Hello folks - Even though this was a failure I consider this a learning experience and looking for some insight since it looks like a chicken and egg situation.
I won a bid on a website for a 1955 Capecod. In NJ, margins are fairly low. So I was happy to have won this at a decent cost price. I asked the lender to recommend a contractor and she provided me one whom she works with for homestyle renovation loans. I took him to the house and he estimated about 24k in repairs but did not provide a detailed repair estimate. My friends I talked to after he visited said his estimates were high and all I needed was to put lipstick on a pig to make it rentable. So I looked for second opinion but none of the contractors I spoke to were interested in taking a look without charging me up front about $350 dollars for the visit. Remember some of these were before I won the bid; so there was no way I was going to fork out $350 for a house I have not even won yet. Once I won it I had 48 hours to get back to seller with signed contract and this was not nearly enough to get a contractor in even if I paid him $350. So I ended up visiting the house again and noticed something the contractor who provided the estimate did not. Copper pipes were cut out and vandalized at different parts in the basement. I had no clue what the estimate would be. When I reached out to the contractor he had no clue either because this is a plumbing issue. As the clock was ticking, after talking to an investor friend of mine I decided that I would just get a regular loan myself and fix these issues after closing. However my lender threw up her hands and said she can't appraise the house unless water is turned on and the website where I won the house has the contract explicitly forbids turning on water. Lender said the only option was a homestyle renovation loan which would take about 65 days to close. So I decided to go with that and ballparked about $27 k in repair cost broken up as the original $24k plus $3k for plumbing issue. The only problem was that this needed closing within 35 days or else I would owe $300 flat fee plus $100 per day for any day over 30 days to the website I purchased from. I could not agree to this and the seller could not agree to a lower price to compensate for the above and so the deal fell through.
As you see above although the deal fell through, I believe I learned something about the types of loan out there, closing period and alternate lenders. For example, quicken could lend with water turned off. My major issue is that the contractor issue seems like a chicken and egg situation. If the contractor estimate is needed for me to bid on something but contractor will not come over unless it is paid for to do an estimate but since I am not sure if I will win the bid and can't justify an estimation expense, how do I handle the situation? It seems incredibly frustrating. Is there anything I can do to estimate repair costs although it sounds counterintuitive because that's why you have professionals.
