All Forum Posts by: Elena S.

@Susan Tan

Thank you for sharing, I sent you a DM.

@Don English

Yes, I'm getting a free estimate tomorrow. I'll post an update once I know how much it is.

@Dallas Hayden 

Thank you so much for all the advice. One of the leases is month to month, the other one is until November. I will budget having to pay for their hotel stay if necessary. Termite inspection came back clean. I'm not planning on replacing the structural bricks. I don't know for sure if the basement blocks are filled with concrete and rebar, there is no way to access them. Probably no rebar, though. The foundation repair companies I spoke with are suggesting bolting beams against the affected wall to prevent any further wall movement.

@Cody Neumann I'm getting an estimate from a foundation repair company on Friday. One of the remedies that I'm looking into is steel beam support for the interior of the basement with a 50 foot section of the basement costing $12,000. The entire perimeter of the basement will cost about $30,000. 

@Dallas Hayden the 4-plex is 2 stories above ground plus the basement below ground. The basement is composed of concrete block topped with common brick above ground level into wood framing. The basement is 8 feet tall. 6 foot easement between the property and the 2 neighboring houses (to the left and in the back); 15 foot easement from the front exterior of the house to the street and the neighboring house on the right. The root cause of the foundation problems is possibly the expansive clay soil. There is a lot of water intrusion into the basement in heavy rain. I really appreciate your expert advice!

@Will Gaston Thank you for the advice. I'm actually working with my lender right now to see if I can switch to a different loan that will allow me to wrap repair costs into the loan. It all depends if his investors agree to it, though.

I have a 4-plex under contract in Kentucky. Inspection revealed major issues with the property, some of which were not disclosed: evidence of foundation problem (stair-step and horizontal cracks, bowing towards the inside of the basement, uneven floors in units); basement leaks, roof leaks, 1 furnace is putting out carbon monoxide and needs to be repaired, etc. The Seller came down in price slightly and said he is not going to do any repairs. The property is in a B-class neighborhood, built in 1920s. 2 of the 4 units are rented. Property manager doesn’t think it will be a problem to fill the other 2 units once they are rent-ready. Numbers are below:

Discounted purchase price: $182,000

Rent: $2,600  ($660 and $660 for occupied units, projecting at least $640 for each vacant unit)

Mortgage: $623

Property taxes: $231

Insurance: $171

Property Management 9%: $234

Reserves 20% (repairs, CapEx, vacancies): $520

Trash bill: $50 (tenants pay all other utilities)

Cash Flow: $771

Down payment: $45,500

Closing costs: $8,000 (verified)

Repairs: $40,000

Total cash invested: $93,500

Cash on cash return: 10%.

My goal with this property is long-term hold for cash flow. I prefer cash on cash return in double digits around 15%. I have no experience with foundation repairs.

What would you do? Should I walk away? The only money I’m losing at this point is for the inspection.