Due Diligence on Roofstock SFH Purchase By July 25th

[John Neville]

Hello BP'ers,

My $100K offer on a SFH in Montgomery, AL has been accepted. This is my first time buying on Roofstock, which feels riskier than buying turnkey.

What kind of due diligence should I perform besides inspection and appraisal to make sure everything's kosher?

I read JC Wu's Roofstock post about her unpermitted roof. Jeanne G mentioned buying a property later deemed unrentable by the HOA. How do I protect myself against 5-figure losses like these?

The house seems too good to be true: 1,750 square foot 5BR/2BA on a 30,000 square foot lot. The rent is $995. Laminate floors inside that look like nice wood. 

It's been on the market for 75 days and I offered the listed price. I'm not even buying all cash: I'm using financing.

How did I get this property? Why is no one else interested? I have three potential reasons:

1. It's on the west side of Montgomery, where property values are lower and crime is higher, though my agent said that this particular neighborhood is good.

2. My agent listed the house as needing $4,000 in repairs. When I asked where he got this number from, he said, "My own head: it was just a guess. I made it up. I've never been inside the place."

3. The house does not have a 30-day Roofstock buyback guarantee.

I would like to hire a lawyer to write an agreement that protects me if the seller and title company neglect to pass on important information about the condition and rentability of the house. Do you think they would sign such a thing? Should I be suspicious?

Best,

John