I work with a lot of indianapolis real estate investors. I recently learned that, in Indiana, if a home has an electrical system that is ungrounded, then a buyer can not get a FHA backed loan for the property. Evidently it’s an Indiana Law. Not sure how followed this law is, but it could be used against an investor who buys a home with cash and then rehabs the home, expecting to sell retail…
I was a bit confused by this, so i checked with a couple of different people.. It seems to check out.. So if you are in Indiana, and your home has ungrounded outlets, and or an ungrounded electrical box(circuit breaker,etc), then your buyers can not get a FHA backed loan.. Now you can prolly sell it on a conventional loan, or via cash, but you are limiting your options on a home like this… Especially in this market.
I recently made an offer on an investment property, and I noticed that 90% of the outlets were only 2 prong. I was already figuring on a total rehab for the property, so I already figured an upgrade to the wiring, but I was unaware that this would be a REQUIREMENT. I was informed by my sources though, that a person can run a seperate ground wire for the outlets, so at least I have that going for me.. hehe
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