My First Investment Property in Austin Texas

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My First Investment Property in Austin Texas

Mohammad Khan
Investor · Los Angeles · Member since 2021 · 20 posts · 6 votes

Hi everyone,

I put in an offer on a duplex in  Round Rock Austin and after tough negotiation, the seller and I agreed on a purchase price. I had the home inspection done yesterday during the option period. I was reading the inspection report today and I found that the inspector identified some foundation issues. My agent is telling me these are minor issues and very common in Austin. I was wondering if you agree with my agent's comments? Attached are the pictures. I still have 3 days to use my option to get out of the contract. I was wondering how do you build a comfort level to purchase the property? 

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Stephen Stokes
Rental Property Investor · Austin, TX · Member since 2016 · 317 posts · 257 votes
5y

@Mohammad Khan what you should be more worried about is not the symptom of foundation issues but the root case. Water getting under the foundation is the primary root cause in most foundation issues. If you see sloping that would create water pooling near the structure or flowing toward as opposed to away from the structure you will need to fix that to avoid future symptoms.

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  • Damon Walker
    Real Estate Agent · Austin, TX · Member since 2020 · 26 posts · 10 votes
    5y

    Yes, foundation issues can be common in the Austin market.  Some investors run away from it and some investors embrace it if they have the return on the back end.  I would definitely keep the property because multifamily is hard to come by.

    1Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    5y

    @Mohammad Khan is that all? I wouldn't even call those foundation issues. Most homes have some settling.

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  • Kimberlee Fleury
    Realtor · Georgetown, TX · Member since 2018 · 6 posts · 5 votes
    5y

    Congratulations on your purchase. I agree with Mr. Damon Walker, some foundation issues can be common in this area. 

    Over the past weeks I've showed clients several duplex's in the area you have purchased in, I wonder if I have toured it?   

    I also recently purchased a duplex myself a bit north from your purchase.  I think the area has such growth and so much need for housing that this will be a good investment.

    Best wishes, 

    Real Estate Agent in Texas (lic# 761505)

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  • Mohammad Khan
    OP
    Investor · Los Angeles · Member since 2021 · 20 posts · 6 votes
    5y

    Hi Jordan,   @Jordan Moorhead here are some additional pictures taken by the inspector

    @Jordan Moorheadundefined

    Inspector's comment: 

    "There were corner pops noted on some of the foundation corners. 

    Honeycombing was present at the foundation wall. these areas should be monitored "

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  • Frank Wong
    Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
    5y

    Foundation issues in TX is pretty common and similar to the ones in the pics.  Hard to tell if it's a major issue or not. If you want to get a more in depth report hire a structural engineer to inspect the home. 

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  • Stephen Stokes
    Rental Property Investor · Austin, TX · Member since 2016 · 317 posts · 257 votes
    5y

    @Mohammad Khan what you should be more worried about is not the symptom of foundation issues but the root case. Water getting under the foundation is the primary root cause in most foundation issues. If you see sloping that would create water pooling near the structure or flowing toward as opposed to away from the structure you will need to fix that to avoid future symptoms.

    2Reply
  • Ryan KellyBusiness Member
    Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
    5y

    @Mohammad Khan there is a big difference between foundation settling issues (foundation is sinking or raising in height) and cosmetic damage to the parge coat, which is what your pics are showing. The parge coat is like icing on a cake, a thin cosmetic layer of concrete used to cover the exterior of the foundation mostly to protect exposure to the rebar. Super easy to repair. If the foundation was found not to be within level range, that’s completely different and could require expensive repair. How did the measurements of your foundation come out?

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  • Mohammad Khan
    OP
    Investor · Los Angeles · Member since 2021 · 20 posts · 6 votes
    5y

    @Ryan Kelly Hi Ryan,

    Per the inspector, the measurements came out good. The inspector said they are within the .50 range. 

    Thanks

    Mohammad

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  • Mohammad Khan
    OP
    Investor · Los Angeles · Member since 2021 · 20 posts · 6 votes
    5y

    Thanks for the information Frank. The measurements came out pretty good, so I am thinking I don't need to further prop into this. but great info! I could use this in my future purchases

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  • Mohammad Khan
    OP
    Investor · Los Angeles · Member since 2021 · 20 posts · 6 votes
    5y

    @Frank Wong Thanks for the information, Frank. The measurements came out pretty good, so I am thinking I don't need to further prop into this. but great info! I could use this in my future purchases

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  • Jacob Pereira
    Real Estate Agent · Austin, TX · Member since 2014 · 636 posts · 486 votes
    5y

    As my colleagues have said, probably not a big deal. If the cracks were a little worse I'd say you could at least use them to negotiate down a bit more during option, but based on your pictures it doesn't even look bad enough to do that. That said, unless the house is pristine, you'll usually want to bring up some areas of concern to at least shave a few thousand more off of the original price.

    1Reply
  • Ganessan P.
    Investor · Member since 2019 · 82 posts · 29 votes
    5y

    @Mohammad Khan - In addition to other members highlighted, i would spend couple of $100 and show it to a foundation specialist, also get a quote to repair it. Use the quote and negotiate with the seller. 

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  • Neil Narayan
    Real Estate Broker · Austin, TX · Member since 2015 · 715 posts · 527 votes
    5y

    @mohammadkhan If you are concerned about it you can get a foundation inspection done by a structural engineer for peace of mind.

    1Reply
  • Ryan KellyBusiness Member
    Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
    5y

    @Mohammad Khan if you decide you want a second opinion, I recommend reaching out to Thomas Appelbaum with Foundation Guru. They are an independent foundation inspection company and they don't offer foundation repairs, so they aren't trying to upsell you. Very professional.

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  • Mohammad Khan
    OP
    Investor · Los Angeles · Member since 2021 · 20 posts · 6 votes
    5y

    Hi @Ryan Kelly

    I had a foundation company looked at the foundation today. They told me there is not a significant concern and they didn’t suggest any repairs at the moment. I think I am going to move on with the deal. Thank you so much for your help!! 

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  • Cameron Braig
    Atlanta, GA · Member since 2021 · 493 posts · 162 votes
    4y

    @Mohammad Khan

    Congratulations on the closing. Hope things have progressed well. Thanks for posting and sharing the story. Best of luck. 

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  • Mohammad Khan
    OP
    Investor · Los Angeles · Member since 2021 · 20 posts · 6 votes
    4y

    @Cameron Braig

    Thank you

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