Inspection Amendment / Difficult Seller

[Account Closed]

Hello BP Community,

I am currently under contract to purchase a nine unit multifamily property which includes an 8 unit apartment complex and a single family home.

Early last week, I received the inspection report back from the property inspector. The report identified the roof having minimal useful life remaining, the boiler for the apartment complex being towards the end of its useful life, and also negative grading for the apartment complex, resulting in water running towards the foundation instead of away from it. 

I reached out to obtain quotes from contractors for the cost of replacing the roofs on the property, and the cost for obtaining a new boiler. I haven't heard back yet on the boiler quote, but the one for new roofs came in at $35,000.

I put together an amendment to the purchase agreement requesting that the seller provide me a credit for the cost of new roofs, and sent it yesterday for his approval. The response that I got back from him was that he intended to reject the amendment since there are other interested parties on the property.

From experience with buying investment properties when something substantial comes up for capital expenditure items like roofs being at the end of their useful life, is the request that I made a reasonable one? I'm trying to determine how to navigate this to come to agreement but my thought is that some sort of credit is reasonable to ask for. Thanks for any input or advice. 

[Will Kenner]

@Account Closed I don't think your request is unreasonable at, rather it's what you should do. Another way to look at it is, how would you feel paying for all those repairs after closing? Do you have the funds to do so? With those added costs, does the property still make sense buying it at the contract price? If not, then hold to your position. The deal has to work for you. Of course the seller is going to tell you that "everyone wants the property". But do those "interested parties" know about the roof, boiler, foundation issues? Probably not as it's just initial interest. They haven't done any due diligence like you have. I'd call his bluff. Specially with potential foundation issues, that can get expensive. It would be better to pass on a deal that doesn't make sense, then to force it and be stuck with huge expenses that won't make you any additional money, rather just get you back to square 1. Additionally, it's not fun when the boiler goes out and you have cold tenants and HVAC contractors are booked out weeks if not months. Not to mention if you have to start digging up foundations. Take those issues seriously and ask for concessions on any large repairs that you find.