House hack with bad roof
Member since 2025 · 16 posts · 10 votes
House hack with bad roof
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Aaron ZimmermanBusiness Member
Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votesI'd check with an insurance agent first. $10k for a new roof in the grand scheme of things would not be much. If anything, I'd raise the price and then have seller credits to offset. If it cash Flows upon move out, that's a huge win. If everything else checks out, I'd continue to make this deal work
Brick House CPAs53 Reviews
5 Replies
- Member since 2026 · 9 posts · 5 votes6mo
Before jumping to a decision, I’d probably ask a couple things that would change how I look at the deal:
First, how old is the roof exactly and what did the inspector actually say? Sometimes inspectors say “may not be insurable” but insurers will still write a policy if it has a few years of life left.
Second, did you already check with an insurance agent? Sometimes they’ll say “replace within 1–2 years” instead of requiring it immediately.
Third, how tight are your numbers after reserves? If you’re only clearing $200–$400/month with market rents, does that include setting aside money monthly for capital expenses like roofs, furnaces, etc.?
Also, what’s the actual value of the property in your opinion? Not just the listing price. If similar multis in that area are selling for $230k–$250k, then even with a roof you might still be in a decent position.
And one more important question: is the $10k roof quote confirmed or just a rough guess? Sometimes roofs come in at $7k, sometimes $15k depending on size and material.
Now just speaking from seeing a lot of deals and investors running into this situation — the issue here isn’t really the roof, it’s that your margin is already thin.
A $200–$400 projected cash flow with very little room to raise rents means there isn’t much buffer for surprises. And in real estate there are always surprises. Roofs, plumbing, vacancy, taxes going up, insurance going up, etc.
That doesn’t automatically mean it’s a bad deal though, especially since you’re house hacking. Your biggest win there is reducing your living expenses and getting into your first property.
What I would probably do in your position:
Try one more time to negotiate using the inspection. Not aggressively, just straightforward. Something like asking for seller credits or a small price reduction to account for the roof.
If they refuse completely, then ask yourself one question: would you still be comfortable owning this property if the roof had to be replaced in the next year or two?
If the answer is no and it completely throws off your timeline, walking away is not a bad move. First deals feel like they have to work, but there are always more properties.
But if the deal still works long term (good area, stable rents, solid property) and the roof is the only real issue, sometimes investors will still move forward and just plan for that capex.
Honestly you’re already doing the right thing by questioning it instead of forcing the deal. That mindset will save you a lot of money in this business.
- 6moAaron ZimmermanBusiness MemberAccountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
I'd check with an insurance agent first. $10k for a new roof in the grand scheme of things would not be much. If anything, I'd raise the price and then have seller credits to offset. If it cash Flows upon move out, that's a huge win. If everything else checks out, I'd continue to make this deal work
Brick House CPAs53 Reviews - Member since 2019 · 41 posts · 22 votes6mo
Tyler is pretty spot on. With thin rental margins down the road, how much do you have in reserves for the unexpected (like a new roof, furnace, etc)? If the 10k for the roof puts a big dent in what you have set aside, then I'd look at a couple of options.
A) Ask for a seller's credit for the roof, even if it doesn't cover the full cost of the roof. Something is better than nothing.
B) if you're still unsure, I'd run my numbers again detailing the improvements I had planned to do with estimated costs and then see if it's still a good deal.
With thin margins, your strategy becomes more appreciation versus cash flow. Which, if a mechanical fails, then you need to figure out if your reserves can support your improvements + replacement costs of a critical home component.
My real life example: I just bought a duplex in Williamsport. The inspector noted it needed a new roof and a couple of other items to be repaired to make the home water tight. I asked for a $12,000 credit. The seller asked me to trade up to the asking price (another $4,900) and he would handle the repairs. It ended up backfiring on him because it was almost $20,000 between the roof and other punch list items. There are other small things that I am working through, but the brunt of those repairs were handled by the seller (which has its own risks honestly - would the repairs be done to the standard I wanted compared to his).
Never be afraid to ask for what you want. As long as your purchase & sale agreement was contingent on the inspection, you can always walk away. The seller can say no and you can then evaluate if you think it's still a good deal.
Feel free to message me if you have any questions. I'm happy to share more about my experience.
- 6moBenjamin AakerPro MemberRental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votesIf you are financing the purchase, the bank won't let you proceed without insurance. That means that the roof needs to get repaired. If you did not know about the roof need and have not already negotiated on it with the seller, it is reasonable to ask for the roof to be repaired. It'll likely have to get done before closing, so the seller will need to contract for the repair. This can be tricky because they will probably want to get a bottom-dollar company to do it. I suggest agreeing upon 3 reputable contractors to give bids and then take the middle one.
- 6moRod HanksBusiness MemberInsurance Agent · Dallas, TX · Member since 2013 · 743 posts · 462 votes
@Max Pfeifer If the roof makes the property uninsurable, that’s a real issue — not just a repair item. If you’re financing the deal, the lender will require an insurance binder before closing. If a carrier won’t insure the property because of the roof condition, the deal can’t close until that’s addressed.
In these situations investors usually go back to the seller and explain that this isn’t just cosmetic — it’s an insurability problem. Even if you already negotiated the price down, a roof that prevents financing often leads to either a seller credit or the seller replacing it. Otherwise many buyers simply can’t proceed.
One thing that surprises newer investors is how strict roof guidelines have become. Many carriers won’t write a policy if the roof is near end-of-life, even if it’s not actively leaking. But some carriers will exclude the roof which can be expensive in the event of a claim.
From what you described, the bigger concern isn’t the $10k repair — it’s that your projected cash flow is only $200–$400. One unexpected capital expense can wipe out a year or two of returns.
After years of seeing deals from the insurance side, roof condition is one of the most common things that forces investors to renegotiate or walk away.
Rod Hanks Insurance4.9152 Reviews
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