Old Duplex House Hack in Texas

[Andrew Coulton]

Hi all,

I put an offer in on a 1968 Duplex in North Texas. Plenty of upside and potential for rents to go up with rehabs required on both sides. Offer was accepted and I went under contract. Idea here is FHA loan, live in one side, the other side is already rented for another 11 months. "Live in" rehab and refinance out of FHA after 18 - 24 months.

The inspection report came back with multiple major issues:

- Roof: instead of removing the older shingles before placing the new ones old they went ahead and place the new shingles on top of the old ones, meaning insurance won't cover me, being the older layer is more than 15 years old. Total cost to repair 20 - 30K. Seller won't fix the roof or provide credit. 

- Aluminum wiring through both units. 30K to completely redo the wiring or 10K for switches to have covered with Copper. 

- Termites (seller will pay for treatment)

- Foundation issues. Decided not to get structure engineer in due to roof deal breaker. Some rooms the floor was leaning over. 

Is this normal for older houses to have so many major issues? 

I've decided to walk away from the deal but interested in how other people would have approached this situation? 

Any feedback would be great. 

Thanks, Andrew