We have a duplex under contract. On paper, it's an incredible property with a CoCROI around 23%. Seemed too good to be true, then we began our inspections and found out maybe it is. The house is on a steep grade, which gives the tenants a 2 story balcony, overlooking Downtown Chattanooga. One on the main floor, and then a private balcony directly above the main balcony off the master bedroom. People pay a lot for these views around here. However, the entire corner of the the house appears to be shifted. It's cinder block and there is a stair crack beginning at the bottom on two sides, coming together closer to the top. The bottom portion of the crack has shifted out from where it was, around 1.5". Mortar has fallen out, and in some spots you can nearly stick your hand through. I had the local foundation specialists come out and take a look. Then we found out they had already installed 10 helical piers 3 years ago on this property. They have guaranteed the foundation not to shift any further. They offer a lifetime warranty and will make free adjustments if ever needed.
However...the crack. It looks terrible. It looks awful and scary. I even had a structural engineer take a look. He says "it looks worse than it is". Even still, I may have a hard time sleeping at night knowing this monstrous crack exists in the foundation of a property I own. My biggest fear is the resale. I asked my wife, "Who would buy a property like that with a massive crack?" She said, "Us". I'm not as convinced as she is. If the returns weren't so incredible I would have already walked. The icing on the cake was that this property is being sold with 3 additional lots on the ridge, all three with incredible views of downtown Chattanooga. Would this crack scare others off? Would the Foundation companies "lifetime guarantee" make you feel any better? I mean, what if they belly up?