Water Damage in Rental Property

[Steve Bullock]

Hey guys, I’m a newbie here but I just wanted to reach out for some help regarding a property I’m looking to buy. I found a triplex for $65,000 that has two semi-updated units & one attic apartment that could use some work. The exterior needs cosmetic work as well. The attic & exterior work aren’t the big issue in my opinion. One of the units has water damage on the ceiling. The seller says that the roof was replaced 10 years ago & isn’t the cause of the leak but that water may be blown in from the side of those during heavy rains. Apparently the tenant that is staying there currently says that it doesn’t leak all the time & I noticed that the damage is right above the tenant’s bed so I would assume it isn’t so bad for them. The property in total is bringing in about $2,300 a month between the 3 units seeing as how they are all fully occupied. I would just be taking on the current tenants. I guess my question is, is this a good deal? Should I be worried about the visible water damage on the ceiling & would it be worth buying & repairing considering the property is already bringing a decent amount of income every month? I’ll attach some pictures if I can figure out how (still new here) so you could see the damage. Any help would be greatly appreciated !

[Jon A.]

It sounds like a great deal at those numbers but I would definitely negotiate those repairs into it. Sideways rain is pretty rare in my opinion. There is probably a nail pop in that roof letting some water in. 10 years isn't that long for a new roof to start leaking. I would reach out to the installer . 

I would also ask to see the leases and make sure that all units are legally allowed in that area. You may really be buying a duplex with an illegal third unit attached, which could be an issue with insurance if there was ever a claim.