To flip or not to flip, that is the question

10 Replies

We came across a promising property through our direct mail campaign.  The numbers all look decent for a flip BUT......

After walking through the house everything looked good until we walked into the basement and found many cracks on the floor and walls that were repaired.  The owner is a investor who is currently using it as a rental and he said they were like that when we bought it.  There is no documentation as to who repaired the cracks.  There is also no moisture from any of the cracks leaking.  

Would you still make an offer and have a inspection out in the contract to have a company take a look before closing or is this a huge turnoff to a retail buyer?

Picture below.

I'd have an engineer look at it first.  Are foundation issues common in your area?

@Todd Plambeck

 Yes a crack or two is common but with this property there are about 15-20 cracks that have been repaired.  Seems like a bad batch of concrete if you ask me.

@Daria B.

It looks that way right!?  It is actually a steel support beam that is rusting.

@Ryan Billingsley I would think you could have a contingency to have it inspected and what ever falls out of that inspection, deal with it. Might just not be a bad patch of concrete and I agree with @Todd Plambeck definitely have an engineer look at it.

How were those cracks repaired? It's hard to tell if it's epoxy or hydraulic cement or just a skim coat. I can tell you that my residence had a large crack at the window well on a 45 degree angle. Repaired with epoxy over five years ago and no leaks since. But the form holes (where the forms were attached with ties) continue to show small leaks.

You can almost always tell if there are leaks by examining near the cracks. You'll see salt-like deposits left on the concrete.

As far as structural issues, use a quick test with a golf ball upstairs. Gently set it down and see if it moves without a lot of intervention. Especially from the middle of the house to the sides. A gentle shove from the center toward the outside of the building should stop rolling. If it speeds up, you have some bigger settling. 

Looks like they tried to use some Drylok on the floors. Won't work for large leaks. The floors will often move too much for that stuff to maintain a bond.

I am planning on having a contractor w/ experience in cracks take a look at it.  I know it is a turn off to someone buying as a primary residence.  Want to make sure it was done right!

If I were in your shoes this would be a big red flag for me. Sounds like you are bringing in a pro to have a look.

I also agree that if I was the end buyer seeing all of that would bother me. If it ends up not being a big deal and you can get a report from a pro that says so you might be good to move forward and help make your buyer (and his home inspector) feel better about it.

If it is indeed bad enough to require a professional to fix it then adjust your offer price accordingly. If the seller doesn't accept I would walk. 

It's one thing when you miss an item that ends up costing an extra $2k that you didn't budget for. It's another when it's potentially $10's of thousands to fix a foundation. 

Update:

I walked through the basement with a contractor with concrete experience and it looks like most of the cracks were not fixed by a professional and it looks like the basement could use piering which can get VERY expensive.  We decided to pass on the property.

Originally posted by @Ryan Billingsley :

Update:

I walked through the basement with a contractor with concrete experience and it looks like most of the cracks were not fixed by a professional and it looks like the basement could use piering which can get VERY expensive.  We decided to pass on the property.

Sounds like you dodged a bullet.

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