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?
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
Real Estate Agent · Lowell, MA · Member since 2018 · 18 posts · 48 votes
6y
@Logan Merrick I would submit an offer with an inspection contingency. Get a structural engineer into the property during the inspection to get a better idea of what is going on. That way you can lockup the property and if the damage is severe you can renegioate the price and see if you and the seller and come to an agreement, plus having evidence to show seller will give you much more leverage during the negotiation. Good luck!
Rental Property Investor · San Diego, CA · Member since 2020 · 26 posts · 32 votes
6y
@Logan Merrick Insurance companies won’t insure a place with mold until it’s removed and materials are replaced. As a wholesaler, you wouldn’t want to be in that predicament of knowingly selling a property with mold damage. The right lawyer could take all your company’s assets.
Rental Property Investor · Elmira, NY · Member since 2019 · 11 posts · 12 votes
6y
@Logan Merrick
Funny you post this, I just put an offer in on a house that I feel has some questionable spots in the foundation. My agent wasnt too worked up about it, but I will definitely be emphasizing it to the inspector.
The way I see it is if you can get the house for a price that enables you to fix the foundation then its not so bad.
In my case I'm looking to buy, fix up, and hold for the time being, this might be different for you if you're trying to wholesale.
This is my first property, but I'm confident in inspectors and my contract to get me out if it turns out to be worse than I thought. The seller has already agreed to a small concession in preparation to us getting it inspected, which was a big deal for us.
Finally, I think at the very worst case is it ends up being really bad and we back out from the offer and lose our inspection costs and contractor estimate costs. Which isnt too bad compared to the amount it would cost to fix a very broken foundation.
Realtor · Chicago, IL · Member since 2019 · 45 posts · 56 votes
6y
Hi @Logan Merrick, check out my summary of my fourth deal from the top on my investment section. I dealt with a substantial foundation repair on a 7-unit here in Chicago. If you can wrap your head around it and the numbers work, go for it! But it certainly is easier to start with a straight and solid building :) Cheers!
I agree with many of the others. Get an inspection and estimate from a foundation company and a mold remediation company. Understand the scope of the issues before you move forward. I recently rehabbed a home with foundational issues, had to put in three piers to stabilize the home. They are lifetime guarantees, so that made me feel a little better but it will only cover the areas where the piers are placed. It cost me right around $3500 for the engineering and pier installation.