Termites: Deal-killer or not?

[Story Moller]

Hey guys,

This is my first post on BP.

I am a new investor in Mississippi and am in the process of the closing my second deal.

During the inspection period we discovered termite damage in two of the rooms. My contractor indicated the following costs associated with the termites if they are still active:

$1800 termite treatment

$600 repair costs (drywall, studs, paint, etc)

$2400 total

I was able to get this property for 67.5k and would be able to generate $1200/month in rent or flip for 140k with approximately 20k in rehab costs.

I have an actual termite inspector coming out this week, but my questions for you guys are:

Do my contractors numbers seem somewhat accurate? Or should I be nervous about much higher termite repairs (over 10k)?

Besides tearing the drywall to the studs, is there any way to tell how extensive the damage is?

Would you move forward with this deal knowing that termites were/are on the property and the flip potential is 140k or rent potential is $1200/month?

I appreciate any input. Thanks.

-Story Moller

[David Foxall]

@Story Moller

Are they dry-wood or subterranean? The treatment cost isn’t excessive if they are subterranean. The repair costs are an unknown until you know the extent of the damage. I had termites and the only way to know the magnitude of the damage was to remove drywall in known areas of infestation. Based on your numbers, I wouldn’t bail until I knew more. Have you been in the attic? Is it OK?