Foundation issues: Is this a good investment?

Question

Hello.  I would like your feedback on a opportunity from a wholesaler.  The house is in a good location.  It built 1950s, 987 sq ft. It is a 2x1 but has potential for a 2nd bath.  The issue is the framed house is bowing inward slightly, so foundation issues is definite.  This is not a slab foundation.  Some of the boards under floor are are rotten, which I think that is why the house is leaning inwards.  ARV is $110,000 and I'm going to offer $28,000, which gives me $40,000 for rehabb.  The house has not been livable for a while so an whole gut job. I want initiate Brrrr strategy, but I have not dealt with foundation before.  I'm thinking 8,000 for foundation plus whole rehabb. Does the numbers sound realistic? Advice please. :)

Bruce Woodruff · Answer

Foundation could be more, way more....what if it needs a complete new substructure? I'd get a GC or Foundation Contr to give it a look before you offer...

Justin Robert · Answer

Account Closed $8K sounds realistic on a house of that size assuming there is access and room to work.

You can likely do a budget rehab including foundation work on a house of that square footage for $40K in South Texas. I just leveled and raised a 1,000 sq ft home in Central Texas for $6K. It took a crew of guys a Saturday to do it. This included new 4x6 beams and we raised the house a total of 8 inches to allow for access for the remodel and future crawlspace access. I will probably spend $55,000 on this home when all is said and done and will be pretty much totally new with the exception of things like siding, a few interior doors, etc...

Since this is your first go, $40k could spiral much higher if you aren't careful. Things like trim, doors, cabinets, etc... really add up once you get past the obvious major systems and mechanicals.

Word of advice - don't trust any numbers from the wholesaler. I am not saying they are being dishonest on purposes but most don't have any idea on rehab costs.

Best of luck!

Account Closed · Answer

@Caleb Brown I appreciate the advise. I need to get more professionals on my team. I am getting free estimates on foundation.  They will send engineer to give me advise.

Angel Dejesus · Answer

@Ray Juarez

Personally I don’t invest in properties with foundation issues.

This is risk vs reward. How fast are you going to make your money back if you rehab considering a GC estimate is accurate.

If you buy right then it might be good to do the foundation. It all depends on your Margin of safety.

But taking on projects is what’s it all about. This is better then new construction which takes years and delays and inspector and contractor headaches.

Hope that helps.

Good luck.

Jesse Reynoso · Answer

@Ray Juarez

Hey Ray

A sagging foundation could mean some wood girders under house need replacing. As long as the concrete doesn't have major cracks you should be ok. We have lifted many homes and added addition piers under the house to level thing out. Just remember when lifting and leveling out you will get cracks in the walls and ceilings.  Have a good look at all the concrete foundation and put a level on floors and walls to see how off they are. It doesn't sound as bad as it seems. Good luck

Caleb Brown · Answer

With the walls I don't think 40K will cut it. I could see the rehab going around 60K. Get bids locally, walk through it with professionals. Having a team with a solid GC can help you out so much rather than asking on BP or winging it

JD Martin · Answer

So it's either a crawlspace or a basement foundation. Poured concrete or concrete block? When you say the house is bowing inward slightly, are you talking one wall or all the walls, which would suggest the blocks or concrete wall moved at some point. Is this a recent development? Should be obvious by cracking in drywall, hard to open windows/doors, etc.

The house shouldn't be leaning inwards from the outer walls unless the walls have shifted. Even if floor joists are rotted, what you would have is sags in the floor.

Account Closed · Answer

@Maurice D. The lot is 4978 sq ft.  There are rehabbed homes on street, and a few new homes.  I was thinking about doing that also, just rebuild.  It's a good location to consider.  Thanks for your thoughts.

Account Closed · Answer

@Bruce Woodruff what d you mean by stem walls? The outer corners?

Account Closed · Answer

@Bruce Woodruff. I appreciate the advice.  I'm getting engineering to look at it.

Foundation issues: Is this a good investment?

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