The proximity to a defect like this bad neighborhood can be significant.

Because that sounded a red flag we passed on the deal just to find out there was a major defect on the property later.

It may well be that this was an invisible defect that manifested itself suddenly and catastrophically.

Rule #2 NEVER forget rule #1.Forgetting the owner is likely over reporting income while under reporting expenses.Thinking you can do it all without getting advice or help from others experienced.Thinking I have learned enough I don't need to learn anymore.Failing to acknowledge and address defects with a property.Paul

I assume they do it below.I am betting that any Investor who is wise is going to factor in a % that goes into an emergency repair account, just in case they missed a defect on the furnace and it goes on the blink next week, or three months down the line.

Amy, in this case, don't you think that the tenant would complain (or argue, in court) that the toilet was improperly installed/defective?

You'll need a detailed punch list to justify your price and reasonable profits.That's on the construction loan side, BTW, if you want to hold them, you'll need to ask for the loan to roll over to the end loan.Inspect very carefully if you plan to sell especially as you'll be responsible for defects of a new home.Good luck

Do you fix the defects by yourself or use the local handyman?

The minor defects and cracks also done appear to be causing an issue at this point.

If the attorney is offering to issue a title policy post purchase ask for a pro forma commitment before bidding so you can see what exceptions to title will be taken so you'll have some idea of what defects in title will not be covered by the policy.