Foundation Repair Question

28 Replies

Hey BP,

So I just got my first house under contract (woohoo!) and everything looks good. Rehab is pretty straight forward, except for one thing: there's definitely foundation issues. There's a pretty solid vertical crack in the back of house in the garage (see picture attached) and the rest of that wall seems to be crumbling a bit. I did my best to factor that into my purchase price, however the inspector ordered by the hard money lender mentioned that they really like to have a report detailing that I have that foundation issue squared away. Essentially they want to protect themselves in the event that I cannot refinance (or sell) in 12 months to pay them back because the issue isn't adequetly fixed. I guess they want someone to be liable if the work isn't done appropriately that they can go after. I had a mason and a contractor come out and look at it, and they seem to think they can fix the issue, but I don't think they'll shoulder the liability.

So, with all that said, what would you all recommend is the best, most cost effective (both short and long term) way to handle this? Getting a structural engineer out to put together a report / cost estimate? Are there any other types of people that will shoulder the liability for this type of work?

Thanks for your help!

PS. Any recommendations for a structural engineer in the Philly area are appreciated!

I stay away from any house with structural issues.  At the end of the day the only way to really protect yourself is with a structural engineer report which could be costly.  Also any findings will have to be disclosed to any potential buyers which could stigmatize the property.  Hopefully you got it for a really good deal to be able to absorb any additional cost associated with this issue and the possible additional holding cost you may incur trying to sell it.

Good luck

@Jamal Pitts  I think a lot of people avoid places with structural issues for that reason. It's for a buy and hold, so yes, I should be concerned about all exit strategies, but really the biggest issue is the potential of a bank not taking on a loan for the property. But at this point, I'm not locked in, as if I can't get financing (because structural issues will be too costly to repair) then the deal is nullified.

Any other thoughts?

@John Matthews  

Hire a structural engineer. It will cost you a few hundred dollars but it will be money well spent.

@John Matthews   I definitely recommend getting a SE out there to check it out and write you something stating what the likely cause is, any potential structural implications and ramifications, possible repair options, etc.  My parents did that when buying a fourplex in AZ, the cmu wall at the back of the garage had some cracks so they wanted something with an engineer's stamp saying what was going on and whether or not it was safe.

Is that a concrete or cmu (masonry) wall? Is it a retaining wall (is there soil behind the wall)? Is there one or more floors of the building above that wall?

Once the bank sends out the Appraiser and if he mentions it in the report, you will be require to get a structure engineer to state that the property is structurally sound. You might be able to get away with a contractor drawing up the letter, depends on the underwriter. 

@Kimberly T.  It's a concrete retaining wall - there is soil about half way up the other side and there's two stories above it.

Thanks for all the responses - I'm scheduled to have an engineer come out to look at the place on Saturday, so we'll see what they say.

Originally posted by @John Matthews :

@Kimberly T. It's a concrete retaining wall - there is soil about half way up the other side and there's two stories above it.

Thanks for all the responses - I'm scheduled to have an engineer come out to look at the place on Saturday, so we'll see what they say.

 One thing to remember about concrete - it always fails in tension. Always. So those two sections of wall have moved away from each other, in the direction perpendicular to the crack. Any number of things could be causing it - tree roots uplifting part of the foundation, frost heave affecting foundations of different depths, differential settlement, etc. I am a SE in California, but we do not have extensive experience with some of those issues, especially since we do not have a lot of basement type walls in our area, but your engineer should be able to assess the situation and get you some answers. Good luck, and let us know what the engineer says.

@Kimberly T.  Interesting. That makes perfect sense, but I hadn't thought about it that way.

I will post back the results, hopefully Monday.

Ouch! @John Matthews  You're certainly biting off a lot for a first deal! I'm a little nervous for you on that one. Let me know what the outcome is!

So I met with the engineer today, he wasn't as concerned with that crack (as the house is probably 100+ years old) as he was with the back corner of the house sinking a bit. He basically said without taking a backhoe to the under the footing of the house in that area, it could be a "simple" 5k solution, or as expensive as 20+...so unless the seller can come down 15 or so (unlikely) I'm onto the next one.

@Nancy Larcom  agreed! I spent a few bucks on appraisal / inspection / engineer for this one, but I learned a lot. Honestly, I'd like to become proficient with foundation issues / mold remediation since most people seem to be afraid of these problems, long term I think it'll give me a leg up - but probably not for my first deal, as you said!

Thanks for the advice everyone.

Originally posted by @John Matthews :

So I met with the engineer today, he wasn't as concerned with that crack (as the house is probably 100+ years old) as he was with the back corner of the house sinking a bit. He basically said without taking a backhoe to the under the footing of the house in that area, it could be a "simple" 5k solution, or as expensive as 20+...so unless the seller can come down 15 or so (unlikely) I'm onto the next one.

@Nancy Larcom  agreed! I spent a few bucks on appraisal / inspection / engineer for this one, but I learned a lot. Honestly, I'd like to become proficient with foundation issues / mold remediation since most people seem to be afraid of these problems, long term I think it'll give me a leg up - but probably not for my first deal, as you said!

Thanks for the advice everyone.

Welcome to the R. E. world, John.  

I've been a Licensed SE for 25 years. I've seen a lot worse.  I do agree with your earlier SE's opinion.  Its pretty obvious the back corner settled somewhat. The question is what caused it. Did it happen in 1920 or last year? Its possible there's a drainage problem in that corner. Check for standing water maybe from poor lot drainage or gutters clogged.  Go out in a rainstorm and look. Don't worry you won't melt. Its your hide thats on the line here. 

100 years ago a lot of houses were literally supported on rock piles. This corner may have been built on fill. There are a million variables.  Like I said, I've seen a lot worse. So you can get some sleep.

The easiest estimate for fixing would be call the RamJack folks, or similar companies.  I'm NOT advocating any one company so its best to get 3 estimates.   They auger down to firm soil and undermine the footing corner maybe 20' each way and literally jack it back up. They should guarantee their work too.  That should make put your lenders' inspector at ease.  Use this opportunity to polish up your negotiating skills and knock 'em down $10k.

Like the saying goes...When life gives you lemons...Get out the Tequila! 

(I made that last part up)

Good Luck.  :-)

P.S. Hmmm. February in Philly...maybe waiting until the snow melts would be a good idea.

@Mark Esposito  That's almost exactly what the SE said. There's one downspout that goes underground in that corner. We've no clue where it goes. So it's likely either clogged or rotted through or both, and dumping all of the water right at the footing of the house.

Should I get them to take the price down and decide to take this on, I'll definitely look into ramjack or similar. Everyone has told me is all but useless to jack the house up at this point (as I'll break all the windows/create more cracks in the already hard to replace stone on the outside in the process), and that the goal should be to just stop it from settling further, do you find that to be true as well?

Originally posted by @John Matthews :

@Mark Esposito That's almost exactly what the SE said. There's one downspout that goes underground in that corner. We've no clue where it goes. So it's likely either clogged or rotted through or both, and dumping all of the water right at the footing of the house.

Should I get them to take the price down and decide to take this on, I'll definitely look into ramjack or similar. Everyone has told me is all but useless to jack the house up at this point (as I'll break all the windows/create more cracks in the already hard to replace stone on the outside in the process), and that the goal should be to just stop it from settling further, do you find that to be true as well?

John,

I hope you got some sleep last night. Engineers aren't like lawyers...2+2=4 no matter who says it. (or F=MA). If I say 2+2=4 in court the judge won't hear me out because I haven't passed the bar. If my lawyer says 2+2=22 there'll be hearing to see if its true...but I'm getting off topic.  

The downspout most likely feeds into a drainage pipe that is supposed to carry the stormwater away from the foundation. Over the years they do get clogged with debris, roots, etc. and usually clog up and the water just sits around looking to cause trouble...which it will do, no doubt. From my desk I can't say what caused the crack in your basement, only possibilities...and from my experience. You'll most likely need to get out a shovel and uncover the entire drainage route for the water. Give the water a route to find its way away from your foundation. Water runs downhill & gravity is your friend.

 The object is to stop the settling. Whatever it takes.  Whoever 'everyone' is has a point but have they done this? These outfits jack up the foundation millimeters at a time.  There may be 'groaning' in your house while it gets re-positioned but there is probably crooked window sills and door jams that don't fit already.  I know MY house has them.  Look for diagonal cracks above windowsills and door jams around the corner that has the problem. Doors not closing tightly is another indicator.  Adjusting the hinges or door latch isn't fixing the problem.  I can't stress enough to fix the problem that caused the crack in the first place.

 If and when you do this the interior cracks can be repaired and repainted afterwords. The settling may only get worse with additional water seeping under the footings.  Believe you me - every rain storm will keep you awake.

So...The deal depends on the price. Again here's your chance to hone your negotiating skills. If it were me I wouldn't let that crack stop me from buying it...only lower the price (double) to compensate or the cost to fix it. 

Would you buy the leaning Tower of Pisa?  That builder skipped his soils class...and they cut his head off!

Cheeer up... and Good Luck!

What neighborhood in philly? Lots of them were built on fill including trash, demo debris and ashes. Lots of ashes from trash incinerating, and heating. Lots of ash is water soluble. Not to mention there was little soil compaction done back in those days.

You should see some of the crap I find when excavating in Philly

@Joe Cummings  - Sorry I thought I responded earlier. It's in west oak lane. 

Also, for a quick update if anyone is still reading this: I got them to knock the price down $21k to $79k. Just for some quick numbers:

  • Purchase price: $79k
  • ARV: $182k (from appraiser)
  • Rehab costs (not including foundation/masonry work): $20k
  • Expected foundation / masonry costs: up to $25k
  • Anticipated gross rent - quadplex w/2 car garage - around $2600/mo (from several PM companies in the area

So total cash into deal is about $129k, or at 0% down (not what I'm doing) I could cashflow at about $700 total or $175/door.

But - the lenders won't fund the deal. Both the SE and myself (also an engineer) are pretty certain that foundation issues are within the $25k range to remediate (probably in the $15k range - due to the localization of the issue), but the lenders don't want to lend on "ifs" and "maybes" which I get completely.

I think my next step, is to see if I can get the seller to let me dig up along the problem wall, get the SE back out so he can say for sure, it's fixable, in x price range.

The one thing I'm concerned about is that I'm too close to the deal, and I'm getting attached to the numbers, but intuitively, it's a risk I'm willing to take. At least enough that I'll risk spending a couple $k digging down to the footing, and another $300 for the SE.

    Originally posted by @John Matthews :

    @Joe Cummings  - Sorry I thought I responded earlier. It's in west oak lane. 

    Also, for a quick update if anyone is still reading this: I got them to knock the price down $21k to $79k. Just for some quick numbers:

    • Purchase price: $79k
    • ARV: $182k (from appraiser)
    • Rehab costs (not including foundation/masonry work): $20k
    • Expected foundation / masonry costs: up to $25k
    • Anticipated gross rent - quadplex w/2 car garage - around $2600/mo (from several PM companies in the area

    So total cash into deal is about $129k, or at 0% down (not what I'm doing) I could cashflow at about $700 total or $175/door.

    But - the lenders won't fund the deal. Both the SE and myself (also an engineer) are pretty certain that foundation issues are within the $25k range to remediate (probably in the $15k range - due to the localization of the issue), but the lenders don't want to lend on "ifs" and "maybes" which I get completely.

    I think my next step, is to see if I can get the seller to let me dig up along the problem wall, get the SE back out so he can say for sure, it's fixable, in x price range.

    The one thing I'm concerned about is that I'm too close to the deal, and I'm getting attached to the numbers, but intuitively, it's a risk I'm willing to take. At least enough that I'll risk spending a couple $k digging down to the footing, and another $300 for the SE.

    I'm still reading this.   

    So you've got the seller to knock the price down $21k.  Great.  $15k is not out of range. If the lender won't fund the deal the way it is - understandable - the owner needs to fix it first.   He's going to have a hard time selling that to anybody the way it is.

    Keep us posted.

    Originally posted by @Mark Esposito :
    Originally posted by @John Matthews:

    @Mark Esposito That's almost exactly what the SE said. There's one downspout that goes underground in that corner. We've no clue where it goes. So it's likely either clogged or rotted through or both, and dumping all of the water right at the footing of the house.

    ...

    John,

    ...

    The downspout most likely feeds into a drainage pipe that is supposed to carry the stormwater away from the foundation. Over the years they do get clogged with debris, roots, etc. and usually clog up and the water just sits around looking to cause trouble...which it will do, no doubt. From my desk I can't say what caused the crack in your basement, only possibilities...and from my experience. You'll most likely need to get out a shovel and uncover the entire drainage route for the water. Give the water a route to find its way away from your foundation. Water runs downhill & gravity is your friend.

    ...

    I'm not a structural engineer, but have spent some time in the City of Philadelphia. Phila has a single sewer system in the older area where both storm water and sanitary waste water feed into. So that downspout pipe is supposed to tie into the sewer system, not a runoff type of drainage. Blockage could be caused by a multitude of things already named, as well as silly things like balls or dead birds, or even a collapse of the pipe upon itself somewhere underground. Snakes and drain cameras get used to figure it out. I wouldn't suggest excavating until it is determined that it must be excavated to fix that section of pipe (because it collapsed for example).

    @Mark Esposito  - Will do. My realtor doesn't think the seller will go through that (it's a power of attorney sale - the seller is 96 years old). I agree, no one will buy the house as is due to funding, but at prices like this I'm not so sure. That's part of the reason why I'll do it, because if I believe that it's an "easy" fix, I'm going to have to do it anyway, so what's the difference in paying to have it done now versus after the house is mine. 

    @Steve Babiak  So I'm not necessarily to the point where I think it's necessary to remove / redo the drainage pipe, but the impression that I get from the engineer is that without actually seeing the footing (AND what kind of shape that pipe is in) he can't know for sure. It kind of seems like if I need to dig around the foundation wall, I may as well just look at that drainage pipe while I'm down there.

    Originally posted by @Steve Babiak :
    Originally posted by @Mark Esposito:
    Originally posted by @John Matthews:

    @Mark Esposito That's almost exactly what the SE said. There's one downspout that goes underground in that corner. We've no clue where it goes. So it's likely either clogged or rotted through or both, and dumping all of the water right at the footing of the house.

    ...

    John,

    ...

    The downspout most likely feeds into a drainage pipe that is supposed to carry the stormwater away from the foundation. Over the years they do get clogged with debris, roots, etc. and usually clog up and the water just sits around looking to cause trouble...which it will do, no doubt. From my desk I can't say what caused the crack in your basement, only possibilities...and from my experience. You'll most likely need to get out a shovel and uncover the entire drainage route for the water. Give the water a route to find its way away from your foundation. Water runs downhill & gravity is your friend.

    ...

    I'm not a structural engineer, but have spent some time in the City of Philadelphia. Phila has a single sewer system in the older area where both storm water and sanitary waste water feed into. So that downspout pipe is supposed to tie into the sewer system, not a runoff type of drainage. Blockage could be caused by a multitude of things already named, as well as silly things like balls or dead birds, or even a collapse of the pipe upon itself somewhere underground. Snakes and drain cameras get used to figure it out. I wouldn't suggest excavating until it is determined that it must be excavated to fix that section of pipe (because it collapsed for example).

     In Philly it could even be a dead RAT stuck down there...who knows? Maybe even Jimmy Hoffa!

    Haha. Final update (I think?):

    The seller won't let me dig along the wall, so AFAIK there's no way for me to provide some assurance to lenders to get them to fund the deal. Unless anyone's got any suggestions for funding (I'd need roughly $100k - I'm planning on putting about $30k in myself) the deal I'm on to the next one.

    Thanks for all the comments!

    Originally posted by @John Matthews :

    Haha. Final update (I think?):

    The seller won't let me dig along the wall, so AFAIK there's no way for me to provide some assurance to lenders to get them to fund the deal. Unless anyone's got any suggestions for funding (I'd need roughly $100k - I'm planning on putting about $30k in myself) the deal I'm on to the next one.

    Thanks for all the comments!

     The deal sounds pretty good, have you looked for partners? 

    @Troy S.  Not exactly. I'm not against it, I just haven't worked up the confidence to ask for partners, especially on my first deal.

    Why, do you know anyone with some biggerpockets (bad pun...sorry)???

    Originally posted by @John Matthews :

    @Troy S. Not exactly. I'm not against it, I just haven't worked up the confidence to ask for partners, especially on my first deal.

    Why, do you know anyone with some biggerpockets (bad pun...sorry)???

     I wish!!! The numbers seem great, put a packet together and put it up on the Marketplace or the like. Another option is to wholesale the deal. 

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