My landlord passed away recently. He owned 3 of 5 houses in a HOA. He did not do regular maintenance and the repairs that were done were not permitted. Additionally, the property has cesspools which will need to be converted to septic. His family is interested in selling them as a group due to the value of having controlling interest in the HOA. I am interested in buying them, 1 as my primary residence, 2 as rentals. They are in probate and will not be available until sometime next year.
I'm working to figure out what the offer needs to be so they will cash flow with the cost of upgrades, including adding bedrooms, that can increase value and rent. I'm going pro next month so I'll start running the numbers that way. I'm going to propose seller financing as they have 4 other properties they are selling as well and will have large capital gains already. They don't want to sell them on the open market or be landlords.
I want to game out all the ways the deal could work so I need to figure out in advance the costs of bringing them up to code so I can see if makes sense and negotiate effectively. My long term goal is to have the property completely up to code and upgraded so I can raise the rents and refi.
I don't want to call the town and I don't think it's ethical for me to have an inspection without owner permission or a contract. It's going to be a complex deal, so I want to do as much research in advance.
Any suggestions on how to be able to price out the costs of bringing it up to code would be greatly appreciated. Thanks so much! I really appreciate being part of this community!!
