The Good, The Bad, The Inspection Report

We got back to Dallas just in time for basketball season to begin. As we settled into our regular seats at Dallas Mavericks games, we couldn’t stop thinking about the property in Gardiner.

Yes, there was work to be done. But there was also potential. If we were willing to put in the effort and some (a lot of?) money, this could be exactly what we’re looking for. At the same time, we knew a bad inspection could easily make it not worth pursuing.

The thing was… we’d spent years searching. We’d put in offers. Toured multiple properties. Looked at dozens of listings. Nothing had checked all the boxes, but standing there on this property in Gardiner, Montana, we wondered if we had finally found everything we’d been looking for.

What We Thought We Wanted and Why That Changed

After a year of looking, we began thinking we might not be able to find what we wanted already built (and in our price point), so we tossed around the idea of buying land. We’d manage some of the groundwork—excavation, connecting to utilities, whatever was needed—but figured the cabins themselves would be built off-site, by a prefab builder, and delivered to the property. Essentially, we would be delivered a turnkey unit.

But after 2.5 years, we still hadn’t been able to find:

Land zoned for multiple residences in a location we wanted to be in, and
Properties that allowed short-term rentals, and
Parcels that didn’t require complex permitting, and
Something in our price point

We only just started to adjust our expectations again a few days before stumbling upon the listing in Gardiner. So, the idea of taking on a fixer-upper that needed immediate attention, visible repairs, and a long list of to-dos was still pretty new. The property had real potential and fit what we were looking for better than anything we’d seen so far, but we hadn’t pictured it arriving in such a rough package. (To say the least.)

Back in Dallas… Still Thinking About Gardiner

We’re casually chatting about numbers during time-outs. On one hand, this place needed a ton of work. On the other? It was located:

Less than a mile from Yellowstone’s North Entrance
In the town of Gardiner, MT, with walkability to restaurants and shops
In a year-round destination with tourism in all seasons
On a property with four structures and no HOA or permitting limitations

Plus, it came with a surprise: The sellers were offering owner financing at 4.5% interest at a time when mortgage rates were 6.5-6.75%, even for buyers with excellent credit. That meant we could borrow money at approximately the same rate we were earning in our high-yield savings account, and that alone was a game changer.

Of course, we still had questions. What was the actual market value of this place? Were we missing something? Would the renovations cost more than we were budgeting?

We knew this wasn’t going to be like our past home purchases. This wasn’t a simple down payment followed by a move-in date. This was a down payment plus a renovation budget, plus utilities and upgrades, plus a whole lot of patience before it would become a profitable rental property. We had to be sure we weren’t just financially prepared to buy it but also prepared for the immediate projects that would follow.

We reached out to a local realtor for help, and after touring the place himself, he gave us the advice we needed to hear: “You’re going to want to go in with a conservative offer.”

He had seen what we had seen: a lot of potential, but also a lot of upfront work. When he gave us his recommended offer range, it was lower than expected. (Much lower.)

Talk Numbers to Me

The asking price had already felt more approachable than anything else we had seen. The property was listed at $495K, and we’d been mentally and financially prepared to spend $650K to $700K on a multi-unit property. If we couldn’t find one already built, we were looking at land in the $350K to $400K range, plus the cost of building tiny homes or drop-in structures. That’s a lot of upfront cash, so, in my mind at least, $495K felt like a steal.

Then our realtor came in and said, “I’d offer around $370K.”

That was much lower than expected, but Gardiner is a tricky real estate market. It’s a small town. It’s remote. It’s hard to get an accurate feel for pricing.

In Gardiner, you’ll find homes passed down through generations sitting right next to brand-new builds. There are RV parks, single-family homes, townhomes, and condos all mixed together. And because it’s unincorporated, there aren’t many regulations or zoning restrictions. Everything exists side by side, and it can make the market feel unpredictable.

What felt like a steal to us could easily seem overpriced to someone local. That’s why having a local realtor to help weigh in on comps and realistic values was so helpful. It’s not that our realtor thought the property was only worth $370K; he just thought that was a good place to start negotiations, figuring the sellers were hoping to land somewhere around $430-450K.

At the time, high-interest savings accounts were offering around 4.5% to 5% returns. Coincidentally, that’s what we were being offered through owner financing.

Plus, owner financing came with its own benefits. We could avoid the traditional mortgage process (and all the bank-related fees that come with it). We still wanted to go through the appropriate legal and title channels, of course, but even then, we found a local lawyer who could draft the documents for a fraction of what a traditional lender would charge.

Basically, the question became: What’s the most we’d be willing to offer? What’s our ceiling, beyond which the deal doesn’t make sense? How can we work backward from there to get to a starting point for negotiations?

We were feeling the pressure not to make an offer but to make the right offer. We didn’t want to lose the property, but also didn’t want to get in over our heads. So we did the math and looked at our cash flow, our renovation budget, and our risk tolerance.

Then, we submitted an offer we felt comfortable with… and waited.

Were we nervous? Absolutely. On the one hand, we really wanted it. We didn’t want to lose the property. But on the other hand, what if they accepted immediately and we just committed to an HGTV horror story in the making? (To me, I tend to think it’s a good sign when you’re equally as nervous about getting what you want as you are about not getting it. It often means you’re walking the line between excitement and the realization this is going to stretch you—that sweet spot where big decisions usually live.)

Within 24 hours, the sellers responded with a counteroffer, and, after a counter of our own, we landed on a number both parties agreed to, furniture included. (The furniture? That’s a story in itself. We asked to include it, thinking it would help us get started faster… and they seemed thrilled to leave it all behind. More on that surprise next time!)

Our offer was accepted, so now, it was time for due diligence.

We had about 10 days to schedule an inspection, confirm that short-term rentals were allowed, double check permits, and figure out if this was truly feasible. Even though the sale was technically “as is,” we knew we needed a full inspection. If anything major came back, especially anything unsafe, we wanted the ability to walk or renegotiate.

The Good, The Bad, & The Inspection Report

Let’s just say the inspection report didn’t exactly surprise us, but it didn’t go easy on us either.

We expected some quirks. Some fixes. Maybe a handful of items to budget for and knock out before hosting guests. What we got instead was a full-on renovation starter pack. A house-shaped checklist of issues ranging from "eh, cosmetic" to "you should probably call an electrician yesterday."

Let’s break it down.

Here are just a few of the highlights (or lowlights, depending on your optimism):

Foundation cracks — major
Structure built without proper footings (love that for us)
Undersized floor joists and questionable framing
Missing soffits, gutters, and downspouts (not a huge deal if it’s not raining)
No GFCI outlets or grounded wiring anywhere — perfectly safe (probably)
Exposed wires, broken switches, upside-down light switches
An unfinished bathroom, with mystery plumbing decisions (fun surprises to come)
Old cast iron drain lines still in use — vintage vibes!
Missing venting or venting into nowhere
Cabinet doors that wouldn’t close and floors that felt a bit… lumpy
Doors rubbing, windows stuck shut, cracked sinks, sagging ceilings — character in every corner

This wasn’t just a fixer-upper. This was a “hope you know a contractor, an electrician, and a plumber” kind of situation.

But we had gone into this with eyes wide open. Somehow, we weren’t scared off just yet. We made our list. We checked it twice. We laughed nervously. Then, we triaged the issues.

We were going to need cash for:

Electrical (about $10K, immediately)
Foundation repairs (upfront)
Finishing the addition (it was functional, so we had time)
Exterior siding (not required upfront)
Flooring and fixtures (we could do some of this on our own, time to become DIYers!)
Whatever we decide to do with the unfinished “apartment” (did I mention our inspector, a friend who’s a civil engineer working in sewer, and our realtor all warned us the “stubbed in” ready-to-tie plumbing was not up-to-code?)
Possibly adding water & sewer to the dry cabin (which requires excavation, laying new piles, and building a bathroom addition with foundation, etc.)

The full report estimated $20K to $25K in work if we did everything, both cosmetic and structural, on the main house alone. About $10K to $12K of it was needed immediately just to make the house functional and safe.

Even though the sale was “as is,” safety hazards like the electrical on this property arguably should have been disclosed, so we worked with our realtor and asked for a price reduction to help offset the cost of the electrical work.

The sellers came down another $5,000. We probably could’ve pushed for more, but at that point, we felt the deal was fair. Especially considering the comps—another two-unit property in town had sold the previous year for $550K. And even if we put $100K into the two units, we’d still be sitting below that price point. Add in the lower interest rate from owner financing and fewer closing costs, and it all made sense for us.

So… that was that. We officially moved forward. Due diligence complete.

We did the inspection.
We did our research.
We found at least one viable option for every contractor or service provider we’d need.
We checked on short-term rental eligibility.
We evaluated the financials.

And then, we signed the papers.

We bought a property in Gardiner, Montana!

Keep reading… (#4) Cabin Chronicles: The Great Cabin Purge