Inspection revealed some interesting things..

[Eric Rodriguez]

Good morning,

We recently got an accepted offer on a two family investment property and proceeded with our inspection the other night. During the inspection we found a few issues. Most significantly, the septic was not a suitable size for the home. The previous, quick fix solution was to route the basement bathroom waste and the basement washer waste out via pipes to the exterior of the home onto the lawn, which was showing evidence of soil erosion due to this "solution". Obviously, this is not legal and we need it fixed. There was also some mold in the attic and a few other minor issues like leaking pipework connections under the sink and not-to-code outlets. Our bottom line is, we were using an FHA loan for this property, and it won't pass with the home in its current condition. Our question is this: Do we try to go with a 203k loan and take on this project by ourselves after obtaining a septic inspection/estimate? Do we ask the seller to take care of it (and the other issues), and hope, even though they've avoided shelling out for an upgraded system so far, that they'll fix it? Would there be any other strategies we could consider and what would be the best strategy to handle this? We have already negotiated them down before the inspection to $180k with a $10k sellers concession and their original asking price was $190k. Any ideas/thoughts are greatly appreciated, thanks!