First time Investor!!

[Account Closed]

Greetings! I am currently in contingent status on a 3-unit multi family property in Chicago, IL. All units are occupied. The inspection was just completed a few days ago and the report is of 150 pages long. After reviewing the report, I am now second guessing this purchase. To name a few issues indicated; units have a known history of water management issues related to workmanship detailing, soft/weak spots in the wood laminate flooring, damaged vent caps on the roof, water leakage in all 3 of the units, condensation observed dripping from main water service, with staining. Again, that’s just TO NAME A VERY FEW. On the other hand, the units are really nice and spacious, each unit is about 1300 sq ft. The building is a nice brick. The neighborhood falls under Class C category. There is tons of room to add value. Due to numerous of needed repairs, I’m not sure about this one being my very first rental property. Would love to receive your advice! Thanks. 

[Billy Daniel]

While those issues are concerning, they are also fixable.  As always, it comes down to the numbers.  Did the seller price it accordingly?  What kind of cash flow are you looking at?  Are the tenants locked into a lease?

I personally always look for things like this because they are great negotiating tools.  Get a contractor to provide a quote and then add 10% and ask for it.  They would be crazy give that to you, but you have to start somewhere.  

Keep in mind that it's the inspector's job to find every little thing wrong with the house.  Our reports are usually full of stuff that is non-consequential (meaning it gets no attention).  Ask the inspector what he/she thinks are the top three items you should go for.  You only need to focus on things that require immediate attention.....if thats what the number say!

Good luck!  Looking forward to hearing about your decision!