Foundation problems - Posted by keith hutson

import · October 13, 2003, 8:22am

Posted by art c on October 13, 2003 at 17:23:01:

HZ is right again.
Listen to her , she hits the nail right on the head.
Foundation problems scare a lay person.
Good opportunity for savy investor, it’s a lot easier than it looks.

import · October 13, 2003, 8:22am

Posted by keith hutson on October 13, 2003 at 08:22:00:

I have a Real Estate associate who contacted me about a house he has listed with a sinking foundation. Three corners of the house are down about 5". An engineering firm has said it would cost about 20-30K to solve and would place a 15 year warranty on it.

The house is in a $150-60K area. So far he says it is listed at $110K and said of course it can be bought for under $100K. He is realistic about it. My question is this: if I can buy it at the proper numbers, MAO is it a good candidate if the engineering firm can guarantee for 15 years or should I pass on it?

Thanks
Keith Hutson

import · October 14, 2003, 11:18am

Re: Foundation problems - Posted by jasonrei

Posted by jasonrei on October 14, 2003 at 11:18:40:

I wouldn’t just pass on a property because of foundation problems. Of course, having 3 corners down 5" sounds pretty bad. I started doing rehabs last year and have only had about 4 slab jobs (and I paid about $135/pier). The cracks weren’t too bad, though. If a slab is really bad (and yours might be) you may also have busted sewer and supply lines, and repairing those can be expensive.

If I was uncertain about the extent of damage I would budget for the worst, but wouldn’t pass.

import · October 13, 2003, 5:07pm

Re: Foundation problems - Posted by Dimpil

Posted by Dimpil on October 13, 2003 at 17:07:26:

Are you paying cash? Most lender won’t loan with that kind of problem. Hard money maybe.

With that said, I’d offer 60k for it and not a penny more and pay the closing cost.

Why? Your top loan with hard money 105,000 (150*70, which should include, aquistion, repair cost and closing fees then you have to wait to fix it before you can sell it or rent/lease it.

So yeah the agent is looking at it as if it’s a deal at 110 but from your investor eyes it’s got issues and you have to go in fix them and might have to hold a few months all the while losing potential income and you may take a bath on it, so you see 60 would be the best possible offer you can give.

import · October 13, 2003, 8:46am

Re: Foundation problems - Posted by michaela-ATL

Posted by michaela-ATL on October 13, 2003 at 08:46:01:

Keith,

I would put it under contract at a good price, contingent to your inspection etc. Then I would get a few more estimates. An engineering firm is probably pretty high in their repair estimate. I wouldn’t want to get the estimates before I had a contract, because if they’re low, the seller won’t negotiate that much.

Michaela

import · October 13, 2003, 9:36am

Re: Foundation problems - Posted by Heather -Tx

Posted by Heather -Tx on October 13, 2003 at 09:36:40:

Michaela is correct, and engineering firm will be WAY WAY OVer-priced. I have a home under contract now, that needs foundation work. The owner before calling me called an engineer firm, that told her it would costs about 30K to repair… then she called a regular foundation company which told her 8K. I can get it done 5K or less due to working with companies that do investor pricing.
Properties with foundation issues are a great thing for me. Owners think it will cost a fortune to fix, when in acuality, it usually doesn’t. I had my last one done with 10 peirs and it was well under 2K and that was even going through a GC. If I would have went straight to the foundation company it would have been about 1250.

Hope this helps, Don’t let foundation problems scare you off. Get it under contract, then get a repeiar estimate. Ask other investors near you who THEY use. You can get a lifetime warrenty instead of the 15 year one, and for a much better price.

Heather Zaal

import · October 13, 2003, 6:59pm

Re: Foundation problems - Posted by keith hutson

Posted by keith hutson on October 13, 2003 at 18:59:46:

Heather, I remember reading your post recently about the piers etc. This is why it really did’nt scare me off. I will call a foundation company rather than an engineering firm. I’ll see what I can do and maybe the deal will work.

Thanks Keith

import · October 13, 2003, 1:21pm

Hook me up - Posted by JP

Posted by JP on October 13, 2003 at 13:21:36:

Man, and I thought I was getting good pricing here in the Dallas area - $175 a pier with a lifetime fully transferable warranty. Where are you getting quality foundation work done with a lifetime warranty for only $125 a pier? Hook me up! =)

import · October 13, 2003, 2:57pm

Re: Hook me up - Posted by Heather -Tx

Posted by Heather -Tx on October 13, 2003 at 14:57:33:

Shoot me an email and I will get you their number. I actually know one company that does them for 125 pier with lifetime transferable warrenty, and another that does then for about 140 with same warrenty. I Think they just work in Houston area though…

Heather