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Updated over 5 years ago on . Most recent reply

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Kyle Jones
  • Abilene, TX
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Foundation can't be perfectly fixed?

Kyle Jones
  • Abilene, TX
Posted

So I am looking into a flip that is listed at 75k, ARV is roughly 165k. (3/2 1650')

The foundation inspection/bid came in at $11,100, with the biggest spot being a 3" split from center to one corner. The issue with this is they are saying that it will only level out by 1.5"-2" and will not be fully level after repairs. (Pier&Beam foundation, 1940s build) So after the work is done, we would be looking to sell this with a known 1-1.5" split. They are, of course, offering a 10yr warranty on the work that is transferable, but I am wondering if anyone would be willing to buy this knowing that it's not level/has a foundation issue that won't be fixed. If I were buying a home to live in, it would definitely scare me, even with the warranty. I am expecting that the ARV would have to drop 10-15% with the issue, so maybe somebody would look at it as a steal?

Is this a deal-breaker in your eyes? 

Would a bank finance this for a buyer with a known issue?

Thank you for the inputs!

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John Teachout
  • Rental Property Investor
  • Concord, GA
3,256
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John Teachout
  • Rental Property Investor
  • Concord, GA
Replied

I'm not sure why they can't fully level the structure. 1.5" seems like a lot. I'd get a second opinion. There's lots of companies that do this type of work in your area.

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