If you find my other posts, you'll see my interest in a 5 unit apartment complex in a C area. I now have it under contract.
I had the building inspected this week. The building was built in 1910. The inspector found settling (as expected) but said overall the bones are good.
Today calling around for various quotes addressing issues discovered I contacted a General Contractor. Lot's of great reviews online, well known in the area. Does everything from new builds to remodels, and everything in between.
Anyway, he went over since the 5 unit is close to his office and did a walk around. He said, "I wouldn't take this if someone gave it to me". He sited settling and said the bones were not good. I did not pay him for his time. I did pay for the inspection.
Who's right? I'm going to attempt and get a quote from a foundation specialist. I'm also going to get the opinion of another GC. I don't know this GC, but his initial impression online and over the phone (been in business 40+ years) seems pretty solid. He doesn't have a reason to lie, as he could get the job if I close.
Here are some pictures if someone wants to weigh in. At this time I'm not subscribing to any wild theories like the GC wants it for himself.
Everything is a matter of someone's perspective. I have people here in the DC area who have issues with every day items on their inspections like loose toilets that they think are the end of the world. If they went to New England where the housing stock is much older, they would think every house up there should be condemned.
If that GC does more work in A class areas, he might think most C class stuff is crap.
@Pat Jackson It could be that he is also fattening you up for the kill. Its not his job to tell you what you should have bought. Its his job to tell you what you can do with it from here.
From the pictures you posted it doesn't look that bad. Do you have pictures of the roof line? You can tell a lot about the foundation from that.
I am an architectural designer and expeienced builder. I would not total ignore any possible foundation work being needed but from your pictures I would think the work if needed can certainly be done a long way down the line. I would worry if the floors were out of kilter enough to prevent a normal person from standing up right or walking on the floor without falling. I mean you can tell from the pictures that this is an old foundation and stem wall. However, that in and of itself does not mean it needs to be replaced tomorrow.
The arguement that the foundation should be replaced can always be made no matter what just like you can always argue an electrical system should all be replaced because it does not carry a ground wire. However if things remain serviceable then they are serviceable period.
This is just my opinion and I have nothing to go by except the pictures you provided but I would think you will have penty of years to handle any foundation issues step by step. I saw nothing in your pictures that scream out at me, " danger, danger, danger".
@Pat Jackson Looking at what he has pictures of the fixes should be minor. By minor I mean not too bad as far as floor repair goes. The pictures of your roof line look good and straight. If the ridge is straight it usually means the floor isn't that bad. At least the load bearing walls anyway. The hardwood floor sinking could be just from the sistered joists that have sank down a bit. A few piers on those and it should raise it right up. I would get a foundation repair specialist like you said.
You have a few different materials used in that foundation, i agree with @Russell Brazil on this, yes there seems to be some " handyman" work done, but nothing bad enough that can not be fixed with some jacking up and repairing certain areas. the contractor probably does not want to bother with it ( who knows, he may want the property himself after seeing it) so he is trying to make you think there is a ton of work to either give you a high price or hopes you will walk away so he can grab it. the roof, plan on installing a new roof, shingles look close to their life span and not because of the color, look at the gaps between each tab ( the views from above show it best) when they start to widen up that means the shingle is drying up and close to the end of it's useful life.
@Pat Jackson I like to get the opinions of my local handy men as well as the "GC" types. Your inspector is always your first line of defense, but they don't get a chance to spend that much time really looking at this stuff. I have started bringing one of my local guys (who will most likely end up doing the work anyways!), as I also value their opinions. If you don't have one of these guys, start asking around to other seasoned investors.
From the photos you posted, I would not be concerned. If you have access to that crawl space, just budget $1500 to have a guy shore up the boards under the house by sistering them in and putting in posts if necessary. This type of work is not rocket science, and you won't need a fancy company to do it.
If the rest of the deal checks out, I would pull the trigger.
With two very different opinions I would be looking to get a 3rd. I wouldn't want to gamble on a foundation and end up spending tens of thousands to fix it that was not expected.
You said this was a C class property. So your inspector was likely giving his opinion based on the assumption that you intend to keep this a C property and not try to make it nicer.
So, assuming you want to keep this C Class, you don't need to fix uneven floors etc. You only want to make repairs necessary to prevent further deterioration and that is likely feasible.
The General Contractor might be used to rehabbing things into A/B class condition. So, to him it doesn't feel acceptable to leave uneven floors etc...
So, my opinion is that BOTH of them can be right but that they are answering the question with different ideas of the end goal in mind.
I bought a property just like this. I thought I could repair some of the tuck-pointing etc down the road. Then I got a citation. I bought my property for 155 estimated Id put in 20k. So far I have put in about 40k (not including any unit renovation) in less than a year. However, I have the building looking decent again. Tuck-pointing was about 8k. looks like you have some rotten wood. I also think your floors need some work. How much do you have budgeted to fix the problems?
Id recommend replacing those boards with glass block (about 300 a window). It keeps water out and seals the building.
How is the electrical and plumbing?
As long as you budget in the repairs you should be okay. I would have your GC give a ball park estimate that you can show the seller and renegotiate the closing price, even if you are buying As IS.
I thought I should follow up on this thread. I haven't met anyone in person regarding this deal.
The inspector was very prompt in inspecting the property. His prices were reasonable. The report he provided was high quality, and the .pdf was great. He was also prompt to return my calls, emails, and text messages when I had follow up questions. All that said, his review was a little "light". When I asked about the life of the roof his reply was something to the effect of, "I normally don't provide remaining lifespan, but with no guarantee I would say 5-10 years."
I've worked with one other inspector in my investing career (3 others with buying primaries). I understand we live in a litigious society. I believe this inspector has a lot of potential, but I need to establish a relationship. I need the real deal, not something a lawyer would sign off on.
The GC has proven to be a great guy. He pointed out there wasn't a 2nd point of egress for the 2nd story. He had a contact with the city and got the details on what it would take to make the place legal. Most importantly, he pointed out the two existing water heaters were in parallel. The MLS listing stated 5 water meters (5 units). This begged the question what's going on. Apparently the city meters require a special tool to open the cover, so the inspector "couldn't" look. The GC did whatever needed done, and what do you know....one water meter.
And then there's the foundation. The GC says it needs a lot of work. The inspector said there has been settling, but it's not a big deal. This discrepancy bothers me. I'm surprised, but all foundation experts I could find either didn't return my calls, or couldn't check out the foundation before my inspection contingency was up.
Last day of the inspection contingency is tomorrow (10/22/2018). Long distance real estate investing sure isn't boring!