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Updated almost 5 years ago, 12/11/2019

User Stats

12
Posts
1
Votes
Paul Paquin
  • Flipper/Rehabber
  • New York
1
Votes |
12
Posts

mold on commercial property – should it break the deal?

Paul Paquin
  • Flipper/Rehabber
  • New York
Posted

History:

In 2014 the building had a fire and since then the entire inside was renovated and is now like new. However, the outside was not repaired, and today you can see black all over the backside of the building (what appears to be mold). 

I put an offer on the building for 599K and they accepted but later that night my realtor called me and asked me to waive my right to negotiate a lower price after the building is inspected if the inspector finds problems with the roof and building. Again, the inside is like new and I've already had contractors inspect the inside finding no problems. The cap rate on the building is 7% and it's fully rented out, so that's all good.

Is this black all over the place and potentially the building needing a new roof within 3 years a deal-breaker? I've offered; if it needs a new roof and the cost of the roof is 40K I will pay half of that if they pay the other half, but they did not want to take me up on that offer and said the price of 599 already takes the potential of it needing a new roof in 3 years into consideration and that no matter what is found at inspection the 599 price is staying at 599, but my offer was not assuming it needed a new roof (I found that out after my offer).

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