Requesting Advice: Purchasing an apartment in building that failed inspection

[Dar Baruchim]

Hi All,

This would be my first investment property. The unit, in North Miami, would be paid for all in cash since the building didn't pass the fire inspection (ie. proper exit signs, etc) and wont be approved for a mortgage (it has passed the structural inspection however). The property manager has told me they're working to fix all the issues. Additionally, i live in Chicago, so i won't see it before closing which is in 30 days. My questions are:

Can i find a copy of the fire inspection report using the address? 

How big of a concern is this, 1 = "nothing to worry about" and 10 = "run"? and why?

How would you mitigate the risk?

What other parameters do you use to assess the worthiness of a deal?

Thanks in Advance!!

DB

[Greg Scott]

As your first investment property RUN. I've heard too many horror stories about people that pay cash for a property because they think they are getting a deal.

A moron of an owner could see they could get a much higher price if they just put in the exit signs (etc) and then sold to someone with a bank loan.  Odds are there is much more hidden here than is being shared.

A seasoned investor could probably mitigate these risks, but they would run EVERYTHING to ground.  They would have to oversee third party reports just like a bank would.  They would hire a company to do Phase 1, PCAs, ALTA assessments and the like.  If you don't know what I'm talking about there is a much higher probability of getting burned.