Foundation Problems on Long-term Buy and Hold

14 Replies | Houston, Texas

I have a potential deal on an SFR for long-term hold however I think there might be foundation issues. The house was built in the early 70s so at that age foundation problems are likely. HCAD also has given it a building grade adjustment of C+. One of my take-aways from Vijai's wonderful and educational walk-through a couple of weeks ago was to be wary of foundation issues. For long-term buy and hold, would you take on a house that has foundation issues?

Nothing wrong with doing foundations.  Figure it into your budget and do the deal.  This is Houston, tons of houses have foundation issues.  Fix it now rather than later even if a buy and hold.

A properly repaired foundation is better that not if they are putting pillars in. Visualize digging your fingers in the ground, it grabs hold. There is so much clay in much of the city that foundations just move. It is normal. If all thing are equal on two houses I would choose the foundation with pillars as opposed to no pillars.

Get a quote and ask the seller to fix it. If they won't, take it off the purchase price or create an escrow at closing to have it repaired. All this depends how strong you come in on the offer in the first place. Get the deal done, do an inspection with estimates, adjust the contract. 

And for the record, if you’re listening to someone who’s telling you to avoid houses that have foundation issues, you’re learning from a rookie!  Foundations are nothing and easy to fix.  Retail buyers buy them as well.  This is Houston, 70% of houses have foundation issues anyways!  

Yep! Homes in Houston built in the 70’s...pretty much gonna deal with foundation issues. I dealt with several. It’s straight forward. One property did have more severe issues that altered the roof line and waste water plumbing. Not sure I’d chase those. But turned out to be a great property.

As people say in Houston, it's not if a house will have foundation issues but when!
First house I ever bought (built in 2001) ended up having foundation issues. I work as a structural engineer for a company and we do some foundation assessment from time to time. As everyone mentioned here, it happens a lot, recent house, old house, age does not mean a thing!

If you think that a house might have foundation issues, just get a few foundation companies to come and take a look at it!

What do you guys see as a general price point for foundations? I was looking at a house with foundation issues (pier and beam) and spoke with several companies. The general consensus was that for a 3/2 or 4/2 SFR home, 8k was fairly common while anything pushing 15-20k was not very common.

The house I was interested in had a bid for 7500 but also 18k, so I'd be curious where the difference was.  This was on a pier and beam house at 2300 sq ft.

Thank you all for the replies!  I have a trusted foundation company that I've worked with in the past so I'll have them come out, take a look, and work their bid into my numbers.

Ben, I believe the differential in price is based on the type of repair and often on the warranty the foundation company will offer.  Some companies will offer a warranty that may be assigned to future home owners.  Great for marketing a flip!  These companies will often have a third party engineer ensure that the plan is good and they'll test before and after to make sure the house was leveled according to the plan.  Also they'll run a static water test or scope the plumbing to make sure that the pipes didn't crack due to the movement of the house.  

A friend of mine just sold one of his rent houses with a repaired foundation, it sold for over market price. So, don't be scared away, make sure you find a reputable foundation company that backs their warranty.

Not all foundations are the same.
Beam, Post tension, driving piling, bell bottom, floating, pier and beam...

Make sure you have a foundation company that is proficient at the type of project you have.

I am no rookie, and I have had major issues with 3 (BBB accredited) business's this year who claimed to be experts in foundation work. 

Check past work, for the type of slab or foundation you have.

@Rusha Jayasuriya You shouldn't stay away from the property just because of foundation issue. It all depends on how big is the issue and whether it's been addressed properly. There is saying about foundation issue in Houston, "In Houston, there is only houses with foundation already happened or it is yet to happen". So all homes are prone to foundation issue in their life time in Houston area. It's up to you on how much risk you want to absorb and for how long and come out positive. 

Thank you @Vijaianand Thirunageswaram!  Your insight, as usual, is on point and appreciated.  I'm so thankful for this forum and all the wonderful advice y'all continue to provide.  I've factored the estimated cost of repairs into my numbers and gave the seller my offer.  It was rejected so I'm onto finding my  next deal!