All Forum Posts by: Michael Vu

Which items would you say are the top priorities to negotiate with the seller? I'm thinking plumbing, roof leak, and electrical? 

Is there a point where price negotiation / seller paying for some repair would make this worth it?

@Joseph Cacciapaglia I'd say the rents ($600 each) are in the range of market rents for that neighborhood. Maybe 50-100 under. I am very worried about the knob and tube, didn't realize how big of an issue it was until I did some reading. Would be difficult to sell in the future and even if I didn't replace, the insurance premium would eat into my cash flow.

@Michael Ablan Yes, that's rent for both units. It's in a C neighborhood so I don't think appreciation is a big play.

@Corey Chonsky Rents have only recently been raised to $600 each. I'd say it's a C area so it is around market rents, may be a little lower due to long term tenants. You're right, it is just about 100 years old.

Hate to be at this point again in the due diligence, but here I am. Ready to learn.

I'm under contract on a duplex (first deal) and after having inspections, I don't know if this deal is worth it anymore. I'd appreciate some input from the BiggerPocket community! 

Here is my deal analysis:

So when I first looked at this deal, I saw there was long term tenants (so lower vacancy), the living spaces of the property were actually very nice for a MFH, and the price was attractive. It came out to around $125 / month cash flow, not GREAT, but for a first property it's a base hit and gets me in the game.

HOWEVER, here are the main issues that came up from the inspection that really concern me:

• Horizontal cracks in the poured concrete basement foundation on the back and left side of the house with what looks like attempts to patch it with stucco in the past
• Knob and Tube wiring throughout the entire house (concerned about getting insurance)
• Galvanized piping for majority of water supply lines (low water pressure throughout house)
• Leaking roof from chimney (need to install cricket) and fix upstairs unit walls
• One of the furnace flues is completely deteriorated and needs replaced, currently releasing some levels of carbon monoxide into basement
• One of the water heaters is from 1992
• Some water intrusion damage in main electrical panel and one of the breaker panel is a Pushmatic style

These are what I conclude as the big ticket items. Are these TOO many serious issues to still make this a good deal? It seems that this one has hit the mark on all the main issues (foundation/electrical/plumbing/roof). I appreciate any help/advice. I really want to jump in and get started in 2020. But I wonder if I'm jumping off a cliff here.

@Tyler Rowland @Christopher B. Thanks for your replies! So would you guys recommend putting an offer in and going to the inspection to see how bad it actually is?

I just got back from looking at a potential duplex property. Overall, the property looked solid with minimal repairs in the living spaces. However, in the basement, there is a few horizontal cracks in the wall. The basement has poured cement foundation. It looks like the wall was once patched with cement and now that layer has cracked. I also found some cracking in the exterior and on the porch. Here are some photos I took:

Would appreciate any input from others with more knowledge about how serious this type of crack is. There was no water leakage in the basement and no humidity at all. Thanks for any help, really appreciate it!

@Michael Jake Higgins I ended up backing out of the deal because the inspection found structural issues due to ground/rainwater and a broken sewer pipe. Although I could have negotiated the price and repairs, I decided I didn't want to deal with those two major issues for my first house hack. 

Going through the process was definitely a great learning experience that reading books could not prepare me for. I've developed better criteria and deal analysis from this deal and realize I need to watch out and account for high property taxes and properties that don't have split utilities, which can make what seems like a decent deal actually a bad one.

@Brett Cox I decided not to use Ally. They only had pre-qualifications and no pre-approvals, which I thought would be less effective when making offers. I decided to pursue something more local that I could build a connection with instead!