SO YOU HAVE OWNED PROPERTIES AND BOUGHT PROPERTIES FOR DECADES. You know everything right?
If you are buying a Property with the condition 'AS IS' in the contract you better think 10x's about it. And if your attorney lets you sign the contract will he pay your future fines, penalties, and loss of income?
A simple example for illustration purposes. Let's say you buy a 16 family unit building. Lets say it was built in the 1970's. So you go inspect it, check out the income, expenses, and you offer a price and the owner excepts it but accepts it 'AS IS' condition.
If you sign that contract doing a 1031 exchange and close on it, you are walking a tightrope each day thereafter. Reason being,
when the property was built it stated on the plans, two Doctor offices in the basement. Okay. But now there is four apartments in the basement. Now what?
Is it possible that you the buyer are not aware of this?
Is it possible your attorney who represents you doesn't bring this up?
Is it possible from the Title report that you read it and discard what it says?
All you need is one tenant who gets pissed off at you and he calls the buildings department. Next an inspector arrives to view the building and discovers the apartments are illegal from the original plans and approvals.
Results- All tenants paying the rent has to be put in an escrow account until illegal apartments are removed, building reinspected, and the time frame is at least a year minimum.
Don't believe this ask your attorney.
'AS IS' can be the most costly problem you ever faced in your life.
BEWARE!
JIM TURANO/BROKER-DIVERSE REAL ESTATE WITH 40 YEARS OF EXPERIENCE
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