How to Deal With Colorado Investment Property Seller Repairs

by David Gerlitz on August 23, 2011

As an Colorado real estate investor, you are probably putting in some not so high offers on income properties and investment properties and attracting not so willing sellers. That having been said, it is still worth it to talk about how to deal with seller repairs.

How to Deal With Seller Repairs

Say you have scoped out a property to consider for an investment, and it’s in need of repair. So what do you do? Well, there are a number of options and what you choose depends on how handy you are or what kind of time frame you are dealing with in procuring the property.

Without a doubt, the most important thing to do is to have a home inspection done, yes that is right, EVEN on investment properties. Be sure to put into your contract that it is contingent upon an approved home inspection. Approved does not mean that everything on it is fixed – regardless of who is going to do the repairs, you need to know what needs to be fixed and an estimate on what it will cost.

One thing that you can do is… nothing! If you have the know-how to make repairs or if you have a team that can sweep in and get it done, you may have much more leverage on the purchase price if you allow for needed, outstanding repairs.

Is there a specific contractor that you want to use to have any repairs done? Well, the easiest answer to that is to get them to the property to inspect, and have the write an estimate about what it will cost. Then when you make an offer or counteroffer on the property you can include the estimate to justify any discount you are making in the offer. Two things could happen. One, the Seller could say “great, now I don’t have to deal with repairing it” and take the offer, or they could counter with an estimate of their own. Either way, it is a negotiation tool that can help in lowering the price you pay for the property.

Most Colorado real estate investors will want to negotiate to have the seller make the repairs prior to settlement or to have the terms of the contract stating that they repairs are going to be offset in the purchase price early in the process.

If you are looking for Colorado investment properties, give me a call today and I will get you a list of what is on the market! 720-306-8017

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{ 1 comment… read it below or add one }

Robert Beery September 17, 2011 at 8:19 am

Please call me regarding the financing of aduplex which happens to be zoned mixed use. Apparently the property cannot be financde via a convential Fanny Mae loan since it can be considered a commercial property.

Thanks
Rob Beery
303-918-1170

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