Would cracking in foundation be a deal breaker for you?

Question

My realtor sent me a video of the walk thru. (remote investor) Its a 1500sq foot duplex. Early 1900 build. One side occupied one vacant. Property needs all new everything. Was originally budgeting 60k for rehab. Upon initial walk thru the vacant side basement has lots of cracking. Each wall pretty much has either, vertical, horizontal or diagonal cracking. Some parts of the foundation are showing daylight. But hard to see if theres any bowing occurring. Realtor suggested 10k budget for foundation. Not able to view occupied side unless under contract.

I would of course get a structural engineer during my inspection period, and this could be a great discounted deal. But I am a novice. And do feel that 10k wont be enough for this. Not sure if I should pursue this.

Michael Evans · Answer

Would you get a quote from the same realtor for a heart problem? Then don't listen to a sales person about a structural problem. I'm a licensed general contractor and I can tell you from experience that $10k won't touch the foundation problem you are describing. The structural engineer will need to do repair details and drawings and ONLY then you get estimates from foundation repair specialist before you proceed.

You might double that estimate and then make an offer just to get it under contract. But make sure the contract is contingent on the repair cost amount.

Good luck!

You might double that estimate and then make an offer just to get it under contract. But make sure the contract is contingent on the repair cost amount.

Good luck!

Kenny Smith · Answer

@Gurjot Grewal

I would look at a comparable property that doesn't have foundational issues and based off the discount, figure out is the juice worth the squeeze?  Are there other properties you find that don't have this issues where the numbers make sense as well?

Personally, I would stay away, but that's just me.  I'd rather not deal with the headache.  Also, how long would a project like that take?  Along with the cost, time will cost you money as well as you won't be renting it.  Everything has its price though..just make sure to take all of the extra steps to make sure you're protected if you do move forward with it.

Best of luck!

Martin M. · Answer

@Gurjot Grewal

True horizontal cracks are typically considered much more serious than vertical, diagonal etc, because the property could be shifting on itself rather than sections of the property being pushed around by its bordering elements, soil etc

BUT there's a lot of factors to it though as far as how serious horizontal cracks are... the length of the cracks etc..

Sounds like you definitely want a structural engineer to take a look at this. They might be able to tell you just from the pictures whether or not you'd even bother with an in person inspection, i.e. if they determine the cracks are bad enough just from the pictures, they may tell you to walk away without even bothering with an in person inspection. Or they may say the cracks are minor and nothing to worry about. Either way, when in doubt, call in an expert

Bud Gaffney · Answer

@Gurjot Grewal Yes. Move on to the next deal

Jaron Walling · Answer

I agree with @Eliott Elias. Tough to sell a property like this which is why it's still for sale. Get a specialist in there for a realistic quote and run the numbers again. Then make a offer based on the rehab budget. Could be a value add situation if you install an egress window and add a room! Could command more rent $$$.

Cracks showing daylight = not cheap.

Eliott Elias · Answer

Nothing is a deal breaker for me, everything has a price and you should take the opportunity to negotiate.

Mike Hasson · Answer

While Foundation issues can be serious, not all cracks are the same. I'd look closer at the causes if the damage, if any past repairs have been done, and/or the causes have been dealt with, age of the hone, construction materials, etc.

But in general, some examples could be poor exterior grading, soil types, issues with gutters or drainage, freezing/thaw cycles, poor construction, deteriorated components to name a few. As you can imagine all of these can vary in severity and complexity to deal with.

Repairs can also vary widely. I'd be wary of any proposed solutions that do not also address the root cause.

Tommy Adeoye · Answer

It sounds like the property you are considering has some significant foundation issues, which can be a major concern for any real estate investor. While a structural engineer during your inspection period would be a good idea, it's likely that the 10k budget for foundation repairs will not be enough to address the issues you've described.

It's important to keep in mind that foundation repairs can be costly and time-consuming. If the foundation issues are severe, it could potentially delay the project, and add additional costs to your rehab budget.

It's also worth considering the fact that you won't be able to view the occupied side of the duplex unless you are under contract, which could mean that there may be additional issues that are not currently visible.Given the potential costs and unknowns involved with this property, it may be wise to proceed with caution. It could be a great discounted deal if the foundation issues are not as severe as it seems, but it is also possible that it could end up costing you more than you bargained for.In summary, It's a good idea to get a Structural Engineer to look at the property, and get a detailed report on the foundation issues and estimated cost of repairs. Based on that you can decide if it's worth pursuing or not. It's always good to have a contingency plan in case the foundation repairs end up being more extensive than anticipated.

Would cracking in foundation be a deal breaker for you?

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