All Forum Posts by: Geremy Rosenberg

 Thanks @Michael Smythe.  Agent has helped and I requested 3 day extension, so would take me to Friday.  Waiting on seller confirmation to sign that (crucial part I expect hah)

Some good news, got the inspector back to finish the job, and contractors for plumbing, HVAC and framing to come in today and I am waiting to hear back what sort of work needs to be done. 

Again I am still curious as to whether I ask for lower purchase price or get an addendum stating the seller will pay for the plumbing issues and the 2% seller concession which I was told was the max i could get so $3800 to other repairs needed.  

Awaiting a few things today and will have a better sense of how to proceed.

Thanks @Dan Thomas and @Emanuele Mayer for your addl. thoughts.

 @James Mc Ree thank you another good angle for me to consider and more money up front that would need to be invested.  The one tenant on the smaller unit is month to month, and the other one up in April.  My property manager will be hopefully walking both units tomorrow and I will try to have him ballpark estimate what turnover cost could look like with upgrades.  

 @Dan Thomas thank you for your reply and thoughts. Will absolutely push the due diligence time in order to make the decision and if the seller is unwilling given the circumstances, i think as you implied that is perhaps a bigger red flag than anything!

Regarding ARV, thank you for steering me that direction. It is quite difficult to say. The CMA my agent sent came back at 210K with comparable, and 200 seems to be in the ballpark. I should have said in my initial post the seller purchased in May 2023 at 123K and did work on roof, HVAC and HWH and not much else from what I can tell. And then listed at 210K, the seller is the agent too. Presumably has an idea of what it should go for, but it was on the market for 2 months almost, and she lowered the price from 220 to 210. Anyways some more details to share.

 Hi @Lynn McGeein and thank you for your reply.  That gives me a whole new angle to view the deal through.  I will absolutely make sure inspection is completed and move the due diligence period back if I need the time.  In your experience is it more likely to negotiate the purchase price down at this point, or that the seller would pay for the major issue (like her plumbing)?  And would that mean she is responsible for the fix?  I have spoken with my agent and am still waiting to hear how the seller would like to proceed.  All I've gotten is the secondhand knowledge that she would pay for the plumbing issue (her plumber quoted much lower for the job than the plumber my PM/Contractor showed the sewer scope too, and no plumbers have been in yet to look at the issue in person, should happen Monday.)

One last question which i will also attempt to research on my own, how would i best find the land value?  

Thanks again

 Thank you for your thoughts!  I am definitely inexperienced, however going through this process (stepping away or not) has taught me A LOT already.  One example is get the sewer scope done and scheduled before and on a different day than the inspection so if that comes back (like mine did) very bad!  You save yourself on the inspection.

I am pushing on and relying on the confidence of the team I am building in the area and their word!  I hope trust and relationships will get me through and my own due diligence and trust in myself to make the right choices.

@Sherry McQuage thank you for your reply; after reading the responses, an obvious theme is asking for extension on the due diligence period which I have now requested. You gave me a lot to think about, I am confident the rent can be increased and have a contractor/property manager lined up who has inspired a lot of confidence and comes with good references.  I have not paid him a cent yet and he has walked me through the inspection report and prioritized the work in order of importance and what can potentially "wait'.  He will also be walking the property on Monday with the inspector who is coming back and subs.

The termite problem has been treated, but that is a fair point!  Have someone looking at the damage that is visible on Monday. 

The property's age does give me pause, how much confidence should one inspection inspire in finding out the "majority" of the issues with the home?  I understand they may not find everything but counting on the inspection to provide 90% of what needs to be fixed/prioritized. 

Hi Everyone, I am an OOS first time investor and got a SMF built in 1920 (2 units, 1bd/1ba and 3bd/2ba) under contract at 20K below purchase price (@190K) with both units currently rented ($850 and $1200).  I have had an inspector come out and he was able to see the basement and 1/1 unit.  The tenants in the 3/2 had COVID and did not let him in.  

With that context the inspection came back with a lot of issues.  To name a few HVAC for unit 1 is 20 years old and could not fully inspect the heat, the pipe to the sewer has completely dropped and is not connected, in basement the window header, subflooring and joists are damaged from termite activity, and their needs to be some tuckpointing and masonry work done for the exterior brick.  Using a contractor contact the rough estimate of work required is 20-25K.   My agent has asked the seller to take care of some of the work and she has agreed to the plumbing, so maybe 7500 of the additional work to be done.  

I am trying to determine now whether I back out of this deal or think about the long-term potential.  The pros of staying in are below on the appreciation

6.24%Appreciation - 6.00%YoY Rent Growth - 0.41%Population Growth Rate

This was taken from the new BP market finder tool.  Also the rents are below market with Unit 1 coming up end of Sep. so could go from 850 to 1100.  And Unit 2 up in April which could raise from 1200 to 1500, so another $550/mo. in income. The property has a new roof (2023), new HVAC for the larger unit (2023) and new HWH for one unit (2022), plus is in a really good location on 15th st. in Covington, very near downtown. The CMA shows properties like it valued at 210K.

The cons are I have not had a contractor in the property (plan on having that asap, multiple subs if needed and extending my inspection period), the inspector did not see unit 2 (3bd/2ba), but will come back and not charge to finish.  Also the work could end up costing me a lot more than 25K.  

I am having difficulty figuring out how to use the numbers here to see whether i cut my losses or proceed knowing some major capex work could be done after renovation, so hopefully no major expense in the near to medium term, and all the potential of the area in price growth and rental growth.  

Please provide any advice on how I could/should be thinking about this.  I am so excited to get my first place, but want to ensure it is the right move.  Thank you everyone for your help!

 Hey Travis I am in a similar situation to the author of this post and would love to get your advice about the market as well.  Would love to connect

 Thanks Dmitriy, another great resource on this site!