Termites and bandaid repairs on SFR Cape Cod, MA - deal help needed

[Chris Kelly]

Hi,

I'm currently under agreement for my second SFR home - a small cape house in Yarmouth that we'll rent out (Cape Cod, MA) and need some advice after the inspection.

The offer price was contingent upon the owner treating the home for termite damage and repairing any damage that had been incurred to that point.  We had an inspection yesterday.  The termite remediation treatment is done, but the majority of the sill under the house has some termite damage - mild to moderate damage covering 60% of the sill in the front, sides, and back as well as across a couple of the floor beams.  It is also clear some of the work done on the house is shoddy (forgot to pain ceiling under the cabinets while they were being replaced, didn't complete the tiling of the floor up to the wall, painted windows shut with sloppy paint all over windows, supposedly fixed termite damage- but placed a beam next to a damaged beam in one corner of the house only).  Two buyers have walked away already - and this time he was supposed to fix the damage from termites, but he just mickey moused one corner of the house and it looked like he put a fresh beam of wood that wasn't even doing anything structurally (not sure why). 

Because this is a lean deal I am thinking about one of three things: 1) do I quantify the worst case scenario and make an adjusted offer that would let me fix what needs to be done (since I don't trust his work) or 2) we give him a few more weeks to properly repair everything with a second inspection, or 3) we walk away.

We found the deal on MLS and have it under agreement at a reasonable price whereby rent will cover mortgage and expenses, but if any capex comes up during the first few years it will end up out of pocket. We've been looking around that area for a few months and it's the best deal cosmetically and on paper by about $20K (again, using MLS numbers and not wholesaling, REO, or any of the other great strategies used by folks on BP).

In terms of my circumstances there are a few subjective factors which pointed us towards the cape that I won't bore anyone with the details of. 

Do I walk away or discount the offer (and how much % if so)? I think I could deal with quantifying the damage and adjusting my offer and walking away if he didn't take it - but now I'm worried the termites might have gotten under the shingles and perhaps there is a lot more damage that we can't see.  If it were a corner here or there that I could just replace I wouldn't be so worried - termites happen, but this seems relatively risky with it being in the infrastructure of the house. 

Chris

[Josh Birrell]

I would walk away.  With that much damage to the sill and shoddy work in areas you can see (makes wonder what's going on in places you can't see w/ a home inspection) sounds like you will surely have some unexpected surprises in the next few years.   

If you are buying off the MLS on the cape I think you would be best to wait until fall or winter or even next spring when inventory is high again . The knowledge you've gained from market research now will pay off later. Summer is probably the worst time to buy on the cape because more people are looking and sellers think this means their properties are worth more.

You might also want to consider moving more towards Brewster ,Harwich, Dennis or even Yarmouthport if you can.   More mass appeal for rentals, seasonals and resale when you get to that point.