The building we are purchasing is a 5 unit 9500 sq ft strip mall. During the due diligence period it was determined the mall needs a new flat roof. The purchase price is a little more than 400k, and the cost of the new roof is 40k. Any opinions on a split between buyer and seller on the cost of the new roof. Thanks in advance for any input.
Pretty easy question. You can ask the seller to pay for all of it, you can pay for all of it, or something in between. If you're getting a screaming deal, I wouldn't suggest asking the seller to pay. If you have a problem financing the reroof, you can do what I did. I bought a 17,000 sf mixed use building for $100,000, a SCREAMING deal. It needed a new roof at the cost of $25,000. Since I was getting such a great deal, I did not ask the seller to pay for it, but instead increased the sales price to $125,000 and had the extra $25,000 put in escrow for the roof. Neither the lender or the seller had a problem with this. The seller got the same net capital and the lender got their collateral improved.