Hello friends, easy consultation with the forum. Following the Insight I made for MultiPharmy, I am currently ...

Hello friends,

Easy consultation with the forum.

Following the inspection I did for Multi Family, I am currently in the inspection period where I can waive the deal - I entered into a contract after deducting $ 30 from the asking price while stipulating in the deal that I buy the property as it is but of course based on the findings I want to improve positions.

First thing when I started blinking with the sellers about the deal after the test was done, I definitely get the feeling from them that they want to sell that is already good. You have already noted in the previous post the many advantages of the property which are mainly its location is superior black, but also a new electrical system, a heating system replaced gas and new boiler, and tenants who pay all the heating costs.

What I'm trying to do right now is one of the two:

1. Significantly lower the price of the property according to the findings - here I am sure I did not reveal America to you

2. I feel there may be an interesting opening in this landlord loan deal - according to the property owner's rent-rolls reports his monthly mortgage payment is about $ 500 a month which is about $ 1000 than the payment I will pay due to him owning the property for many years Him at a low price and the interest rates he received at the time might have been lower. I do not know how much he has left to pay on the mortgage but for me it may be interesting that he stays with his mortgage and that I pay it to him every month + cash flow. For him I do not have a headache of managing the property, and for me I have saved about $ 1000 a month in cash.

what do you think? I know there are some experts on the subject

A response from the broker after I sent the findings of the examination:

Lior, what areas are you most concerned about?

You should focus on getting proper information regarding remedy options and pricing on those items. Inspectors are usually not contractors/nor do they own construction companies, and therefore, do not really have remedy options or pricing. Their goal is to point out everything they see to cover them from any future liability.

From what you listed I see 4 areas of concern:

1. Roof - You are getting an estimate from a roofer tomorrow. Hopefully it is not the one who gave you a $35,000 price.

2. Evidence of prior fire - I heard the inspector point out some charring and a prior fire, and that he recommends that you should have it further evaluated.

Regarding this fire, I will note that there have been recent inspections by the Fire Marshall and certificates of occupancy, if any prior fire damage was not property rectified according to the fire marshal and the building department, the units would not have certificates of occupancy. You can call the City of Meriden and ask the Fire Department or the Fire Marshall to send you any reports or violations.

3. Wood Destroying insects - you can get an exterminator to look at this

4. Structural Engineer - beams in basement - please let us know if you are coordinating an engineer to evaluate this.

That's the answer I sent back -

Hi,

I have consulted with my investment group based on the inspection videos. As to the roof tomorrow we will get an exact estimate from 2 roofers that I sent in and we will know better.

As to keeping the roof, you are right, this is what the PM mentioned as to maybe I can pay it in a few months using any positive cash flow but honestly i dont see positive cash flow with this property as the maintenance will be very high and the tenants condition. The PM was very helpful and informative on the phone.

The problem is that now one tenant is out so what ever extra cash flow that might have been in this property is gone. I was not notified about that before doing the inspection. I was told its fully leased. That means I will lose money every month until this unit is ready, and the unit will need updating to get a tenant in there - especially fixing the rocking floor. Also I did not know that the tenants are on month to month terms - I was under the impression that they are on long term leases - which make me feel more comfortable on the cash flow. Some of the tenants are there for just a couple of months. The bank usually prefers long term leases as well.

I do not have any history of maintenance job that was done to this property.

I do not have eviction history.

Do not have expanses like snow removal.

Also does the overall reported annual income includes the deposit?

As to WDO and Structural condition - I will try to schedule but I want to make sure that I am not going to lose my down payment so that's why I wanted to

Based on the report this property looks like a money pit with endless amount of expanses and it is clearly shown that every part of it was neglected and the fixes that were made were made as patches. The landlord is trying to sell it for top dollars. When I signed the agreement I was not disclosed on a new roof that is needed, siding that are broken, structural damage, new roof, issues with the flooring thaylt are broken, baths that have halls and leaks, electric sockets, lights, fire detectors etc. that are out of place, driveway that is in the end of his life, broken stairs thatvare shifted by earth, live wires running around the property and the list goes on and on.
This property would be a huge head with endless fixes. It needs a complete turnover.

I do believe that every property has its price but its certainly not the price in the contract based on the current unexpected condition.

The current monthly mortgage payment on this property is about $ 500, but mine will be at least $ 1000 extra. Other than that the seller managed it himself - I will need to hire a property manager, so all these affects my cash flow compared to his.

One of the only othey solutions that I can see with this property other then drastically lowering the price or that landl getting the major ticket items fixed, is for the seller to keep his mortgage and sell it to me with owner financing so I will pay him the mortgage while he maintain his mortgage.
He will still have the cash flow but not the headache of dealing with this property and I will save money on my financing so that can be a win-win situation.

I am happy to speak tomorrow around 10: 30am

Thank you everyone and good night

Lior

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