Posted by Bill - FL on September 07, 2002 at 10:40:18:
Dan,
First of all the “unit mix” one-3bdr. and two-1bdr. is not very compatible. You are mixing singles with families. Depending on the type of termite, damage can be very extensive. On all brick construction the major problems will be interior studs, mouldings and roof rafters, soffit and facia board. Any offer should be subject to a satisfactory inspection by a licensed pest control company. Something the previous owner never did. Also you say you have no money. How is your credit? If that is not good and the owner will not help I don’t see how this could work out. Where is the cash going to come from to pay the RE comm? If you have no cash or credit, stick to assignments, subject 2s, and lease options to start.
Posted by Dan Fletcher on September 07, 2002 at 10:17:36:
I have found a property for sale that has termites. I am going to look at the property on monday. It is a three unit. It has 1 three bedroom and 2 one bedrooms. Off street parking and central air. I am not sure of the extent of the damage but the property is listed at 82k. The realtor said the owner is motivated because he bought the property at the courthouse and was not aware of the termite damage and now want out of it. She said he would be willing to take less(I should hope so). Two units are currently leased out. One of the one bedrooms is vacant. The one bedroom brings in 325/mo. The three bedroom brings in 575/mo. The other one bedroom was last rented for 375/mo. Thats a total GOI of 1275/mo. Sounds like instant cash flow as long as the repairs aren’t out of this world. BTW the building is a brick construction so the termite damage isn’t going to make the house fall down I don’t think. They did say that the house was purchased 5 years ago and only recently did they become aware of the termite problem. How much wood can termites eat in 5 years? Alot i’m guessing. What is my next step. I think i should make an offer. The realtor said the property owner could not owner finance and I don’t have a down payment. I would like to buy and hold this one if the cash flow is going to be significant. All feedback is much appreciated.
Posted by Jerry Martin on September 07, 2002 at 14:34:15:
Dan, your termite situation depends on which species of termites the building has.(Reticulartermes, Coloptermes. etc.) Have a licensed Pestologist inspect the property and issue a report. After that get a licensed home inspector or contractor to do a structual inspection and issue a structual report.
The subterranean termite live 25 to 30 feet under ground and is treated with a liquid chemical barrier and the drywood termite lives in the wood in the structure and has to be fumigated by placing a plastic tarp over the building. As far as damage I read that a colony of termites can eat a 2x4x20 in about 6 months so you need to be a sure as possible. An inspection only reveals the visible damage so there may be hidden damage when you start repairs. I wish you well. God bless.