An incident just days before closing

[Abad Marroquin]

I am in the process of buying an apartment. We are supposed to close in 2 weeks. Today, while I was speaking with a property manager who is a candidate to manage this property, he told me that there was an incident in the property I am buying. He said he was informed by one of his tenant that the police had arrested people who had drugs buried in the concrete slab inside the apartment. His tenant thought he manages this unit too since it is close to the one he lives in. I plan to bring a contractor to evaluate the damage and get an estimate of how much this will cots to repair the floor and any other damaged that that took place after we went under contract. Then I plan to ask the seller to transfer to me that amount at closing. Has any investor ran into something like this before. If so, I would appreciate any suggestion on how to proceed in this situation. Is there anything else I need to do? What would you do? Thanks for your input in advanced!

[Austin Fruechting]

Get a credit at closing for the work. That's much better than a price reduction. 

For instance say you're putting 20% down, and it's $100k property. If everything went as normal you'd put $20k down and have the property. But now say there's $10k in expense to get it back to what you were supposed to be buying. 

• $10k price reduction means you buy for $90k and put 20% down ($18k), and then pay for the $10k repair out of pocket. 
• $10k credit at closing means you're cash position stays the same. You're putting 20% of the $100k down, and getting $10k back to do the repairs.