Remote Investment Property

[Selena Williams]

I would really love some advice from the BP community.

I recently made an offer on a duplex in another state. It was supposedly a turnkey property and is being sold by a developer. The offer was accepted however when the inspection came back - well to put it lightly I’ve never in my life seen an inspection this bad. It checked every box of the worst problems - structural/foundational problems, termite damage, electrical damage, roof damage (even though they represented they put in a new roof), water damage, and mold. There are also a million other smaller damages - one of the doorknobs to the outside doesn’t close properly, a brick is missing from the outside steps, and pretty much all the appliances are old and already don’t work or are on their last leg.

It appears to me like the developer did cosmetic work only, to make the place appear turnkey. Maybe I’ve lived in NYC too long but the inspection makes this whole deal feel like a scam.

Would you back out or keep going and see if the sellers will fix the problems? Keeping in mind I’ve paid a $2k due diligence fee that I can’t get back. Other than that and the cost of the inspection if I walked away I would be “free and clear”.

What would you do?

[Anthony Angotti]

Originally posted by @Selena Williams:

I would really love some advice from the BP community.

I recently made an offer on a duplex in another state. It was supposedly a turnkey property and is being sold by a developer. The offer was accepted however when the inspection came back - well to put it lightly I’ve never in my life seen an inspection this bad. It checked every box of the worst problems - structural/foundational problems, termite damage, electrical damage, roof damage (even though they represented they put in a new roof), water damage, and mold. There are also a million other smaller damages - one of the doorknobs to the outside doesn’t close properly, a brick is missing from the outside steps, and pretty much all the appliances are old and already don’t work or are on their last leg.

It appears to me like the developer did cosmetic work only, to make the place appear turnkey. Maybe I’ve lived in NYC too long but the inspection makes this whole deal feel like a scam.

Would you back out or keep going and see if the sellers will fix the problems? Keeping in mind I’ve paid a $2k due diligence fee that I can’t get back. Other than that and the cost of the inspection if I walked away I would be “free and clear”.

What would you do?

See if the seller will remedy or terminate. It's likely that things are hidden behind the walls as well since an inspection is visual in nature only. Before making decisions on what to accept I would have most of the major systems in question reviewed by a qualified professional (contractor) since inspectors are good at bringing things up that may or may not be issues, but they often understate and/or overstate issues since they are not an expert on any one system. 

Before wasting any more time though let them know that you will be seeking concessions based on repair recommendations from professionals. Ask if they are willing to discuss after further evaluation. If they aren't even willing to discuss you move on, take the $2000 loss as a cost of doing business/learning experience, and you are much better off for considering your next property.