Can I purchase a house with Foundation issues for Flip

Question

How much value goes down for a house with foundation issues, found a house for FixNFlip, they mentioned it has foundation issues and they got them fixed, but whats the value reduction from market price , How safe it is to purchase house like these

Brad S. · Answer

Basically, I agree with most of the responses, Bottomline, it's best if the repairs were done with all required permits, inspections, plans and engineering, etc. And all that should be verified and verifiable to future buyers. Photos before and after are always helpful also.

It also depends on the extent of the foundation damage and repairs, I have done minimal slab crack repairs on flips and disclosed to buyers, without any issues, and I have also done more extensive slab repairs with plans, permits and inspections, and also disclosed to buyers, without any issues.

Actually, damage discovered and properly repaired and disclosed can show the house is in better condition than similar houses, which may have undisclosed or undiscovered issues. One of my last flips was one of the latter. I had the foundation cracks repaired and tied together with engineering plans and permits, and also had to completely redo the pool and fix the cracks, and recompact the entire rear yard with geological engineering and inspections. Along with the complete remodel, those verified repairs ended up selling the house in about a week. The buyers had just cancelled escrow on another local house which had previously undiscovered potential foundation/yard slippage issues, which were found out during inspections. While my house had all those issues addressed, repaired, documented, and disclosed. This contributed additional appeal and incentive to the buyers.

Also, it is always a good idea to talk with local experts. Seek out some of the top active Realtors in the Subject's market area and ask them. They know better than anyone.

......Oh, and you can also get some of the better deals when buying those properties, as long as you have a good idea of the potential extent and cost of the repairs and plug that (with a healthy contingency) into your proforma.  Many people, including investors, won't want to deal with those properties.

Caleb Brown · Answer

If you fixed the foundation right and have receipts/warranties it's not a big deal. Just make sure you get bids when getting your scope of work before buying. In my area foundation issues is common so it's something to include in the numbers. It can get pricey so don't assume the cost. If you flip again make sure a legit company does it to help ease future buyers

Carini Rochester · Answer

"has foundation issues and got them fixed . . ." Way too vague! What were the extent of the issues? What steps went into getting the issues fixed? Was a licensed engineer involved to design to repairs? Was a building permit issued? Was the work inspected? If the remedy was designed by a qualified professional, the work carried out be an experienced contractor, the work was permitted and inspected by the town, then the value reduction would be zero. If shortcuts were taken, and/or your inspector sees problems with the repairs, then it might be the worst case scenario that you would walk away from. I have been involved in many foundation repairs and we get the improved foundation up to as good or better than new.

Malcomb Stapel · Answer

@Rajagopalarao Paidi  some areas of the country it is perfectly normal for foundation issues given the soil types and building techniques of the time. In those cases, as long as they are properly remediated, it's generally not an issue, but, you will always have some buyers who are scared away when they see piers, or bracing. If the remediation devices intrude significantly into the livable space, that will probably detract from value.

Rajagopalarao Paidi · Answer

Thank you all for your inputs and sharing your experiences, appreciate it

John Clark · Answer

Not safe at all unless you have an INDEPENDENT inspector who really knows foundation issues gets all the documentation from the seller and talks to the seller’s contractor and then conducts his own inspection of the foundation, house, and surrounding lot. That’s expensive and time consuming. Me? I’d walk.

Can I purchase a house with Foundation issues for Flip

Most Popular Reply