A 6 Days from closing and I am thinking of leaving the Deal

[Grant Doyle]

I am in the process of buying a 4800 squarefoot fourplex and we are expected to close this coming Tuesday. We agreed on the price of 173,000 with the seller paying most of my closing costs bringing my loan to 184,000. The property rents for 2700 a month but I am using an FHA loan to live in one unit making rent 2100 a month. If my numbers are right I will be breaking even and living for free. My current rent right now is 1200 because my roommate relocated for work.

We had the inspection last week and major concerns came back on the roof. I had three contractors out to bid on it and did my best to understand roofing and what the future of this roof would be like. It has at most 5 years left on it. If there are leaks I can tar them and cover them up for the short term but eventually a new solution would have to be brought in. The best case scenario for my three bids was 25k. This was a silicon cover on the roof, TPO bids were 35-40k. I went back to the seller and told him, I would not negotiate on any of the other things that came up in the inspection if he could meet me on price regarding the roof. I offered him 155k. He was not willing to do that and I told him the deal was off, he then replied that he would tar parts of the roof (he said estimated 5k, I dont think is that much and something I could do) and lower the price by 2500. This was all happening late at night so I told him I would sleep on it and get back to him later today.

This property is also in a flood zone, now last summer my entire state (OK) was flooded and this property did not have water close to it. I am willing to assume the risk of being in a flood zone. The property does have a lot of deferred maintenance and would need new paint all around, two new furnaces, a new water heater, drywall on some of the cinder block walls, crawl space ventilation, and a new sewer main. These were all things I was willing to accept but with the new roof findings, these items are becoming a bigger fear for me. This new finding with the roof concerns me a lot. I am a young guy with not that much of a nest egg to cover a major expense if something were to go wrong. What would be your advice for the conundrum I am in?