A Quick Recheck Before Closing Saves Thousands

A real estate deal can look airtight on paper, then fall apart the moment you open the front door. That’s exactly what happens when we go back to Milwaukee to do a last walkthrough on a portfolio we’re about to close and the “light rehab” vacant houses hit us with humidity, odor, visible mold, soaked carpet, and wet subfloors.

We unpack the real mechanics of how this happens: winter-to-spring thaw, properties that weren’t winterized, pipes that freeze and then burst, and water that quietly spreads under floors and into walls. What started as a plan for basic upgrades like flooring, paint, and kitchen touch-ups turns into a conversation about full gut renovations, mold remediation, leak detection in older plumbing layouts, and even the risk signals that point to roof issues. If you’re buying single-family rentals, a small portfolio, or any vacant property, this is a practical primer on why “check it before closing” is not optional.

Then we get into the business side: exterior repair bids for siding, soffits, fascia, and gutters, why drainage matters even without a basement, and how quickly your numbers can break when scope expands. Finally, we walk through the negotiation and the contract protections that matter when there’s a material change before closing, ending with a restructured plan from 15 houses down to nine, a mostly occupied mix, hard money to close, and a refinance strategy after stabilization.

If you want fewer surprises and better underwriting, press play, then subscribe, share the episode with a real estate investor friend, and leave a review. What’s the one thing you always verify on a final walkthrough?

Transcript

Why You Recheck Before Closing

Mold And Water Damage Reality

Budgets Blow Up Into Gut Jobs

Exterior Bids And Gutter Math

Another House Shows The Subfloor

Negotiation And Contract Protections

New Plan For Nine Properties

The Core Lesson And Wrap Up

SPEAKER_00 0:10

What's up everybody? Today is gonna be an update video from just yesterday where I said I was gonna be closing on 15 of these lovely single family houses. Uh it turns out I'm only gonna be getting nine of them, and I'm gonna explain exactly why. Basically, when I walked through all these properties originally, I only walked through the vacant units because it's a lot easier to see vacant units because there's nothing to coordinate with. I don't have to coordinate with tenants or property management companies. I can just show up whenever I want and get the lockbox, open the door, and go check it out. So I checked out these properties maybe two months ago when it was still cold outside here in Milwaukee. And since then I hadn't visited them. But we were coming up on closing, which was supposed to be today, it is now delayed till next week. And I went to go see the properties because conditions can change. Uh, and this is a great example as why you need to go check out properties, specifically vacant ones, before closing on them, even if they were good when you saw them the first time. Uh from the time that I left to now, uh, we went from winter time to spring, everything thawed out, and it turns out that these properties were not winterized properly, and they now have insane bold damage, water damage, uh, and unknown issues that weren't uh were I didn't know about when I originally walked through them. So walking into this place for the first time since I saw them, it became immediately apparent that there's a problem, not only from the visuals, but also from you know the smells, and you can just feel the humidity in the air. Um, and if you look just in the very entryway, we've got this wood paneling here, which I originally had planned to replace with just complete drywall. But you can see there's already mold like literally growing on the wood paneling. So this place uh got uh frozen over the winter, the pipes expanded, and then when they thawed, they they broke, and the water just basically infiltrated this entire place. And so, with things like carpet, once water gets into it, it just soaks the entire carpet, and you can see the mold is just stretched all the way around this whole living room uh into the kitchen area. You can see, even it's so soaked in here that the the flooring, if you can pick it up, is actually like wet because there's so much water underneath it. And the reason is the water main right here is fed from underneath the property, and the water lines go some of them go into the ceiling and some of them go underneath to the kitchen area here. Um, all those have possible water damage and have now soaked the subfloor, which is just spread throughout the entire house. And so when we walked into this, we see this and we say, Oh man, like this is significantly worse than what we originally thought. When I originally walked through here, I said, Okay, we're gonna redo the cabinets and the kitchen area as a whole, we're gonna redo the flooring. Uh, but now it turns out you're gonna have to rip all of this up, you have to redo the subflooring, and you have to identify the plumbing leaks. And in a property like this, the plumbing isn't straightforward like some of the new builds. In this house, it's kind of twists and turns, it goes under, it goes up and over because they're such small houses. Uh, so trying to identify those leaks and mitigate those as well as replace the entire subfloor, remove all the mold damage. I mean, you have to you have to fix this. This is literally literally all mold on this. So you have to get rid of this, which means you need to get rid of the wood paneling. I mean, it's literally soaking wet when I touch it. Um, so you have to get rid of the wood paneling, you have to redo all the drywall, and now this becomes an entire gut job where I thought it was just gonna be flooring, paints, windows, maybe a little bit of kitchen work. I budgeted about five thousand dollars per house, and now it could be tens of thousands of dollars per house. And at the end of the day, you're still only gonna have a two-bed, one-bath, single-family house. Uh, here we are in one of the bedrooms. The same uh situation basically. This carpet is all soaked. There's mold, like maybe an inch worth of mold growing off of this. You can see on the bottom of the door here. This is a great example, more mold growth. Um, probably on the back side of the door, too, I'm sure. Oh, yeah. So this is all moisture throughout the entire house, and so you can see the problem. You can't just paint over this and call it good. You have to actually get rid of all of this. So the the work became way more extensive, and there's most of the mold is down here close to where the floor is soaked, uh, but it's all seeping into everything up here, so it's it's not like this is all safe. This is all gonna have to uh at least from here down, probably be removed, if not the complete drywall for the entire house, which basically means it's a teardown to the studs. So the the math on that just totally changes instead of five thousand dollars for 672 square feet of flooring and some kitchen cabinets and maybe a bathroom. Now you're looking at tearing out everything in here, and you still have to deal with things like you can see up here, this is starting to sag, which is indicative of possibly some sort of roof leak. So potentially you're doing all this and you still have a roof that leaks, which means you need to replace a roof too. So quickly the numbers start adding up, and now what was a really great deal, like I thought and had said, has become a really bad deal, and it only gets worse as you walk through the house. So that's it for the majority of the interior of this house specifically. As far as the exterior goes, I got quotes and bids out for all of the 15 houses I was supposed to buy. That included replacing the soffits, the fascia, the siding, and touching up a lot of the inconsistencies with these houses. Uh, the the range for those fixes was somewhere between$10,000 and$12,000 per house. And then I also got quoted to replace all the gutters because uh these kind of water problems can happen without even having a main water break. It can be because you have bad gutters and all the water is seeping right into your foundation and that can cause all kinds of other problems. In the case of these houses, there's no basement, so that's not a concern, but there is still basically a subfloor here that can get soaked up. So I want to replace all the gutters on all the houses as necessary, and they're charging me$15.40 per linear foot. So uh these houses are roughly 28 by 24, so you can quickly do the math and figure out roughly what that's gonna cost you. And I budgeted about a thousand to fifteen hundred dollars a house. So that's what I was planning on doing the exterior. That's all set in stone. That was gonna happen. As you can see though, the interiors of these houses drastically changed and totally ruined the algorithm as far as how this deal was supposed to work and the numbers that went into it. All right, so here we are inside of another example of this house. It's almost an exact carbon copy of the house previous to it. Uh, but this one is kind of interesting because the floor is ripped up and it gives you a great way to see just how bad that water damage is and what it does to the subfloor. So this is the flooring that they had installed, just kind of you know, uh vinyl plank, I guess, that they put in here. Um, underneath it, though, is this subfloor, and you can see here it's black, it's soaked with water. It's likely it's moldy, I can see it already. Um, it's terrible right there. There's a hole in the floor, there's all kinds of stuff happening. But if we walk back a little bit, you can see that it goes from being moldy and disgusting to eventually it's actually dry down there. So it gives you an indication this house probably didn't leak as bad. So it soaked this whole kitchen area because the water meter is right there, but it didn't quite make it all the way to the living room. So, just another example of what can happen with water damage, it's one of the worst things you're gonna have to deal with. And in the case of these uh houses, they're all have they all have that, and they're all dealing with that, so not ideal by any means. Uh, so what was the resolution of all this? We have mold-ridden properties that have water damage, and uh the scope of work is far greater than I anticipated. What do we do about it? Well, after we got done touring all these properties, I called the agent that I'm working with. And for those of you who know, I am my own, I am usually my own agent, but in this case, I'm working with the realtor who I've built a relationship with. And in this case, in this case, it really actually paid off quite well because I called him up and I said, Hey, from when I toured these properties two months ago, let's say, to today, the condition of these vacant ones at least has drastically changed. And he kind of sighed and said, Oh man, here we go. Because he's been trying to sell these properties for a long time. Like I said, this is two years in the making. So I called him, I talked to him about it, and he reached out to the the seller and told him, Hey, this is what's going on. And the seller immediately was not really receptive to this, we'll say. Uh, there's some text messages back and forth between him and the agent, and he basically said, like, he'll take this to court. He doesn't, he's not gonna uh sign a cancellation of the contract, so we're gonna move forward with it, which is not exactly how that works. There's a lot of protections built into the contract for material changes like this that happen to a property before you close on them. Uh, but the key is here, I came out here and discovered them before closing. Had I not walked through these, I would have closed on these potentially today, and I wouldn't have known about this until I walked in for the first time after closing. And by that point, it's all over with. There's no rear recourse really. You could try, but it's a lot more complicated once you own the properties than prior to closing. So I came to them, we went back and forth, and what we ultimately settled on was that I'm gonna take all six of these and remove them from the offer completely. So the offer now goes from 15 properties down to nine. And it this also caused me to have to offer a little bit more money because I took on a mix of vacant properties and occupied properties, and now the new offer has uh eight occupied properties and only one vacant property, which happened to not be water damaged. So, what that meant is I'm getting a little bit better deal because I don't have to re-renovate the interiors, they're already lived in by somebody. I'm really just focused on the exterior repairs. So I offered$72,750 on average for the nine properties uh that remain. And so that's the new offer. That's what we're moving forward with as of today. Uh, the six properties that are vacant are now excluded from the pro the offer completely. I could revisit these at a later time, but it would have to be at a much lower basis price than where I was at because of the obvious things that we just talked about. So moving forward, nine properties, eight of them occupied, one of them vacant. We're gonna do the exteriors on all of these, get rid of all this old wood siding, the gutters, the soffits, the fascia. And for the one vacant property, we're gonna redo the interior and we're gonna package those all up. We're using hard money to close it, so no money down on my end except for the funding fee to close that deal. And then once we get them all cleaned up and stabilized, hopefully in two to three months from now, we'll take them to a big bank, we'll package them all up and put them on a long-term loan and set them and hang on to them for hopefully a long time. And that's the plan. So, this is a great example as why you need to go to your properties before you close on them. I generally try to see every single unit that I buy. There have been a couple times where I haven't, uh, but when it comes to vacant properties, especially in a place like this where there's freezing and thawing and potential issues with that, if they're not winterized, uh, that's why you got to go through them. If you don't, you can leave yourself exposed to basically an unlimited amount of risk because there's an unlimited amount of things that might have to be done to these properties to bring them up to a livable standard. And uh that's basically what happens. So I appreciate all of you guys uh sticking with me through this video, taking a look at some of the stuff that I look at daily here in Milwaukee. And uh I appreciate all the comments as always. I'll talk to you soon.