House with a Sink Hole, What should I do??? - Posted by Lazaro

Posted by Jim FL on July 28, 2001 at 22:02:28:

Lazaro,
Call me later this weekend, I am dealing with a seller who has the same scenario now.
We can surely figure out something together.
Two brains are better than one.
Take care,
Jim FL

House with a Sink Hole, What should I do??? - Posted by Lazaro

Posted by Lazaro on July 28, 2001 at 18:18:58:

I had a call today on one of my signs. The lady told me that her aunt which owns the house lives out of state and is trying to sell the home. She told me that the house has a sink hole and that her aunt had claimed it to her insurance. The lady got a refund but got to keep the home. I went and saw the sink hole. The sink hole is near the home but not under it (yet!). I saw some cracks on the walls which to be are due to the sink hole. This has to be fixed professionally which can cost an arm and a leg. So I thought I should maybe ask her to L/O it to me. I could make it a 2 year L/O with the right to renew twice which would be 6 years. Then I could go out and rent out the home. Should I do this? If I L/O the person will most likely not get a loan due to the sink hole. But I can probably get a min. of $225 cash flow a month. Should I do this? What should I write in the contract explaining that I will not fix it for at least one year and that I will not be able to obtain insurance and will not be responsible? Should I disclose the problem in the rental contract to the tenant? Should I force the tenant to get renters insurance? could they even be able to get this? She is asking $20k the FMV is probably $55k right now. I think it will cost $10k to fix the sink hole. So should I rent this for cashflow and then fix it at the end of six years which I would have made $16,200 on the home? I will talk her down on the price as well. I will probably get it for $10-15k. Is there any other way to approach this??? What is your take? Thanks for all your help.
Cordially,
Lazaro

Put a sink it. Whaddya think? nt - Posted by Ernestine Hooplemeyer

Posted by Ernestine Hooplemeyer on July 29, 2001 at 21:28:35:

nt

Re: House with a Sink Hole, What should I do??? - Posted by Kim (FL)

Posted by Kim (FL) on July 29, 2001 at 08:09:16:

I’m in Florida and I see sink holes a lot. I may be wrong but I think that it’s known that current sink holes predicate future sink holes. As I’m sure you know, they fill them with a cement type mixture but often they have to continually refill them due to shifting. Most of the houses that get sink holes are just cleared and they become nice grass lots for the neighbors. The risk of the sink hole becoming a problem in the future is just too great, I think. So, I’d say you may find that the true FMV for that particular home is zero. But, I hope you can make it work! Good Luck!

Re: House with a Sink Hole, What should I do??? - Posted by wayne

Posted by wayne on July 28, 2001 at 23:28:05:

I ran across a deal that had somewhat of the same problem. What you need to do is find out if there was a geo-tech report…a geological technical survey done on the home, and if there was not a report done…get one, get the owner to pay for it, let the owner know that without that information, they will not be able to sell the home to anyone. This report will determine the risk that the sinkhole has to the home, also the exact situation of the sinkhole. You must determine everything about this sink hole, hopefully it can just be filled and be done with it.

wayne