All Forum Posts by: Eric Rodriguez

@Mike McCarthy thank you for your suggestion, however this does seem like a more expensive option and we would like to have the lower unit rented quickly and have a fully operational and adequate septic installed prior so that we may avoid problems in the future. Hopefully we can either negotiate a lower purchase price or ensure the seller takes care of it before closing so as to help our pocketbooks in this transaction 

@Nicholas W. Yes, it was the home inspector who determined it was inadequate. Upon inspection there was barely a foot of clearance to the top of the tank, however this could be due to rainwater seeping in due to an ineffective seal and it likely needs maintenance due to the baffles potentially being clogged. But the main concern is the rerouting of all the waste from the lower bathroom and the washing machine being discharged onto the lawn. It seems this was done to prevent overflow of the septic, so therefore seems safe to assume the septic wouldn't be able to handle the extra load if the plumbing was corrected to discharge into the septic. The listing however claims only two bathrooms, not three so the basement bathroom may not even be permitted. We have inquired about this and are awaiting a response, but if we rent the lower unit then it need to be set up as a 3 bdrm, 2 bath with laundry in order to command the rent rate it needs to make the numbers work. And yes, it needs to qualify for FHA.

@Percy N. Agreed, the other issues are minor but would have to be fixed to qualify for the FHA loan so we move forward with house hacking. The mold is minor because the inspector believes it was due to an older roof which has since been replaced. Once remediated, he doesn't see it causing any further issues. Thanks for the tips, the ARV is around $250k.

@JD Martin Yes, that's what we're worried about, that's why we're trying to tactfully go about this and offer another option if it makes sense for us, so that we don't lose out on the deal because the numbers on it are good. If we can renegotiate the price down a bit we may take on the septic ourselves and either way would be getting a satisfactory inspection report. Thanks for the advice! 

Good morning,

We recently got an accepted offer on a two family investment property and proceeded with our inspection the other night. During the inspection we found a few issues. Most significantly, the septic was not a suitable size for the home. The previous, quick fix solution was to route the basement bathroom waste and the basement washer waste out via pipes to the exterior of the home onto the lawn, which was showing evidence of soil erosion due to this "solution". Obviously, this is not legal and we need it fixed. There was also some mold in the attic and a few other minor issues like leaking pipework connections under the sink and not-to-code outlets. Our bottom line is, we were using an FHA loan for this property, and it won't pass with the home in its current condition. Our question is this: Do we try to go with a 203k loan and take on this project by ourselves after obtaining a septic inspection/estimate? Do we ask the seller to take care of it (and the other issues), and hope, even though they've avoided shelling out for an upgraded system so far, that they'll fix it? Would there be any other strategies we could consider and what would be the best strategy to handle this? We have already negotiated them down before the inspection to $180k with a $10k sellers concession and their original asking price was $190k. Any ideas/thoughts are greatly appreciated, thanks!

@Evan Thomas

In my opinion, the best option is to have direct access by becoming a realtor, that way you can ensure you are on top of newest listings. However, I know some people don't have the time, money or whatever the case is, to have their Real Estate License. In that case find an Realtor that is motivated and knows about real estate investing. Have them setup new listings automated alerts directly to your email, so you can get the newest listings based on your criteria as soon as they come up on the market.

@Evan Thomas 

Hi Evan, 

House Hacking is a great way to start investing in Real Estate, you will learn a lot! My girlfriend and I started house hacking in Rockland County NY and we are up to our second multifamily house living all covered. My advice is to obtain MLS access to get ahead and find good deals, in our case my girlfriend is now a realtor. Peekskill, Ossining and Terrytown have decent multifamily inventory with moderate taxes. You can find A, B and C type of neighborhood around that area.