Need Advice on the inspection of a 4 plex

[Jeremy Komer]

I have a four plex that I am in contract for but the inspection revealed galvanized steel piping from the 1930s when the place was built. The inspector did find one rust spot that looked like a possible previous leak but other that it looked ok from the outside.

Is galvanized steel piping a deal breaker for anyone? I know these pipes are probably near the end of their expected life and this would be my second multifamily so having to replumb the house would put a serious wrench in the business plan.

It also has a 25 year old roof which I intend to ask for the money to replace it.

projections below. 

Let me know what you think, how much risk is 90 year old galvanized steel piping?

Total monthly income	Price	175400
2520	Costs	Gross Income
mortgage and utilities	$1,423.90	$30,240.00
Maintenance	$ 365.42	2.5%
vacancy	$ 252.00	10%
down payment	$ 43,850.00	25%
Fees	$ 6,139.00	0.5%
Monthly Profit	$478.69

[Brian Garrett]

Personally, I would account for re-plumbing the property and the roof replacement in my rehab scope. Furthermore, I don't see expenses like property management, CapEx, lawn care or insurance in your costs. I also think your repairs and maintenance budget of only 2.5% is too low for a property this old. I would expect that to be in the 5-10% range especially if it hasn't been completely rehabbed.