All Forum Posts by: Account Closed

If anything, this was a great learning experience.

@Dennis M. thank you for your insight.

@Ryan Rominger What was surprising to me is that my realtor told me that some investors do not do an inspection. So I'm assuming the seller didn't know about the property's condition.

@Ross Denman I appreciate your thorough advice. It did seem the seller was hiding something when it took 3 weeks to get a tenant ledger. Even then, I only got two months worth.

@Sam Shueh I ended up passing on this. Too many concerns and didn't have a good feeling about it.

@Mark Jones Appreciate your advice. It makes sense to not have a seller do the repairs. I ended up not going through with this. 

Looking for some advice. This is a property in Indianapolis, IN. All the numbers are accurate. The purchase agreement was signed on 12/18.

After receiving the inspection report I was very hesitant to continue. The seller initially asked I sign an "As is" addendum. However, the seller has agreed to address all of the major issues found on the inspection report (also listed below).

It's also been very slow to get any income/expense ledger from either the seller or current property management. So far, I've only received two months of income and expenses. In the second month, the current tenant was 16 days late on rent payment.

Below is the link to my report and also the itemized major repairs listed by the inspector.

Questions

1. Would you go through with this (Please explain your reason)?

2.  Should I ask to see all evaluations from the contractors? I'm worried the work will either not get done or poorly done.

3. Is it possible the seller really didn't know the condition of the property? The seller disclosure document had about 95% stated as "Do Not Know".

At this point, I'm not sure if it's worth it to continue, hence this long post. I appreciate any and all advice.

View report

*This link comes directly from our calculators, based on information input by the member who posted.

• The surface of the shingles have pitting present on the small rear roof and on ridges and peaks on the main roof. There are heavy stains on the North facing shingles and the granular material is loose on shingles, which are signs of wear and age and indicate that the roof may be nearing the end of it's useful life. Additionally we did see multiple scars/dents in the rear porch shingles, these could be due to tree debris, but could also be due to a past hail event. Due to the wear and issues mentioned above, we recommend the roof be fully evaluated by a qualified roofing contractor.
• The chimney is missing a rain cap on the top to prevent animal entry, the flue tiles inside are uneven and appear to have gaps present. The chimney has loose brick and mortar around the top and gaps and cracks in the brick and mortar around the sides. There are also gaps in the flashing at the bottom of the chimney. We recommend the chimney be fully evaluated by a qualified roofing or chimney contractor.

• The front porch steps are different heights and present a tripping hazard, they are also missing a handrail for safety.
• The rear deck railings do not meet today's safety standards and are too far apart. The rim board/joists around the outside appear to be attached to support posts with screws/nails rather than bolts. We recommend it be evaluated by a qualified framing contractor for safety.
• The rear walk to the garage is heavily deteriorated and uneven and presents a tripping hazard.

GARAGE

• There is biological growth on the surfaces of the walls and roof decking in the garage.
• The top plate on the wall on the South rear side has rot/deterioration present.
• There are large gaps between the garage foundation block visible from the interior and mortar gaps visible on the exterior. We recommend the garage foundation be fully evaluated by a qualified foundation contractor.
• The ridge/peak shingles on the garage are cut dimensional shingles and are not designed for this type of installation, they are uneven and raised at the edges. The garage shingles have heavy wear on the surface of the shingles, with loose granular material. There are scars and dents on the shingles that could be from falling tree debris, but could also be due to a past hail event. We recommend the garage roof be fully evaluated by a qualified roofing contractor.

HEATING / COOLING

• Due to the cold outdoor air temperature at the time of the inspection, we only cycled the AC unit for a very short time to ensure it was operable. It's ability to operate and cool properly is unknown and could not be determined at this time. Recommend it be serviced and inspected by a qualified HVAC contractor when weather permits.
• The exhaust flue for the furnace enters the masonry chimney and has some gaps around this penetration. There is also an opening for a flue that is no longer installed directly above it. This opening is allowing for combustion gasses from the flue pipe below to leak out into the basement area. We recommend this be evaluated as soon as possible by a qualified HVAC or chimney contractor.
• The furnace filter was heavily covered with dirt/debris during today's inspection and could not be removed without damaging the filter. Due to the restriction in air flow it would create we did not reinstall it but left the furnace without a filter to prevent damage to the furnace.

• There is a cast iron sewer or drain pipe on the floor of the South side of the basement, there is an open clean out missing a cap or covering on this pipe.
• The drain below the bath tub was leaking/dripping during today's inspection.
• The service wire to the water heater is not enclosed in conduit or a protective covering to guard against accidental damage to the wiring or its sheathing.
• The water heater TPR valve is missing the extension pipe to the floor for safety.

• The house has some of the old knob and tube style wiring. This type of wiring was standard when the house was built, but now shows signs of improper connections. We recommend that you consult with a licensed electrician to evaluate the integrity of this wiring and make any needed repairs or replacement. Extra caution should be used when making any additions or changes to this wiring.
• The main electrical panel box appears to be new and recently installed, however it is very loose to the wall where it is attached to deteriorating boards and also has rust on the lugs on old breakers installed inside. We recommend it be evaluated by a qualified electrical contractor or engineer at this time.

KITCHEN / LAUNDRY

• There is a stain from biological or fungal growth on the inside bottom of the kitchen sink cabinet.
• The kitchen GFCI outlets did not trip when tested with our tester(button on the outlet did work), and also tested as being ungrounded.

• There is no anti-tip bracket installed on the back of the stove to prevent tipping when the oven door is open. The back door has gaps in the weather stripping at the top through which light can be seen.

BATHROOMS

• The bathroom GFCI outlets tested as being ungrounded and did not trip when testing with our tester (it did trip when the outlet's button was pushed).
• The bathroom is missing a window or exhaust fan to help control moisture.

• Kitchen and dining room windows have cracked panes of glass, many of the windows have damaged cords at the sides and no longer stay up when opened. Many of the windows also have loose sash chords at the bottom and damaged areas along the bottom sash chord as well. The right side dining room window has a damaged lock and the bedroom windows are very loose, one would not open and has gaps at the top and bottom. We recommend all the windows in the home be evaluated by a qualified window contractor.
• All of the outlets in the home are 3 prong outlets yet tested as being ungrounded. We recommend they be fully evaluated by a qualified electrical contractor or engineer.
• The front bedroom closet has foam insulation installed as the ceiling but has gaps around the sides that are not fully fire blocked/fire sealed to the level above.
• There are moisture stains and biological growth at the bottom of the rear bedroom closet wall opposite the bathroom.

• We could not find attic access in the interior of the home, there was a window on the front of the house over the front porch but it was caulked/sealed shut and we could not open it without causing damage. We did unscrew a board covering a gable vent opening on the front of the house and only had visual access from this vent opening, as it was too small and too high to safely enter the attic from this opening. We recommend proper attic access be provided for more thorough inspection and maintenance access to components within.
• The wood framing and rafters around the chimney have moisture stains and the brick and mortar of the chimney has heavy moisture stains and efflorescence. We recommend it be evaluated by a qualified chimney contractor (see Roof page for more chimney info).
• There appears to be an open, and possibly unsecured, junction box at the rear end of the attic.

• The basement stairs have loose/damaged steps, are sitting on loose boards at the bottom where the stringers have rotted/deteriorated. The support at the side also has heavy rot/deterioration at the bottom.
• There are open junction boxes in the basement ceiling.
• The block walls of the foundation have many areas with moisture staining and efflorescence, heaviest at the bottom, but present throughout the basement. The wall on the South side is bulging toward to the top/middle area as though it may have shifted or moved. There are gaps around the old furnace oil pipes on the South side near the crawl space wall. There are many areas where the block mortar is gapped, cracked and heavily worn. There is a large crack in the corner just beside the electrical panel box and gaps in the concrete with bare wood at the front South corner of the crawl space and a large crack in the front middle of the crawl space. We recommend the foundation be fully evaluated for both moisture intrusion and structural integrity(movement) by a qualified foundation contractor.
• We found a biological growth on the surface of wood framing, joists and sub floor in the basement/crawl space area. We found heavy growth below the bathroom and kitchen plumbing. We recommend it be fully evaluated by a qualified remediation contractor at this time.
• The boards below the bathroom plumbing are rotten and broken and heavily stained with bacterial and fungal growth, there is also a leak in this area .

@Joe Prillaman thank you for the inspiration.

I'm in the process of purchasing a property that is currently tenanted and managed. I've been in communication with the current PM and received a sample management agreement. Since this is my first property purchase, I'm not sure what I should be concerned about and what is reasonable in an agreement.

The agreement is 8 pages, so I'm hesitant to copy/paste the entire document into this post. If it's suggested to have a lawyer review the agreement, would anyone have recommendations to whom I could reach out to?

Appreciate any assistance.

@Joel Owens This will a conventional 30-year fixed mortgage on an SFR. The purchase price is just under $60,000.

My mistake was not talking to more lenders. I did call up another lender and was able to secure a much better interest rate.

@Tim Johnson this is an investment property in Indiana.

@Kath Marie @Account Closed Thank you all for your valuable insight.

My lender provided me a rate of 6.375%. This is for a 20% downpayment. If I put down 25%, I can get the rate lowered to 5.75% (a decrease of 0.625%.

This does raise my cash on cash return. Should I do the 20% or 25% down?

Appreciate any advice.

@Caroline C.

@Lee Smith

Thank you both for your suggestions. When I call them, should I mention the property I have under contract or just ask them questions?

@Lee Smith thank you for your insight. I'm unsure of the source of bad reviews and I've not been able to find anything from more reputable sources, such as BBB. For now, I don't plan on replacing the current PM.

It seems like property managers have a tough job by dealing with owners and tenants. I'll keep that in mind when communicating with them.