Steal too good to be true?

[Chris Lombardi]

I'd like to get some advice to see what anyone would do in my situation and if they would be cautious of red flags.

So I'm currently in business with my dad.  50-50 arrangement, we own 1 property  so far and all has been going great.  We've been looking to expand recently and he found a wild deal.

Place is a 1 bedroom condo, in a great area and seller is desperate.  It's listed for 210K, my dad offered 75K and got accepted.  He took a look around and said it needed a bit of work, but nothing more that 10-15 thousand.   I said I still would like to get an inspector in, but he doesn't want to as he's closer to the person selling and fears that adding complexity to the deal would make the seller back out.  I feel like this is unnecessary risk and there's no reason to not get a $300 inspection.  If the seller really did back out because of an inspection, that's seems like a big red flag and they may be hiding something.  On the otherside, if the place is really worth 210K, there's not many problems I could think of that would make 75K a bad deal.

Am I making too big a deal of this?

[JD Martin]

Well, it depends:

1. Who cares about the listing price - what is the fmv?

2. How good is your dad at looking at property? Does he know how to accurately gauge rehab costs?

If the fair market value is high and he knows what to look for, then what are you expecting to find that's going to be high dollar? It's a condo, so the roof and foundation are going to be the responsibility of the HOA.

Personally, I wouldn't kill a deal over an inspection unless I had some serious doubts about what I was looking at or how much I thought something was going to cost. On a condo, you really shouldn't be too far lost on rehab costs. You may want to check on the health of the HOA, though, to be sure you're not about to be hit with some stupid high assessment.