Is this property too much for a newbie?

11 Replies

There is a two story single family home on a good street that I know of. I have talked to the neighbors and they say it has been empty for 10 years and has only had two tenants before that. It was built in the 90's (last remodel) and has foundation issues (reason for sitting empty so long). Is this too much for a person (me) with no experience and no mentor or partner (because I feel like it is)?

It sounds like an opportunity for you to network and find a mentor and someone with experience to evaluate it with and possibly move forward.  

On your own - sure that may be a bit much.  But if you wait for the perfect property to go it alone on, then you'll just be waiting for years in my opinion.  Get out there, network, vet potential mentors and move forward cautiously.  Post the details of partner offers, seek feedback from others and surround yourself with a CPA and other professionals to advise you where you can.

I hope that helps. 

Foundation issues are generally a big red flag.  Unless they are selling for the cost of land this is likely not a good first deal.  The good news is it may be available when you have more experience.

Foundations issues may not be something you would want to tackle on your first rehab experience.  Foundation issues can be a diamond in the rough if you have the right people in place.  Fixing a foundation can be expensive and will require some paperwork proof that it has been corrected properly.  Ask yourself the "numbers" question.  Is there enough equity in the property to tackle this problem?  If you can build a relationship with someone who works on foundations and will work with you on the price with hopes  for future business from you, then you may want to take it on.  I personally tell my new investors to focus on only "cosmetic" rehabs for their first one or two deals.  You will learn so much and will  be better prepared for the more complex rehab jobs in your future.  

@Taylor Haywood, It's not  really if you ask me, It just depends on who will be doing your work and if the numbers make sense. I mostly do Collin County and I have done some in Dallas, but never Desoto because I don't know the area. I might be willing to partner with you if you like, just let me know the details. 

Originally posted by @Michael Roy :

It sounds like an opportunity for you to network and find a mentor and someone with experience to evaluate it with and possibly move forward.  

On your own - sure that may be a bit much.  But if you wait for the perfect property to go it alone on, then you'll just be waiting for years in my opinion.  Get out there, network, vet potential mentors and move forward cautiously.  Post the details of partner offers, seek feedback from others and surround yourself with a CPA and other professionals to advise you where you can.

I hope that helps. 

 Thank you, it does help a lot. 

Thank you all for the advice. What information would I need to determine if it is a good deal or not? 

If you avoid every house in Dallas that has foundation issues, you won't be doing a lot of deals.  Foundation issues in North & Central Texas are just part of the territory...literally.  80% of the houses around here, unless they were custom builds with serious foundations, are going to wind up with foundation issues eventually.  What does "foundation issues" really mean anyway?  The house was built in the 90's, so it isn't likely to be pier & beam.  But, there are many degrees of foundation issues.  I just recently had a deal that wouldn't qualify for underwriting, because of the severity of the foundation problems.  But, it was only $12k to remediate the issues.  You're going to get an inspection.  The inspector is going to say you need to get the foundation checked out.  You're going to get a structural engineer.  He's going to tell you how bad the problem is.  You're going to use his report to walk through the property with a foundation repair company for a quote.  It is no different than any other rehab project.  Do the investigation...get a quote...factor it into your offer.

Do not sit around and wait for the "perfect" opportunity to come along.  Perfect is the enemy of good!

@Hattie Dizmond foundation issues in the DFWarea is something I have notice growing up here and I know the soil shifts just never applied it to real estate. Thank you for explaining exactly why this "might" not be that big of a problem and teaching me to apply EVERYTHING I know about my area to real estate.

Absolutely right, @Hattie Dizmond

@Taylor Haywood - can you get into the property?  If so, get a foundation company to do a free inspection.  This will give you an idea of that part of the rehab.  If you have a GC lined up or other contractors, ask them to take a look as well and let you know their thoughts.  I find that when talking to neighbors, what I would consider a 20k rehab is 50k in their minds, so take that with a grain of salt.  Of course 10 years vacant means a slew of other probable issues...

Gotta run,

Andy

Andy Webb, Real Estate Agent in Texas (#692589)
214-263-0021

@Taylor Haywood

Taylor here is the name of a foundation guy that I have used for a free estimate on my property in Desoto 817-288-1250 his name is Bradley Holt of structured foundations. If this is your first property I am wondering if this is a home that you would be willing to live in first as you are renovating? Purchasing the property as your primary residence you would have a lower interest rate and can take your time learning to renovate as you live. Once it's done you can sell or refinance to make money for your next place. This could be a great starter home for you.

@Rhondalette W.

It is a house I could live in. Thank you for the connections and the information about the lower interest rates.

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