Just walked away from my first deal...horrible inspection!

[Heidi Kenefick]

Just walked away from my first deal. I’ve been looking for several months for a two family, in a good area, with potential for value add through renovations. I found a single family with a detached cottage already rented out, in one of the best towns in this area, with motivated sellers as it is an estate sale. They took my initial low offer, but we just had the inspections, and I decided not just to walk but to RUN!

Problems included: septic tank leak, failed water flow test for the well, evidence of carpenter bee infestation in the house and termite infestation in the garage, leaking pipes, roof was bad and all the windows were bad. The detached house had mold in the crawl space and attic. There is asbestos insulation, and rotten sills on both the garage and the main house, and electrical problems (short in the bathroom, no grounds, and not enough AMPS for the house). The money for the inspection was literally the best money I ever spent. Saved me a huge headache and a lot of renovation costs that otherwise would have been unanticipated.

It does have me wondering, should I make a super low ball offer, like the land value only, and then just knock the house down and build a new one? Anyone else ever walk away from a (perceived) deal due to bad inspections or find yourself in a similar situation? What did you do?

[Tanner Marsey]

@Heidi Kenefick

It’s a numbers game. Attach a cost to all repairs needed and run your numbers. If it works, it works. There may be headaches and what not along the way but break it down. You might be walking away from a good deal because you’re overwhelmed. Also, if the seller is motivated and it makes sense.... I wouldn’t hesitate to make a second offer that takes all necessary repairs into account.