I found a REO fixer. Upon initial walk through, it seems the bones are good. However, on the 1st and 2nd levels, the floors are not level. I notice it when walking, and would not be interested if I were a buyer (i’m considering this house for my primary res. then 1031 later.)
I know that a structural eng. should inspect the property, but my question is: are the floors more trouble than they are worth? Will the issue recur?
Any repair estimates are appreciated.
If you notice it walking (not just with a marble) it sounds bad enough that it would turn most buyers off. Sounds like if you bought it you would have to fix it or severely discount it to sell it to the average buyer. I’ll bet if the buyer doesn’t find it on the walkthru the buyer’s inspection will…
Repair estimate could vary widely based on what needs to be done and where the house is located. Hell 3 contractors for the same job in the same area could be off by huge amounts. If I were you I’d make a LOW offer, low enough to more than cover this and all other repairs and lock it in. Make it subject to inspection and get 3 foundation guys out there to quote it, if the quotes come in too high either back out of the contract or renegotiate it. At least having 3 quotes in hand allows you to have bargaining tools when trying to get the bank to discount it.
Thanks Rich. I was thinking 50 cents on the dollar. The house has an unfinished basement - i.e. dirt peeking through concrete; no smell however… and I don’tknow WHAT the former owner/flipper was doing on the 3rd floor - pipes coming up… plywood everywhere. maybe he was thinking in law suite.
My greater concern/expense is the floor.
I don’t know if you bought the property with the intention to rent it, or with some other intention, so its hard to advise.
What I tell most REIs that I come in contact with that are looking to buy & hold & rent a property, is before they start looking for the property the purchase, or even start looking for the financing options, research the local state Residential Tenancy Laws and decide if the state/region that you are looking to buy in favors landlords or tenants in court.
This is, IMHO, the single most important factor of a stress free ownership of property, particularly if you are intending on renting it. Some states have ridiculous statutes that favor tenants so that the eviction process can take 9 months (NY state is a great example of this). Other states (such as AZ) are incredibly supportive of landlords and a properly executed eviction will take about 25 days to get someone out of your property.
The fact is that you have to abide by the local laws in your region, so blindly buying a property without understanding these laws is suicide. But since I don’t know your local laws, you should find a local attorney who can give you proper legal advice and ideally execute the eviction process on your behalf. If you don’t, and a judge finds that you are not following the process on this, you could have free further tenancy awarded to your deadbeat tenants whether you like it or not.