Foundation issues: Run for the hills or repair it?

18 Replies

I'm looking to invest in my first property. One SFH I liked today has some foundation issues. I'm not sure of the extent yet but I have a foundation company coming to quote it tomorrow.

I don't have it under contract but should I even consider it? Everything I've read says "no".

Anyone have experience here?

Originally posted by @Clint G. :

I'm looking to invest in my first property. One SFH I liked today has some foundation issues. I'm not sure of the extent yet but I have a foundation company coming to quote it tomorrow.

I don't have it under contract but should I even consider it? Everything I've read says "no".

Anyone have experience here?

Not all foundation issues are alike. They can be fixed. Minor issues can be remedied under $1000, while some big ones may cost tens of thousands of dollars.  I would put the property under contract with 10 day due diligence period, during which you can get all the inspections done. 

The company may come and look around, and give you a ballpark quote or general idea, but I wouldn't expect an official report unless it's under contract.  

How long the property has been on the market, or is it off market deal. 

I would not run for the hills, but proceed w/ caution. 

@Chinmay J.

This one has been on the market for 155 days. Seller is offering 1100 credit to fix the issue so it's possible they've had someone look at it already.

I'm also worried about 20 years from now if I want to sell it if the issues will only get worse. I believe the house was built in the 80s.

From my perspective with goals of long-term buy and hold, foundation issues are one of the big ticket items that would make me walk away. So, if you don't include the cost of repair into your purchase analysis, big ticket items like that can kill your cash flow and destroy whatever budget you have for capital expenditures. 

Another issue you'll face is trying to sell the property. So, if it is bad now, and you don't do anything about it when you purchase, it'll only get worse and you'll take a hit when you try and sell the property. 

You also want to consider what the cause of the foundation issue is. If it is a bowing wall, for example, you may have hydrostatic pressure on the other wall, so putting a couple steel I beams up may just be a bandaid to the real waterproofing solution.

The last thing I'll say is consider the amount of damage repairing a foundation issue can cause to the rest of the property. If you have to replace a wall, for instance, using jacks to prop up the side of the building when the wall is removed can cause cracks throughout the drywall/structure on that entire side because the property can dramatically shift.

If you really like the property and you feel it is a good deal, use the foundation issue as a bargaining point so you may be able to get a discount.

Originally posted by @Clint G. :

@Chinmay J.

This one has been on the market for 155 days. Seller is offering 1100 credit to fix the issue so it's possible they've had someone look at it already.

I'm also worried about 20 years from now if I want to sell it if the issues will only get worse. I believe the house was built in the 80s.

 As and investor and realtor, I have dealt with many houses that were built way before 80s. (I reckon you mean 1980s and not 1880s). I would do due diligence. Have you talked to the listing agent to find out why the house has been on the market for so long? Are the issues that big that has scared seasoned investors away or is there something else going on here. If the house is rightly priced, and there are no issues with getting clear title, it should have been sold by now.  You really need to find why the house is on market for..hmmm half a yr now.. 

Please proceed w/ caution and with help of seasoned professionals. 

@Chinmay J.

I'm working with a realtor, and she didn't say why it's been on the market for so long. I suspect it's the foundation. I'll ask that question specifically.

Originally posted by @Clint G. :

@Chinmay J.

I'm working with a realtor, and she didn't say why it's been on the market for so long. I suspect it's the foundation. I'll ask that question specifically.

 No not your realtor. It needs to come from the listing agent, not selling agent. 

@Clint G. without any details on the damage, nobody can offer you accurate advice. I have purchased properties with foundation damage. In fact almost every property I ever bought had some damage. Usually it is minor cracks, which are mostly cosmetic. The big issues fall in three categories:

- Bowed wall which means leaning in or out. I have fixed this by having supports added to brace up the wall, which takes pressure off the leaning wall. The professionals would excavate and replace the wall. 

- Major cracks that leak. I have fixed these by patching with vinyl cement and painting the entire wall with multiple coats of water block. Sometimes professionals will do this and add interior drain tile that wicks any water from the wall.

- Settling so the property is lower at certain points. I have had this issue fixed by having professionals pin and jack the foundation. They have to dig up the entire foundation at the lift points. Very expensive and when I had it done, the property sunk back down a year later. It was a waste of $10K, because the sinking was probably just caused by the clay soil being dry those years. It was minor and no leaking.

The lesson I have learned is that bringing "professional foundation" people in to estimate work, usually means a high dollar estimate and maybe an overkill solution. Also keep in mind when an inspector says "foundation problem" that can mean anything from cosmetic to a building that is at risk of falling down. Foundation issues can be a nightmare, so get the facts.

@Joe Splitrock

I can tell you that it's cause a crack in a wall but that's all I can see. If I knew how to post pics in here I'd show you.

@Clint G. I'm not sure what its like where you are located, but where I am there is a Structural Engineer that does inspections for most homes with foundation issues in the area. I had him come out and inspect a property that I ended up buying. His inspection basically stated that the foundation issues on the property were all cosmetic and that didn't impact the property. This is stuff like cracks in the walls and ceiling, and cracks in the driveway. Apparently the soil in my area is famous for moving around causing a lot of foundation issues for homes. You'd have to search hard to find a driveway without cracks and uneven parts in my neighborhood, but its still a nice neighborhood.

I looked up a few homes that were comparable to this house that had sold withing the last 6 months on the same street. All sold for a price that works for me, and all had uneven driveways etc..

So in my mind I have a home that I got for a great deal, with a foundation inspection letter from the guy who is the subject matter expert engineer, and I know that most homes in the area are in the same boat as me. 

Only time will tell if I'll actually be able to sell it, so I can't call it a success story yet, but I feel good about it for the reasons listed. So I would say make an offer, get an inspection, and learn the area.

Good luck!

I know a guy that got a grest deal on a house with 2 basement walls bowed in , real bad .  He built a block wall around the furnace , busted up the concrete floor , and filled the basement with dirt . Made the basement a crawl space .  

@Aaron Millis

That's probably who I really need to look at it and put their stamp on it...a structural engineer. Depending on what the foundation guy says tomorrow I'll move forward with getting an engineer out there. Thanks!

@Clint G.

I’ve had to repair four out of my five Texas SFRs in the last 9 months. They all had cracks in the walls and doors were sticking. The average repair cost was 4k per house. Clay soil in Texas does this and seems like every house in the DFW area has or will have foundation problems at some point

It'll take about $4K to fix most of the foundation issues, like @John Morgan mentioned. 

However, watch out for the plumbing! If a foundation is lifted there is a chance that a pipe under the house may break. Usually it's a sewer pipe and there is no immediate effect. However, it has to be fixed and that may set you back another $5K or more easily. 

Foundation companies won't give you a warranty if there is any pipe damage but they won't pay to fix that damage even if they caused it.

@Nick B.

UPDATE

I spoke with one foundation guy today and got a quote for 7k for 20 steel/cement pillars around the outside edge of the house.

The current owner had two other quotes:

Quote 2 - 11 concrete pilings for 3.3k

Quote 3 - 30 concrete pilings for 11k

The one I spoke with said the pilings aren't as good as the steel/concrete pillars. He's been in business since 1987 with his dad being a structural engineer. Seemed trustworthy and came recommended from another investor in the area. Says it can be fixed and isn't as bad as a lot he has seen. Comes with 5 yr warranty.

Thoughts?

All of these foundation repairs are temporary. At some point they will have to be redone. The lifetime of the repairs depends on the amount of care you (or your tenant) apply to that foundation. It has to be watered regularly, holes in the ground have to be filled after the dirt settles,  etc.

If you don't do that, your warranty will likely to be voided. 

I doubt many tenants would follow the watering schedule and do extra yard work.

So, from a practical point of view I would go with the least expensive option but press the seller to give $11K repair credit for the most expensive one.

This will provide enough safety cushion for possible plumbing repairs. 

P.E. Civil Engineer here from Texas... Pictures please.  Also type of foundation (slab on grade, spread foundations, etc.), and age of the house.  I recommend a Professional Geotechnical Engineer opinion, or at least a Structural Engineer.  The son of a Structural Engineer may not have the same knowledge, just saying.  Also big factors are how may years the foundation have been in place and type of soil, when the first cracks where visible, and any propagation, recurrent issue, or cracks getting worst.   If the type of soil is a clay with lots of silt in it... that's most likely a big issue.  Silt will absorb moisture and likely expand (or contract depending its moisture content).  The soils with expansion/contraction susceptibility to moisture content (after running lab tests per ASTM standards), are usually called expansive soils.  

If you hear "expansive soils", then RUN FOR THE HILLS! 

I spoke with one foundation guy today and got a quote for 7k for 20 steel/cement pillars around the outside edge of the house.

The current owner had two other quotes:

Quote 2 - 11 concrete pilings for 3.3k

Quote 3 - 30 concrete pilings for 11k

The one I spoke with said the pilings aren't as good as the steel/concrete pillars. He's been in business since 1987 with his dad being a structural engineer. Seemed trustworthy and came recommended from another investor in the area. Says it can be fixed and isn't as bad as a lot he has seen. Comes with 5 yr warranty.

Thoughts?

This is the problem with foundation repair companies, they all have their own opinions on what you should do to fix the problem.  I would recommend getting a Structural Engineer's opinion on the foundation issues and have them provide a recommendation as to how many piers should be installed and then have your Foundation Companies bid the repairs based on the Structural Engineers recommendations.

Also, most reputable foundation companies will provide a Lifetime Transferable Warranty, so 5 years doesn't provide much peace of mind for you or the next owner!

@David Robertson

This is exactly what I'm planning to do should I move forward. Get the structural engineer out there to make the determination. Great advice...thanks!

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