Would you offer on a house that has foundation issues?

Rental Property Investor · Lincoln, NE · Member since 2020 · 22 posts · 20 votes

Looked at a house that has sat for over a year vacant that was bought at auction. Has some mold and major foundational bowing in the basement. Should I make an offer or stay away?

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Member since 2019 · 1k+ posts · 1k+ votes

@Logan Merrick

From the sounds of it, you may have limited experience with fixing foundations? If so, get 3 quotes, take the highest one and add a 20% buffer. So 1.2x highest quote. Subtract that from the offer

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Tristan Church
Rental Property Investor · Wilmington NC · Member since 2020 · 20 posts · 3 votes
6y
I would pass on it. Some people are more willing than others to deal with headaches, mold and foundation are too much of a headache for me. Mold remediation can be very expensive as can foundation work. There are so many deals out there I would just search for another, or, this would have to be a ridiculously good deal that would be too good to pass up for me to proceed.
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Caroline Widjaja
Rental Property Investor · Los Angeles, CA · Member since 2018 · 84 posts · 54 votes
6y
I would definitely stay away for any foundation issues in the property. It will cost a lot of money to fix. You can try to get 2-3 foundation specialists and compare. Beware of someone who gives you a VERY low quote among all of them.
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Caroline Widjaja
Rental Property Investor · Los Angeles, CA · Member since 2018 · 84 posts · 54 votes
6y
Originally posted by @Logan Merrick:
@Kris H.
I am completely new to investing, so this is super helpful. Thank you!

Honestly, I would suggest you to stay away since you're NEW to investing. You have to know the Rehab Costs & After Repair Value to make sure that the project is profitable to you. In my perspective, buying is much harder than selling. Please take time to analyze the deal before you move forward. Don't ever feel rush to buy.

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Pat L.
Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
6y
I've seen a lot of them around here & have never been able to justify the expense with the tight margins we have. After repairs here you're often left with a basement wall held up with steel beams that most buyers shy away from. They sit on the market a long time & sell for a much lower price.
Now a local investor just told me he bought a foreclosure & discovered foundation issues after they were well into the major rehab upstairs. Got to the basement, tore off the basement walls & bingo big problem. They have to correct it & will lose a LOT $$$ on this deal.
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Brian Ellis
Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes
6y
Mold is really no big deal. I cant count how many times ive had to clean it up or replace materials.
As far as foundation you will get a HUGE range on prices to fix, from different contractors. My last house had a bowed foundation from tree roots. First, I would figure out why it is bowing, and see if it is going to be an on going problem. Second get a couple quotes. There are lifetime warranty programs from certain companies that do strapping techniques. That's what was done on the house I bought, but the seller paid for it. I believe it cost around 10k.
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Bruce Dalis
Flipper/Rehabber · Bayville, NY · Member since 2014 · 42 posts · 12 votes
6y
@Logan Merrick
Yes make an offer as long as you have the costs to make repairs included in your numbers. This is an opportunity to buy a house with discounts.
You should disclose the foundation issue to the next buyer so addesss the ARV accordingly, as you buyer will try to discount you
Good luck
G
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Alice Huang
Investor · Austin, TX · Member since 2020 · 223 posts · 83 votes
6y
@Logan Merrick
Hello Logan, I would get a few estimates, submit your offer with the reasons (and attach the estimates) why your offer is at that price. Speak logic and respect to justify your offer by showing the true worth.
Hope that makes sense?
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Ryan Proffit
Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes
6y
@Logan Merrick what’s up brother? Best of luck to you in this game.
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Ryan Proffit
Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes
6y
@Logan Merrick what is the foundation? Sounds like maybe it’s brick if it’s bowing on all sides. If you can get it next to nothing it could be a deal. A lot of it also depends on the area. If it is brick, it may need to be raised/shored, and have a block foundation to restrengthen.
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Logan Merrick
OP
Rental Property Investor · Lincoln, NE · Member since 2020 · 22 posts · 20 votes
6y
@Ryan Proffit What's up Ryan! Yeah it is brick, but it has this skim stuff over it and that is falling off. I had a seasoned investor friend look at it and he said to stay far away from it.
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Hai Loc
Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
6y
Originally posted by @Logan Merrick:
Looked at a house that has sat for over a year vacant that was bought at auction. Has some mold and major foundational bowing in the basement. Should I make an offer or stay away?

If its ripe to purchase for land value and construct a new build.. most definitely
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Ryan Proffit
Saint Joseph, MO · Member since 2018 · 401 posts · 244 votes
6y
@Logan Merrick agreed, they use that surewall junk to hide issues. My dad has been a brick layer for 45 years, I also worked for him for several years. Let me know if you ever have questions.
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Account Closed
Property Manager · Boston, MA · Member since 2014 · 194 posts · 73 votes
6y
Ill be really honest here. ((((Pass on the deal)))). What’s easier to cure bad tenants or bad foundation. That’s like marrying a divorced mean beautiful girl with kids. being blinded by emotions what get people into trouble...

Hope that helps

P.S there’ll be other foreclosures worth less headaches.
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Logan Merrick
OP
Rental Property Investor · Lincoln, NE · Member since 2020 · 22 posts · 20 votes
6y
@Ryan Proffit will do!
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Ninan T Karimpil
Philadelphia, PA · Member since 2017 · 1 post · 0 votes
6y
@Logan Merrick Why Not an offer with terms?
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AJ ShepardPro Member
Real Estate Syndicator · Portland, OR · Member since 2014 · 453 posts · 312 votes
6y
I would highly suggest to get a foundation contractor and have it checked for a quote. Typically we would find this out during the inspection period so we would probably hedge on offering on the lower side and then during the repair addendum make sure that we could get the costs covered. It sounds scary, but when problems exist so does opportunity.
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Joseph CacciapagliaBusiness Member
Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
6y
You can't just get foundation quotes and subtract that figure. Often when doing significant foundation work, you would damage the plumbing and create some other structural or cosmetic damage throughout the home. The foundation repair company will typically not cover any of this damage, because it is expected. This is why even a lot of my experienced investors won't touch serious foundation issues, unless it is an amazing deal.
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Craig McLaughlin
Rental Property Investor · Robins, IA · Member since 2015 · 45 posts · 18 votes
6y
@Logan Merrick
I recently looked at a foreclosure with mold and foundation issues. Got a couple bids and figured it into the price plus a large margin. Seller (bank) just wanted out. Ended up getting my price which was about 30% less than what they wanted. Foundation repair company fully vetted and even they are saying I gat a steal. Not all work on house is done yet so still no verdict on good deal overall or not but it’s looking good. Just price it out and go from there. Good luck.
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Timothy Swenton
Rental Property Investor · Gray, ME · Member since 2016 · 72 posts · 13 votes
6y
Originally posted by @Logan Merrick:
Looked at a house that has sat for over a year vacant that was bought at auction. Has some mold and major foundational bowing in the basement. Should I make an offer or stay away?

I am an excavation contractor myself so foundation issues usually help me get better deals. Problem is not all foundation issues are the same. Many are easy cheap fixes for me, BUT others make the house useless and need to be torn down.
SO it all depends I would get an excavation/foundation contractor come with you to check out the property and quote you to know the cost to repair. Could be drastic range of prices.
Long story short dont shy away from foundation issues, but get a contractor to help you quote them.

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Ned J.Pro Member
Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
6y
That's a really big bite to chew for a first time investor........ as a new investor you already have a decently steep learning curve to face...... taking this on makes it WAY steeper and riskier...... Bought by another investor that is now trying to offload it....been sitting for awhile.....challenging issues.....new investor...... sounds like a HUGE risk to me...... PASS
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Bob Prisco
Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes
6y
@Logan Merrick much to open ended of a question. , If the price is right, and you are experienced then sure,. But there are so many deals, why mess with something that you are not experienced with .But again, if you get it for the right price
Good Luck
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Pete Storseth
Investor · Houston, TX · Member since 2019 · 274 posts · 61 votes
6y
@Logan Merrick
Not me
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Tyler Bushey
Investor · Biddeford, ME · Member since 2017 · 282 posts · 180 votes
6y
Absolutely! I'm closing on a place shortly which has a 70ft long and 8ft tall retaining wall that's about to collapse. I'll try to get a pic tomorrow!
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Steven Gesis
Investor · Miami, FL · Member since 2015 · 1k+ posts · 390 votes
6y
@Logan Merrick
Foundation issues are not a big deal if the cost allows for the major repair - meaning the deal is sooo good!!! On the other hand many will pass on the opportunity and for most it's beyond the "comfort zone" so you stand a chance to come in with an aggressive offer
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Account Closed
Rental Property Investor · CA · Member since 2019 · 84 posts · 50 votes
6y
I've ran into this situation a few times. I'd suggest getting a bid on the foundational work for sure
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