mfh 1/6 units has bedbugs - would you buy?

[Janel F.]

What would you do?

Considering a 6 unit property. Currently rented and has great cashflow but upon walk through we learned that one unit has bed bugs and the current owner isn't doing anything to remediate. Would you purchase? I've never had to deal with bed bug remediation so I don't know how realistic it is to get rid of them. Also concerned about it spreading. Anyone have experience with this?

[Roy N.]

Janel:

We just went through this very scenario ... with a 6-unit building coincidentally.

Similarly, the Vendor "failed" to disclose the bed bugs, but a little bird (tenants) told us all about them ... but we did not learn of the issue until a day or two before we were schedule to Close. 

I've danced with bed bug before and a building of this size could run 10-15K if there was an infestation throughout the building.

So we basically told the Vendor we would hold-back X-amount of the purchase price until we had our pest control fellow go through the building and give it a clean bill.   If bed bugs were found, we would use those funds to pay for the treatment to eradicate them and any residual would be released to the Vendor once there were no more bugs (90 days after treatment).