Wondering if I should add a perimeter foundation to an old buy and hold triplex.
As a complete newbie a couple years ago we bought a charming old Victorian converted into a triplex and by old I mean probably built in 1800's. Instead of a perimeter foundation it is built on post & piers. Pretty common for homes in this area of that vintage. We were even able to do an FHA loan on the place because post and pier is common in the area. I know some folks wouldn't touch an old place like this with a ten foot pole, but so far it seems to be working out pretty well. We've converted the alley garage into a fourth unit and the place is above the 50% rule (which is pretty hard to do in the local market).
I've been looking to get a HELOC or cash-out refi and get rid of PMI. A local appraiser said that a perimeter foundation would add about 15k to the property value. From a little investigating I think it would cost about 15-20k to add a foundation. So, on the one hand it would add value/increase our equity perhaps enabling us to get a HELOC and eliminate PMI. On the other hand we'd probably have to borrow money to do the foundation and the house isn't currently showing damage/issues for lack of a foundation and that's 20k I'd like to be investing elsewhere. Thoughts on what we should we do?
If the house is structurally sound without adding a foundation I would pass. Is the foundation necessary for a HELOC or refi?
Thanks for the two cents @Paul Sorgi . No, I'm pretty sure that I'll eventually be able to get a HELOC or refi without the foundation. But it would bump up my equity which could help make it happen sooner.
Hey @Orion Walker
Did you finally get around to redoing the foundation on your Triplex?
I'm looking at buying a similar 4-plex with post & pier foundation. Was wondering if you know how much it would end up costing to do this. (4-plex, 2 storey, 1500sqft each floor)
I read elsewhere that i'd need to get an engineer and the city involved, is this correct? I also spoke to a few contractors that said that I don't need the city involved as i'm not adding anything to the building just making modifications.
Would be great to know your thought.
Hi @Siddharth Shastri d, I haven't pursued doing anything with the foundation, and realistically I probably won't for quite a while if ever. The property cash flows well, so I'm not really focusing on resale value issues. It would be nice to increase my equity and ability to draw money out of the property, but for now I'm mostly focusing on general maintenance and repairs, and then preparing for things like a new exterior paint the in the next couple years. I've got plenty to do to tighten up the property before I'll worry about the foundation. The post and pier foundations are pretty common in this area, so I'm not even sure how much of an issue it may be in terms of valuation. I was told t would increase property value by about 15k. I have a neighbor that got a foundation done for $16k, but I've been told by other contractors that a more normal figure would be 30 - 70k. I have another property of similar size where the seller had to do foundation repairs before our loan would go through and they spent 25k just on repairing some sections (that was a top dollar contractor for our area, other folks thought it could have been done for $10k).
As for needing to get city/engineer involved, I would think you would want to do it with all necessary permits if you are concerned at all with resale value. I think the contractors are right in that it would be a simpler/cheaper permit process because you aren't adding anything.
Hope that helps.
My background is in construction. 35+ years. I just cant see how you can get it done there in Cali for that as I don't think I could get it done here in Texas for that little. Now that may be what they charge on their part but consider this. They would at some point I believe jack that house up to set the forms and pour the footings then set it back down. A massive undertaking. The intangibles from there would be plumbing broke loose that needs to be redone...another permit. Once you cross that threshold they may make you redo the electric depending on your AHJ. You would at least have to have it disconnected while they are doing the house raising. Even OH wires probably. Inside you would have walls racking and sheetrock would be damaged and when that happens the best may be to redo all the texture and then repaint. If they make any mistakes, the house may never be the same as it was.
As an aside. I worked on a house once in east Texas that was built before 1850 that was set on cypress piers. They have never rotted and are still there. Pier and beam houses usually have less rot that slab on grade.
I would find a cheaper way to get equity that would not cause you to lose sleep three months down the road.
if you're pouring a foundation wall around your home you have to consider the inspections are going to be a lot harder on that home to get done and also you're limiting access for other things such as plumbing if you got gas these are all things to take into consideration when doing this the house is fine the way it is and your attempt to make it better might end up making it worse you might end up with cracks in there after a while leave alone if it ain't broke don't fix it
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