles in the basement, im told they are fine but I would prob want to epoxy over them to be safe though not needed I just dont want to have anyone at risk ($1500)

Roof will need to be replaced in the next 1-2 years ($8-9kish)

Garage door needs to be replaced ($700)

Stairs and driveway need to be addressed ($2k)

Had drain scoped needs to be cleaned out ($500)

AC is working but on the way out ($2k)

a few windows needs to be replaced and smaller stuff etc - looking around 15-20k out of pocket to get home up and running 

Now all done up this home will appraise for $120-125k and rent for 1400 a month

however and I understand the sellers want to make some money (home was sitting on the market for awhile) but this is a pretty big list of big expenses and while I dont mind taking them on to be all in with zero meat on the bone from an equity standpoint seems not ideal as I will be locking around 40-45k up in the property.

Insight appreciated - thank you for getting this far

@ChristianWeber I see you have 3 choices: 

1-Accept as is and eat it(not recommended)

2-Walk away and learn to spot some of the issues before you pay for an inspection. 

3-Ask for cash back at closing to cover things in report, start around $15k-$17k looking at your numbers. You could use the money after closing to address the most pressing issues. I wouldn't go with less than $10k back at closing. 

Good luck!

I don't see the metrics here. If they did a lipstick flip, why are you paying the spread of 47k? Are you sure the deal is that good? Doesn't seem like it. If it was sitting on the market for a while, ask yourself why. Why did others pass? It's probably because the spread is too much and they did nothing special. Where do you get 2k for AC? Is that central air that needs to be replaced, a new compressor? That's not 2k. Also the drain needing to be scoped do you mean the sewer line? What if it needs more than scope and a full relining if it's clay? That can run 15k. Was the property marketed as-is?

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