Multifamily Purchase - buy, walk or negotiate?

[John McCormack]

Again I am here to seek the advise of the forums! Much thanks in advance!

I've already made an offer on a triplex in my area that listed for $269K. It's a 3/2 main house with garage and two 1/1's under one roof in the back. All central air, a few improvements, overall the best I've seen condition wise. It appears that another group of investors bought in 12' for a great deal, made some improvements and are looking to move on. I offer $240K they countered with $262K.

During the walkthrough the sellers agent said a new roof on 1/1's, electric, PVC sewer pipe, some new windows & paint was done and seller's agent said it was permitted. A initial search through the local municipality only shows 1 permit open & closed for a 450 sqft. section of roof. My agent has already requested copies of these and we are as of now in a holding pattern waiting.

My question to BP is what are people's thoughts on this and permitting in general. Are my choices:

- no permits provided, then I walk?

- go through with my inspections and if nothing comes up or everything is up to code we continue?

- request seller to remedy any code violations? no permits pulled/opened means city inspector would have to inspect entire premises to determine if there are any violations (and if I do involve the city is that simply opening up a can of worms in that I may not be able to buy it any longer and now this information is public so all future buyers will be aware of these code violations) Also, I doubt the seller will agree to this as it's an AS IS contract

- when do you really involve a city inspection and is it even required? or only upon request?

- do I negotiate an even lower price based on my possible liability knowing there might have been work done without permits?

Obviously, I'm concerned about protecting myself but also trying to balance that with not killing a deal before it's had a chance to proceed.

John