4-plex: Inspection Results and Our Decision

While driving home from work last night, I received a call from the guy who did the inspection for the 4-plex. We talked for a good 20 mins as he went over all the items that he inspected. It turns out the property is worse shape than I had thought. The major items the inspector found included the structure, the electrical, and the heating.

Electrical - The entire electrical system is in bad shape and should be inspected and fixed by a licensed electrician. The inspector talked to the owner while there and the owner told him he had made some fixes to the electrical system. The inspector noted that one of the things the owner fixed was not only a potential fire hazard, but probably illegal (he said he was essentially "stealing" electric). He went on to say that some of the electrical is not even up to code.

Structural - The structure itself is in bad shape, and will require extensive work in order to support the roof. He is very worried the roof will not support a heavy snow and could collapse due to the inadequate support beams in crawl space. He recommended that it be repaired immediately. He also said many pier posts needed "capped", and that that the flooring is unstable in areas.

Old/Outdated Heating - The heating elements in three of the units are old and need replaced. He said the owner's unit does not currently have a heating element.

There were a lot of other "minor" issues, like damaged screen doors, a non-working and hazardous gutter system, old water heaters, a bad sink trap, a bad toilet, excessive moisture due to property being on slope and poor ventilation, no smoke or CO2 detectors, and on and on.

The inspector said that in his best estimation, it would take a minimum of $10,000 (and probably more like $15,000-$20,000) to fix the items in order to bring the property to code and make it livable.

After hanging up, I then shared the disappointing news to my wife, and we both agreed that we would not be purchasing the property. I told her based on my conversation with the agent in the past, I don't think SHE even realizes in what piss-poor shape the property is in. I even doubt the owner himself knows the seriousness of what he currently has. If there were a fire or the roof were to collapse or any number of things right now, he would up to his eyeballs in litigation.

So, I wrote a lengthy email to the agent explaining what the inspector told me about the place. I concluded the email by saying that from past conversations with her and the one I had with the owner, he is reluctant to make any more repairs. Additionally, the owner did not want to come down on his price. I told her that given the results of the inspection, the owner would either need to repair ALL of the major problems (i.e., electrical, structural, and the heating) -OR- we could renegotiate the sale at a significantly much lower price. If the owner was unwilling to do either, to let me know at once what steps I need to take in order to be refunded my deposit. I also left her a brief VM telling her I sent an email re: the inspection, and to contact me immediately if she had any questions. That was last night, and I have not heard anything yet.

We'll see what happens.