No inspections for a duplex

[Danny Lambert]

Hello,

I am considering duplexes where no inspection is allowed because the property already has renters. Is it unwise to assume that a property does not need major repairs because it already has renters? Or do I just need to assume a larger level of risk if I purchase such a property?

Regards,

Danny

[Dan H.]

In San Diego it is common to have an accepted offer prior to seeing the interior on MF.   This does not imply no inspections.  The inspections and interior viewings happen during the contingency period after the offer has been accepted.   If the interiors are not up to expectations then the offer can be renegotiated or buyer can walk and get their earnest money. 

Unless you have a lot of experience I suggest you do not waive inspection contingencies.   I have found $40k septic issue, $32k foundation issues, and numerous smaller issues during contingency period.  When you find such an issue, you typically can obtain discount of the cost of remediating.   the owner may seek their own appraisal; I find it typically strengthens my case as usually both quotes are fairly similar in price to remedy the issue.   What can seller say when my contractor and their contractor both say the foundation will be $32k to fix?   Typically they say something like how about $27k credit?   I then point out impact to tenants, effort to deal with the issue (I do not work for free), etc.  As indicated you should get at least a discount to cover cost to remedy the issue.. Dealing with the issue is work.  Managing contractor and tenant takes work.  Depending on tenant’s lease they may desire lodging; if lease says nothing they are only entitled to rent reduction for days they cannot use unit.  

Good luck