Finding help with foundation repairs and full house rehab

Real Estate Agent · Santa Ana, CA · Member since 2013 · 13 posts · 4 votes

Hi,

I own a vacant house in St. Paul that needs a new foundation and full rehab. The consideration is also to just demo the house and try to locate an already build new house to relocate to this property. The house has been vacant for years and the floors are not level due to the foundation. I’ve received bids anywhere from $90k-$150k for the foundation work.

So my questions are does anyone here know of a service that can relocate houses and drop them on a foundation? Has anyone taken on a project similar to this or has any recommendations on contractors/companies to assist?

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Amber Gonion

Real Estate Broker · Hugo, MN · Member since 2016 · 688 posts · 596 votes

@Jon Davis there a dozen modular home places in the state, but they are not cheap you are looking at $120/sf, not including slab or basement utility connections, or demo of the old house/site. My concern would be spending that amount of money in St Paul, it would need to be in a premium area to make it worth it.

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Andy SabischPro Member
Investor · Jackson, MS · Member since 2021 · 657 posts · 559 votes
3y
What is the ARV on the property assuming you get the foundation repaired? The quotes you received seem very high (at least from those where we had foundation repairs required) but your area and the size of the house may be the driving factor. Unless you are getting the house for next to nothing, putting $100K into the foundation alone and then doing a full renovation (again, not sure of the size), the ARV needs to be pretty high to justify that type of effort.

As far as moving a house onto the property, are you looking at this because of the property itself; i.e., is it lake front, on a golf course, etc.? It might be a better option to simply find a house that fits your flip criteria and go from there. If the property is valuable, look at the demo costs and either build new or resell the lot.
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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
@Jon Davis
Are you looking to move the existing house? If so, why since it needs complete rehab.
Based on what you wrote I would just demo it and start over. The home will then be considered new construction and would also get a better appraisal.
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Amber Gonion
Real Estate Broker · Hugo, MN · Member since 2016 · 688 posts · 596 votes
3y
@Jon Davis there a dozen modular home places in the state, but they are not cheap you are looking at $120/sf, not including slab or basement utility connections, or demo of the old house/site. My concern would be spending that amount of money in St Paul, it would need to be in a premium area to make it worth it.
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Scott E.
Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
3y
Since you posted in the house flipping forum I'll assume this is a house flip.
You have 2 options - Remodel what's there, or tear down and rebuild. You just need to underwrite both options. I don't know all of your details but simply put it will look something like this:
OPTION 1:
-Purchase: $200,000
-Rehab(including foundation work): $250,000
-Holding Costs: $50,000
-ALL IN: $500,000
-ARV: $XXX,XXX
-PROFIT: $XXX,XXX - COMMISSIONS - $500,000 = Net Profit
OPTION 2:
-Purchase: $200,000

-Rebuild: $300,000

-Holding Costs: $75,000

-ALL IN: $575,000

-ARV: $YYY,YYY
-PROFIT: $YYY,YYY - COMMISSIONS - $575,000 = Net Profit
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Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
Seems like a tear down to me. Build from the ground up
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Tom Fidrych
Member since 2020 · 241 posts · 179 votes
3y
Whether you remodel the existing home or find a cheap home to move to your location, you're going to have to replace the foundation. You will not be allowed to place a new build or used home on the existing failed foundation. So you've got to calculate the all in cost of each option relative to the ARV of each product. Remember, if it doesn't make dollars, it doesn't make sense!
We're entering a period of declining home values and these are the times when poorly executed flips start to burn. I've seen a number of situations in the past several years where someone bought a fixer with no meat of the bones. By the time they finished, the potential ARV was juiced maybe 20-40% just based upon the markets rise. A rising tide lifts all boats. However, the nest few years are the proverbial time that Warren Buffet refers to we has stated that when the tide goes out, you see who's swimming naked.
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
3y
Call the city, they may have a list of contractors.
[email protected]248-209-6824
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Jon Davis
OP
Real Estate Agent · Santa Ana, CA · Member since 2013 · 13 posts · 4 votes
3y
Hi All, apologies for the delayed response. Ill provide a little more color here. The property is owned free and clear. I'd say the ARV is around $300K. The current layout is 3 beds, 1 ba although I'd add a bed and bath in the basement (if a new foundation is done) and there would also be a den area upstairs. The site is located adjacent to another family owned property and the lot size is fairly large for the east side of St. Paul at 12,000 SF (.278 acres). Therefore, no debt is needed on an acquisition. I would most likely use current capital to improve then refi out and rent. Not looking to flip the deal due to it being adjacent to another property.
@AndySabisch - The quotes definitely seem high but the foundation is right around 50'x25' (1,250 SF) and it is failing in multiple locations. I've received 3 bids and they are ranging from $90K (all cash) to $150K. These would include chimney work as well. Thereafter truly need full rehab (electrical, plumbing, windows, drywall, kitchen, bathrooms, roof, ect). Again only reason I am considering is because its free and clear and there is no value in selling the land for our specific purposes. Only reason I was considering moving a house onto it is due to the house being built in early 1900's and it needs a full rehab.
@ChrisSeveney - No, looking to get in a rent ready form then rent out as a SFR. Good point on appraisal with new construction.
@AmberGonion - Great point and I didn't realize they would be around that price PSF along with spending that type of money in east SP.
Due to its age and further deliberating I may just proceed with demo so the vacant house extra tax will be removed from the tax roll and wait for either prices to come down on the rehab/contractors end or the housing market to stabilize to see where these ARVs end up in 12-24 months.
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Evan Kraljic
Investor · Minneapolis, MN · Member since 2019 · 129 posts · 210 votes
3y
Quote from @Jon Davis:

Hi All, apologies for the delayed response. Ill provide a little more color here. The property is owned free and clear. I'd say the ARV is around $300K. The current layout is 3 beds, 1 ba although I'd add a bed and bath in the basement (if a new foundation is done) and there would also be a den area upstairs. The site is located adjacent to another family owned property and the lot size is fairly large for the east side of St. Paul at 12,000 SF (.278 acres). Therefore, no debt is needed on an acquisition. I would most likely use current capital to improve then refi out and rent. Not looking to flip the deal due to it being adjacent to another property.
@AndySabisch - The quotes definitely seem high but the foundation is right around 50'x25' (1,250 SF) and it is failing in multiple locations. I've received 3 bids and they are ranging from $90K (all cash) to $150K. These would include chimney work as well. Thereafter truly need full rehab (electrical, plumbing, windows, drywall, kitchen, bathrooms, roof, ect). Again only reason I am considering is because its free and clear and there is no value in selling the land for our specific purposes. Only reason I was considering moving a house onto it is due to the house being built in early 1900's and it needs a full rehab.
@ChrisSeveney - No, looking to get in a rent ready form then rent out as a SFR. Good point on appraisal with new construction.
@AmberGonion - Great point and I didn't realize they would be around that price PSF along with spending that type of money in east SP.
Due to its age and further deliberating I may just proceed with demo so the vacant house extra tax will be removed from the tax roll and wait for either prices to come down on the rehab/contractors end or the housing market to stabilize to see where these ARVs end up in 12-24 months.

The ARV is 300k and you're considering spending 100k+ on foundation work plus a full rehab after that? And you're in East St. Paul, before a potential recession? Sounds like a great deal... if you like losing money. I don't mean to be an A-hole but I just don't see how in your right mind you'd even consider this. The seller would need to pay you for the original transaction for it to make sense #s wise
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