Foundation can't be perfectly fixed?

Question

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!

John Teachout · Answer

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.

Kyle Jones · Answer

@Victor S. Lifetime on all of the work they do, and a 2 yr on the rest.

Will Barnard · Answer

Sounds like you found your answer. For future reference, on any major rehab item, get multiple bids, this allows you to see viewpoints from not just one but multiple professionals and allies you to choose between price, speed, and quality of each sub contractor plus their personal skills like communication, organization, friendliness, etc.

John Teachout · Answer

Congrats on your first deal. Let us know how it turns out.

Kyle Jones · Answer

@John Teachout Thank you for that advice, I did just that and found a better company that will get it within code and do it for $1500 less! We had our offer on the house accepted this week, we close at the end of the month! This will be deal #1 for my wife & I, excited to finally get our hands dirty!

Sean McDonnell · Answer

Maybe try getting a general contractor to inspect it and determine if the foundation will be stable once repaired as best as it can. Then ask them to write a letter that you could show to potential buyers when you are ready to sell it to ease their concerns.

We had a similar issue with a foundation crack. Not as big as yours but a certified letter from a professional will go a long way.

Victor S. · Answer

What warranty do the new guys offer? I've seen lifetime here in OK before. That would def. ease any buyer concerns, especially if the Co. has been in business for a long time.

Greg Dickerson · Answer

Would need more info like total renovation costs and more descriptive info on the issue to advise.

Foundation can't be perfectly fixed?

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