Cleveland Turnkey - Inspection Report with concerns

[Nick Shri]

Hey BP'ers

I am starting in REI via Turnkey route. I put an offer on the house in Cleveland. On Saturday I received the inspection report and few items made me think, WTF kind of TK job is this? Here are the items of concern (to me) that are listed on the inspection report.

1. Roof appears to be 15-20 years of age
2. Mold buildup on the foundation walls and support joists/subfloor. Humidity levels in basement is high at 64%
3. A/C was 40 years of age, not functional
4. Signs of Ice damming on the garage sheathing
5. Furnace is 19 years of age, unit didnot fire when turned on at the thermostat
6. The incoming 3-wire electrical systems is considered out of date
7. No GFCI outlets anywhere (including in Garage)
8. Walkway has cracking and settlement
9. Garage floor, concrete has typical cracking and settlement
10. Basement floor, has signs of cracking and settlement
11. Knob and tube wiring in the home is considered obsolete and may pose an increased fire hazard. Some insurance companies are not issuing homeowners insurance for homes with this wiring. Any poor condition, frayed or altered knob and tube wiring should be replaced. It should be noted that any outlets powered by this wiring are going to be ungrounded, including three-prong outlets. All expensive devices should be plugged into a surge protector and not directly into the ungrounded outlets to prevent damage.
12. Recommend installing a battery backup system on the sump pump to prevent shutdowns during power outages.

Roof is towards EOL which means I am looking at high CapEx in near future (less than 5 years). AC is super old. Crack repairs? And big one - the Knob and Tube wiring!!

I am curious whether to ask the TK provider to fix major items or just back out of this? What are your thoughts? 

[Chris Clothier]

Hey Nick,

I think I am simply being redundant now with the rest of the posters, but this is clearly a case where someone uses the word turnkey to market a property hoping that you will just accept the results and then expect the great returns I am sure it showed on paper.  You are staring at a massive loss if you move forward and a massive headache for your future.  There should be absolutely $0 in deferred maintenance and all systems as well as roof should be up-to date or near beginning of lifespan at a minimum.  I would walk away and consider yourself lucky to know in your gut that something was wrong and have a resource like BP to confirm it.  DO not close on this and expect the company to make it right or fix it later or somehow make it up with great management.  How you do anything is how you do everything and that adage usually rings pretty close to accurate.