All Forum Posts by: Alessandro M.

John, it is not a foreclosure. And I did not sign a disclosure agreement.

John, in fact it seems a good deal even if I have to spend more to repair it. The owner says that it is about the gutters not being properly attached. And one gutter looked to be a bit loose from the pipe in fact. But I do not believe that 100%. I am having some waterproofing contractors come over to look at the issue. I think that if I had to spend an additional 20k to waterproof the basement then I would get just a fair deal but not a great one. The house is selling for about 50K below market I think.

But if the basement waterproofing cost is about 5k then it would still be worth it.

Mindy, regarding the fact that he is lying I agree completely. If someone has interest I take what he says with very low confidence.

There is always a risk in this business right?

Chris, thanks for the answers. My plan is to rent it and live in one apartment.

I considered those expenses and I would be fine with a 5k cost to repair the water in the basement. If it turns out to be a 15k/20k cost than I start to suffer a bit.

Thank you Mike. Any idea on how to proceed in this case?

Hi all,

I found this duplex in a very nice area in Westchester, NY. 

Here are the facts about the house:

- Duplex. On the market for almost 2 years. Price was $470K in January 2015 and it went down to $430K in August of this year. The house is a two story building with unfinished basement and gas furnace and water boiler. The house had a fire in August 2014, were the stairs that connect the two floors with the basement are. After the fire the insurance paid and he redid that part, the roof, the electrical system and had an inspection from the city completed. The agent says that the buyer is really motivated because he is old and he is liquidating some of his properties.

There is an additional lot that could be used for building garages and a bit more parking. The house is lower than the street level and that got me worried about water.

After the first visit I observe the following:

    ROOF:

- Owner says that the roof has been redone in 2014 and is in good shape.

BASEMENT:

- There is a drainage canal around the walls connected to a sump pump on the corner. The owner also has a dehumidifier on most of the time. I ask him if he had any problem with water in the basement and he denies completely, saying that the sump pump was only a precautionary measure.

FIRST FLOOR and SECOND FLORR:

- Wooden floor and just repainted it looks nice. Bathrooms and kitchens needs to be updated because they have a very old look and appliances. 

After this first look, we negotiate and the owner accept an offer at $388K contingent on the inspection and financing. At $388K the house is at least $50k below market.

After this, we do the professional inspection and we find the following

ROOF:

- Two of the three roofs are flat roof and there are two leaks visible from the inside. The third roof is completely fine and only gutters needs repair. Three estimates from roofer came between $5600 and $8000 to repair them.

FIRST FLOOR

- We find that in the corner under the window the wooden floor is not rigid, and there is sign that underneath of it there was a water infiltration even though it was dry in that moment.

- The bathroom shower has some tiles on the ceiling that are falling, obviously a leak for the bathroom on the second floor. Owner says that a person simply flooded the bathroom on the second floor. Not sure if is true.

BASEMENT

- The gas furnace is about 20/30 years old and it might not last long but is working properly now.

- The gas water boiler is completely rusted at the bottom and has 12 years. It could stop working any moment.

- We find a small puddle of water in the basement where the stairs are. Also some of the wood there is seriously consumed by the water.  The water is only where the stairs are, not in the rest of the basement. On the other side the owner has turned on the dehumidifier again and the basement is painted so it is not possible to evaluate if there is water in other parts. The water must come from some crack in the basement side or some or something similar, because there are not external windows or doors on that side. The fact that it has rained only for 3 days and also the presence of the drainage and dehumidifier make me think that with serious snow (as it happens here) this house might have a problem of water in the basement, also considering that the position is lower than the street.

Given the results of the inspection the owner said he would offer an additional $5500 credit for the roof, but he doesn't want to add more money saying that the water in the basement is caused by the gutters not working properly and dripping water close to the house. With that credit the price would be $382,500 while in the neighborhood houses like this go for about $450k  $430k . Also he is now putting more pressure saying that if I do not decide by this week he will put it on the market at a lower price and he had already refused an offer for $395K. I do not like the fact that he has been  hiding all this issues and also the pressure that he is trying to exert right now that I found out. 

I know that dealing with water in the basement can be very expensive. I am not sure if I should get it and deal with the water issue in the basement, try to get more seller credit or even give up the deal at all. 

Any advice would be very welcome!!

Thanks,

Alessandro

Steve, J. C., thanks for your answers. I will have an inspection done soon, and then I will proceed accordingly.

Steve, thanks for your answer. The point that I should have mentioned is that if I buy the house I have plans to finish the basement and possibly rent it. In that case even a bit of water might be a problem.

I was thinking to add a clause in the contract to be able to protect myself in case there is a flooding. Or maybe finish the basement with water-proof material...

How would you proceed if you wanted to finish the basement?

Hi,

I found a nice two family house with 2 stories + basement in my area. The house is lower than the street level on the front and degrades towards the backyard, it is basically on a slope. The house is in really great conditions and also at a good price. All the units are repainted and in a great shape. The basement is unfinished, just repainted and clean.

When we were looking at the basement I noticed a sump pump and a beaver system. Also, I noticed a little rust on the boiler bottom. Finally, the owner had a dehumidifier up and running. There were not signs of water leak or mold smell, but is also true that the walls and the floor had been painted so possible signs would be hidden. When I asked the owner about the sump pump he said that he had installed it because he is very precocious and that he never really needed it. He said that he did not had water in the basement (of course).

These signs made me think that there could be a problem with water in the basement and I am trying to figure out what's the best way to proceed. I should have an inspection done soon and I will look for more signs. I don't know if these signs are enough to give up the deal or not. Maybe a solution could be to propose some kind of escrow to keep some of the house money until the winter passes. But I am not sure if he would accept it. Any advice is welcome.

Thanks.

Alex

Thank you. 

Yes I am listening to them. I found that the market here in NYC and surroundings is quite different, so not everything applies but they are still very useful.

Hello fellow investors,

After evaluating several investment options I landed into real estate, and eventually to this community. It seems really a giving community, and I am eager to learn and contribute.

I am a professional and I have some savings that I want to use to make my first deal. Due to my limited spare time I am leaning towards the buy and hold strategy. I am looking to 4 units multi-family properties with a good cash flow. Cash flow is really the first metric I use. I am willing to buy something in the areas around me. 

I live in Mt Vernon, and I am looking into some parts of NJ, Dutchess county, and also CT up to New Haven.

Please feel free to give me feedback about strategies and possible good areas!

Best,

Alessandro