BiggerPockets

Hey all,
This is my 1st post, but I have been following the site for almost year. The information is great, but I've got a question about a potential flip that I can't find any info on.

I am in the Dallas area and there is a historic home in a great area but it has some major foundation issues. Normally I try to stay away from foundation problem but I was think since this is a pier and beam it might be affordable (which it is). The question is if it's worth it.

The realtor had and engineer look at that house and he has stated that it is not possible to get the house completely level and if you try it could damage the structure.

I was wondering this would have on the impact of the value and the ability to resell a property?

The property is a 1945 pier and beam home that has a lot of good qualities and has already been half rehabbed, but it needs 39 new piers and 5 beams of 90', 43', 2x26' and 20'. The floors are visibly uneven in just about every room.

I have estimates for the work ranging from 12-17k and I think I can buy the property for cheap, but am unsure about how the foundation will affect this property. If the property can be purchase cheap enough is it worth the risk?
Will it be really difficult to resell even if the repairs are done?

At what point do you give up and it becomes a tear down? The property has a lot new items throughout and I find it hard to believe it's not worth saving.

Thanks

Without the foundation cost and issues I would be looking at purchasing for $80k ($70k depending how much he will negotiate) and investing $35k. Like resale $170-185k. The neighborhood has sales as high as $200k and $225k.

The offer would the sales price minus cost of foundation work.

Get another engineer and a GC who knows what he is looking at. Preferably, get a GC who has a good relationship with an engineer.

The engineer may mean "sheetrock/wall repair" by "damage the structure" or he may mean "Woe unto your framing"

Most of the time when we talk about jacking a house up... yeah, there are going to be some secondary repairs needed. Case in point, we jacked up a brick house almost 4" on a corner crack, and had to repair the brick face and interior sheetrock. That's just kinda how it goes.

The question is not - "Will jacking the house up damage the rest of the house"... the question is, "Will the damage be so catastrophic that repairs will be impossible or too expensive to consider"

The fact that your engineer says you need 39 new beams is pretty concerning. That's not a bit of light repair work, that's a pretty considerable amount of foundation even for a new house. You need to think hard about what it's going to take to put those beams in, and what sort of damage you're going to have to repair after you've fixed the foundation.

By the time you do all that, you may be talking about considerable flooring, wall, and ceiling repairs. The framing might start splintering and warping... in short, you may end up surgically rebuilding the house.

In general, new construction beats surgical rebuilds for time and cost.

If you don't know exactly what you're looking at and exactly what is involved, you need to STOP and back that gravy train up... get someone involved who knows how to surgically rebuild, and build new, and get an honest opinion (be prepared to pay for it) about what you need to be doing here.

I would want to know why it couldn't be level again. Is it because the structural members are warped and it can't "get" level, or is it because the house is sitting on expansive soils and it won't "stay" level? Is it because the leveling process would destroy the structure, or some other reason?

Foundation destress is common in the DFW area and I have seen high dollar, historic homes in Hyde Park / University Park area with affluent folks living in them that accept some degree of "off-square" house in trade for the prestige of the area. So it might be worth it even if you can't get the house completely level.

I also agree with all said above.

Brian,
The reason the house can't be level completely again, is according the engineer, moving the house back to level would put too much stress on the structure. The engineer also stated that there it's to estimate how level it will be before the work is completed.

Right now the property is heaving on one corner and then diagonally the opposite corner is sinking. Those 2 trouble areas seem to be affecting all the other rooms.

Carlos,
This is my 1st potential flip and I haven't put a bid on the property yet. I guess that is what I am trying to determine, is if this property is worth bidding on.

The walls are dry wall. I haven't been able to figure out the plumbing and electric. Regarding the plumbing all visible plumbing is copper, but really the only thing visible are where the pipes come out of the wall to connect to the faucet. All the faucets are coppe, including all outside connections. The electricity I have no idea about (I've been wanting to find out, but was thinking electric is likely a job for a pro). What is the best way to see if the plumbing and electric is up to today's standards?

Also you're absolutely right about getting too many bids through the realtor, but the agent won't let me have my own contractor in for estimates until I put an offer on the property. Once a contract is in place I have 10 days to get contract estimates and adjust my offer. I am not a big fan of the way the realtor is making do this, is this normal not to be able to get contractors for estimates until a contract is accepted?

IMHO this is a bit too much to swallow on a first time rehab...

Remember this is only going to be the first of the problems you encounter...

Let me ask since this is your first flip, how did you come up with the After Repair Value?

Is that $35k that you are going to invest include fixing this problem, the rest of the rehab and all the costs associated with a flip?

I ask because I am sure there are easier flips in your area...

Luke - just stop on this deal. it doesnt sound good.