All Forum Posts by: Kelli Standekar

Quote from @Eliott Elias:

I would use it as an opportunity to discount the price even more

I contacted a foundation repair company to come out and provide an estimate for repairs...will present to seller and ask for price reduction.  Do you ask for the full amount (for example if it's 5k) Thanks!

Quote from @Eliott Elias:

I would use it as an opportunity to discount the price even more

Under contract on a single family home and inspection found cracks up to 3/4" in sections of exterior cmu foundation wall. Is this a deal breaker? What are repairs options and associated costs? Can I ask for money off from seller? if so how much?  Any advise higly appreciated! 

Hey BP!

I will be closing on my first rental property (duplex, 2bed - 1 bath each) within the next month and need help deciding what to do with the tenants that currently live there. The current owner does not have a lease (he said he lost it), however I made the tenants fill out an estapol agreement so I have basic information about their rent amount, utilities...etc. The tenants are on a month-month lease and have been living there for around 8 years each. Current rents are below market one tenant pays $425/month the other $450/month. One person has a dog (Spaniel) and I believe he smokes as well. I don't like either of those things in my unit so I am considering the following options:

Option #1

Ask both tenants to leave 30-days after I take possession of the property , renovate the units on the outside & inside (gutters, siding, interior paint, floors, mini-split units, ceiling, other miscellaneous things) then raise the rents to around $700/month each and look for good tenants (no smokers, no pets, good jobs) to put on a 1-year lease.

Concerns: I question whether or not this is the right thing to do since the virus has many peoples struggling with their jobs and I don't know if its right to ask the tenants to leave during this "crisis" (they have lived there for 8 years and have been paying rent). I also worry that finding new tenants during this time might be hard.

Option #2

Serve tenants notice that I will be increasing the current rents since its below market to $500/month each plus $25/month pet fee) and let them decide whether to stay or leave. I will only renovate the outside (new gutters and siding) but leave the inside as is since the tenants have lived there for around 8 years.

Concerns: I did not personally vet the current tenants and I worry the dog and smoking might damage the units (so far, the units look fine on the inside). On the other hand, they have been there for 8 years and paying rent so that is a plus.

Hope anyone can provide some insight on what to do for someone in my situation and I greatly appreciate your help and ideas!

Thank You BP!

Kelli

*update

my realtor sent out a plumber and electrician to look at the issues listed in the home inspection report. Still waiting von the electrician but plumber said moisture in bedroom and mold behind water heater are not from plumbing. So it might come from the holes in the siding? I will meet a contractor at the property soon to look at the stains again and try figuring out what causes it. Mold might be from an old water heater since the one with mold next to it is only 3 years old. Realtor said seller is willing to fix anything that needs to be fixed and that he didn't know about issues since tennants didn't say anything. I have already a quote for siding and will get quotes for water/ stains in bedroom, mold on wall, gutters, electric....Then make a list and present it to the seller to ask for it to be fixed. Not sure if he is really willing to fix everything but we will see. We have till April 1 before we planned to close. 

Any thoughts or suggestions on our strategy moving forward? Thanks in advance!

Kelli

*Update*

After seeing the home inspection report, the seller sent out an electrician and plumber to take a look at the issues listd. My realtor (who is also an investor himself) will also take another look at the windows. I got some quotes to fix issues I beleive need to be fixed either by the seller before closing or I will ask a credit from the seller at closing. 

1. New Vinyl Siding (entire house) - $4,000

2. New Gutters (Front and Back) - $1,000

3. Replace broken windows (3 - Total) - $1,000

4. Replace window Panes (3 - Total) - $1,500

5. Fix loose wiring in Attic - $1,000

6. Fix Wiring issues (grounding...) inside home - $500

7. Trim back existing tree - $300

8. Fix existing mold spot by water heater (scrape, repaint, reseal) - $200

9. Other General Issues (Missing Smoke Detectors, Oven Range Brackets...etc) - $500

So the total estimated repair I think needed would be around $10,000. I am under contract at 100k but considering the issues found and assuming the water/mold can be contained (and is not anywhere else or spreading) by replacing the siding and adding gutters I will ask the seller either to repair these issues before the closing or credit me the money or reduce the price to $90,000.

What is everyone thinking about my cost estimates? Is my approach correct? Any thoughts and ideas are much appreciated!

Marvin

Thanks everyone for your reply! I will definitely think this deal over, re-run the numbers and probably go back to the seller to ask for a lower price. My realtor is looking into the issues the home inspector found in more detail, especially the source of the water in the bedrooms. Although I really want to finally own my first rental property, its not worth buying a bad deal. 

Hello Bp Community,

I'm in the process of purchasing my first rental property (Duplex) as a long-term buy and hold. I met with the home inspector this morning and after reviewing the property and report, I have a couple of concerns regarding his findings. As this is my first deal, I wanted to get help from more seasoned investors on weather the damages found are a deal breaker or only cosmetic repairs that could be fixed over time. I am especially concerted about the following items:

1. Water in bedrooms. - Home Inspector said it could come trough holes in the vinyl siding (water build up behind wall) on the front of the home and leaking into the bedroom. Not sure if I buy that.

2. Stains visible on the roof structure - Roof Leak?

3. Loose wiring in the attic - Fire Hazard?

4. Broken windows and trim - Expensive to replace?

5. No ventilation over stove or in bathroom - Moisture built up in home leading to more damages?

6. Missing or damages smoke/fire detectors

7. Water heater from 2004 - Needs to be replaced at any time?

I would greatly appreciate any input or thoughts anyone has with regards to the issues (and corresponding pictures below). The duplex was built in 1975, 759 Sqft, 2-bed, 1-bath (each unit). We are under contract for 100k, sellers is paying 3k in closing costs and will provide 1.2k after closing to repair some of the damaged vinyl siding up front. Market rents in "as is" condition around $500 - $550 each (currently rented only for $450 and $425). After fixed up (New heating units, floors, paint, siding...) around $650-$700.

After reviewing the home inspection report, should I walk away from the deal? Reduce the price? Get seller to fix some of these items before closing? Thank you again for you thoughts and suggestions!

Thank you in advance for your feedback, it's much appreciated

@Kiley N. @Caleb Clay @Sharon Williams My husband and I are planning to go to the REI meeting in Huntsville Monday night. Hope to see you guys there too!

As a new investor I am a little intimidated by auction properties. Does anyone have any experience buying them? Is that something you would recommend looking into to get a better deal or are there just too many risks involved? Any advice is greatly appreciated.