Inspector gave the roof 10 years to live

[Mark Deel]

I'm under contract for my first rental investment property for $148,500, contingent upon inspection. It's a single family home that appraised for $159,000. We had the inspection done today, and we were told by the sellers that it has an 8 year old metal roof. The inspector said it was installed wrong and the life expectancy is 10 years. I liked this property because much of the CapEx was done, but I'm pumping the brakes if the roof isn't going to last longer than 10 years.

The property would cash flow about $300-$400/mo net with initial projections as a long-term rental, but I'm not sure what the insurance cost would be now. Assuming the insurance premium doesn't change, the property won't meet my cash flow requirements if I have to pay for a new roof to the tune of $15,000+ dollars. However, homes are appreciating in the area so it could be a 5 year equity play, perhaps, yet I'm expecting home prices to go down in 2024 and some of 2025. I don't think this would make a good STR or MTR.

I want to get three quotes to replace the roof and use them to negotiate down the purchase price (or a buyer credit at closing), however, my realtor said that I likely wouldn't be able to get the full replacement cost from the sellers since there is still 10 years usable life in it.  She suggested I might be able to get $5,000 off the purchase price, but to me that number is low and I was thinking I want at least $10,000.

What do you folks think?

Here is the property:  https://www.zillow.com/homedetails/827-E-Hillsborough-Ave-Fl...

[Greg Scott]

Inspectors are generalists.  First, I'd have a roofing company give you a more expert opinion.

I agree with your Realtor's comment.