Need help from the vast knowledge in here.
I found what looks to be a great property in terms of location and value add. I’m looking to put an offer down but there’s one concern, the foundation.
It’s a small apartment complex in the heart of a thriving downtown area. It’s on the edge of a flood zone, naybe the 500 yr flood area. Management has left room to raise rents. Units need a little sprucing.
The problem is the building seems to have a foundation issue. There’s “stepping” in the bricks, the balconies are showing rebar, and it just feels like it’s leaning slightly when inside.
How should I approach this ahead of PSA?
- Get a rough estimate without spending money, if that’s possible, and reduce offer price or havevthe work done by current owners?
- Get it under contract and get a thorough inspection, then renigotiate?
- Other options?
I have not undertaken such a project but the upside is there and I want to learn what I don’t know.
I understand that I won’t really know how it is until they start working on it. It could be as inspected or worse.
Any knowledge, lessons learned, things to watch out for, etc would be appreciated.
You could ask them to pay for a structural engineer to guarantee the property is safe. It wold depend on how motivated they were to sell.
I would think this would turn off a lot of buyers. Personally I would get an offer accepted and then pay for my own structural engineer to come out and give an estimate, and use the cost to renegotiate off my bottom price.
I would try and look at the situation as an opportunity rather than a problem.
@Brian Ellis I do see this as an opportunity but may be biting off more than I can chew. I see huge opportunity but it’ll be a bigger project.
Any recommendations on how to find someone to partner with that has experience in these project types?
As others have stated, you want to get your own independent engineer to give you a report so you know exactly what needs to be done and can then estimate costs. This should only cost you a couple hundred bucks. Do not go to a foundation company to give you an initial estimate as they may very well tell you that you need to do way more than is necessary.
If you believe its a great deal, and the numbers work, don't let the foundation scare you away until you have reason to be scared. Find a trustworthy structural engineer to give you an idea of whats going on, and what it will cost to replace.
Thanks for the advice.
My takeaway is to make an offer without reducing potential costs, during diligence get a solid estimate, and then renegotiate deal.
@Jon Dorsey that’s what I would do. My house had all kinds of problems, the one that scared me the most was the sill/structure. Turned out to be an easy inexpensive job, 4 hours and a $1000 later I had the place structurally sound.