Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Multi-Family and Apartment Investing
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 5 years ago,

User Stats

58
Posts
18
Votes
PJ Singh
  • Houston, TX
18
Votes |
58
Posts

Seller Concessions based on multifamily inspection

PJ Singh
  • Houston, TX
Posted

Hi BP'ers, 

I recently have an inspection done on my first 25 unit MFH under contract in Houston TX. It is a 1970 single-story, garden-style brick MFH ( 3 building).   As part of the general inspection report as well as other  specific inspection '' like roof, Foundation, HVAC" , following are the major finds: 

Foundation inspection: I understand with 50 years old building in the Houston area, there is a possibility of some settling. however, 2 out 3 building has significant sloping backward causing cracks in walls and floor.  Likely cause with inadequate drainage of rainwater in the backyard. 

Water drainage issue: Water pool in backyard with nowhere to drain causing foundation issue. Inspector suggested installing french drain or pumps to drain. 

Roof inspection: 2 out of 3 roofs are old roof and 1 is a 3 yr old roof. all have leaks. Roofer recommended replacing old roofs (beyond repairable).

plumbing: All are galvanized pipe.

Interior unit inspection: 8 out of 25 (32 %) of units are in rought condition which needs heavy upgrade.

During the initial tour, the seller showed only 1 unit (probably better looking one, in the new roof building and least foundation issues) to us to estimate our rehab budget. Clearly we underestimate the rehab budget on 8 units as well as major capex items. Our rough estimate to fix all issues is in six figures. 

 Question: Is it reasonable to ask seller concessions on all the above items to fix it? Or these issues are typical to the 50-year-old building and you choose not to fix it. What I was told by maintenance/PM staff during the inspection, these issues were inherited by the current owner and they choose to operate with band-it solutions on capex items. 

Also for the future, how to do I make sure, I capture major capex items before going under contract. 

I just want to get an opinion from experience operation/syndicators? Thank you in advance for your help. 

 

    Loading replies...