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Updated about 4 years ago,
Electric Not To Code/HVAC Not Working/Termites Counter Offer Help
Hi All,
I am under contract for a 70s brick ranch for $165k 3bd/1bth 1100 sqft that will rent for $1,200. Property is on a slab. It was priced low IMO and I offered $165k ($20k above asking). During the inspections (home, pest, septic, electric) several issues came up and I am curious for everyone's input on what my counter offer should be. The roof/water heater/HVAC/Appliances/Flooring are all new but, HVAC is not functioning and is not up to code. Below is a breakdown of some costs to repair.
Termite Treatment(damage appears minimal but I may never know full extent of the damage): $1100
New Electrical Work (house has aluminum wiring and NOTHING is up to code): $12k
HVAC (New, but not functioning or up to code): ???? Seller has already started working on this and I plan to require this be resolved before close.
Gutters: $2k
Misc Interior work: $4k
Misc Exterior Work: $1k
I do not want the seller to hire their own contractor for these fixes. Most of the issues are due to the age of the home (electric) and shoddy handyman work/install plus the unknown about the Termites. The house cash flows well at $165k but, I am not looking forward to putting nearly $20k of work in a house mostly to fix poor elect and contractor issues. The good news is the house did appraise for the asking price. But with the electric and termite issues now I feel that after my repairs the ARV might be $170k. So minimal return on my investment.
Based on this information what would be a fair offer in your opinion?