Due Diligence on First Deal (Northern Virginia)

[Phil K.]

Hi All,

New investor looking for advice on my first deal. As mentioned in a separate post, I recently found an off-market with approx 100k in equity off the bat. I’m skeptical because I’m usually of the opinion that if it sounds too good to be true, it probably is. It’s not a distressed property, however the owner is in a unique situation and fully on board with home inspection and contractor rehab estimate (my agent checked the house out and said it’s in great condition, minimal rehab). When I expressed my skepticism to my agent, he stated the seller strikes him as a really nice older guy who doesn’t need the money (he’ll be making a bit of equity but nowhere near what he could get in the current market.) To me, this just doesn’t add up, so I want to do my due diligence.

My question is this: Outside of a home inspection/title exam, what else can be done to ensure due diligence? It’s my understanding that Residential Property Disclosure Statement for Virginia requires minimal disclosures from the seller, essentially Virginia is a “caveat emptor” state. If I ask for disclosures on structural defects, plumbing, electrical, etc., is the seller required to provide them? What recourse do I have if something is to be found for the property? I’m also thinking about asking for 2 separate home inspections to see if there are any discrepancies.

The seller and his wife may need to stay in the home for the next year, but he still wants to sell the home (my understanding is their original plan was to sell the house and buy an RV.) I’m a current renter, but not comfortable buying other properties right now due to the fact that we’re in a seller’s market, and I don’t think current prices are sustainable. So, my thought is to write up a buyer’s contract with a contingency for the interest rate (protect myself as a buyer in case it skyrockets over the next 12 months, plus home inspection, title exam etc.) While I don’t believe in trying to time the market, my idea is that if the market crashes in the next 12 months, I can break my lease and buy a property at that time instead of competing in the current bidding wars going on in my area (Northern Virginia). If the market corrects after that, at least I’ll have a property I can stay in as a buy and hold and possibly pick up a 2nd IP.

Is this deal too good to be true? What are the flaws in my strategy? Any thoughts are greatly appreciated!