I have recently, one month ago exactly, purchased my first rental properties, which are two duplexes on one lot in Manitowoc WI with a driveway separating them. I made an offer sight unseen due to the price vs. cash flow. All 4 units were rented out when I bought it and still are. I had some concerns about bowing and cracked foundation walls and let my realtor basically talk me into still purchasing the units knowing that foundations can be scary things to fix. Fast forward a couple weeks after closing and I had a local construction company check out the property to find out that he had checked out this same property 4-5 years ago and says the properties were going to be condemned. He doesn't have any paperwork stating that this was known by the previous owner and I have no way to prove they did know that. I have not heard anything from the city or anyone else saying that my properties will be condemned, only the construction company that is apparently friends with the building inspector. I asked him to quote me a cost on holding the house up and putting in a new block foundation. The current foundations are brick and stone respectively and are circa 1900. I got a quote for each property and about had a heart attack. The total cost for replacing the existing basement walls with block totals $130,000 including replacement of the driveway. My question to everyone here is do you know any good masonry, concrete, or block construction companies or licensed professionals that could possibly be a more economical solution that will travel to or are near Manitowoc, WI? At the price I was quoted it doesn't make sense but if I limp it along for 3 years I will more than have my money out of the place. From the info I am receiving from companies in the Manitowoc area I'm looking at probably 50-60K if I just do the two walls and redo the driveway or 130K to replace everything. My only option if that is the case is to get a permit and do it all or mostly myself, in which case I would jack the houses up a few feet, get the forms, and do a poured foundation. I have access to excavation equipment through family and friends and am very much so a DIYer, but I feel like this is a very intense project that could become very costly very quickly. My problem is I need to spend less than $60,000 in rehabbing this property for the numbers to work. I have all winter to learn as much as possible and get as many quotes as possible, but feel like they are all going to be outrageous. Any advice is appreciated. Only one wall of one property should be replaced soon, but I feel like if I do that one, since it is a wall by the driveway, that I should do the wall on the other unit that is next to the driveway so that I can replace the driveway at the same time. Ideally I would like to do it all at once but feel like I need to have the buildings unoccupied to do it correctly. Anyone have any similar situations and if so what did you do about it?
I'd look for contractors in Green Bay or maybe Sheboygan. Thought with only doing the one wall on each is if they have to replace the wall in the backyard are they going to take the equipment over the new driveway and wreck that? Would it maybe be worth just doing one building now and the other down the road? I don't know anything about foundations but just my 2 cents.
In regards to previous owner knowing you could look at the city or county assessor they usually show purchase history and can tell if this owner would have even had ownership in that time frame 4-5 years ago.
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The driveway would be tore up to do the two walls, so it would be replaced after the walls were done. The driveway is between the two units so I would dig up the driveway and do the south wall of the one house and the north wall of the other one, back fill, grade the driveway and pour a new one that is properly pitched so water stays away from the basement. I just got that quote today and for the two walls and driveway it is $37,500. Higher than I think it should be but at least something I can entertain.
The previous owner had it for 5 years, so it may have been quoted just before they got it or maybe while they had it, but that still wouldn't prove that they would have any idea that the buildings were going to be condemned, at least not that I can prove. That conversation was apparently between the construction guy and his buddy the building inspector. I am not going to worry about that so much. I just have to learn as much as possible so I can be prepared to do the job this spring myself.
I may just keep it cash flowing and save every penny and see if I can get a few years out of it before doing anything. I want to get my money back out of it within 3 years and then start rehabbing as needed if possible. I may talk to the bank about getting an after repair value loan and see if putting the money into the foundation causes the property value to go up by the same amount or more as I am being quoted. If the value only goes up 65k and it's going to cost me 130k I am going to have to get creative and find a way to get it done for under 65k. If I get the houses jacked up and do the excavating myself I could easily save 40k based off the estimates I have. I could look into finishing the basements completely and see what it would take to make them able to rent. Lots of variables and things to consider and research. I will make it work, I just hope it isn't as big of a headache as it seems.
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