Duplex with slanted floors and foundation problems

[Michelle Payne]

Hi all,

I am looking for an investment property and found one I initially really liked. The inspection revealed sloping floors, cracks in the foundation (about 10), and roof repairs needed. The building also needs tuckpointing throughout. The inspector thought it would need to be piered and that would cost between 10-20k. The building is priced about 20k below what I expected it to be. I’m scared to proceed due to the slanted floors and foundation problems. The place is a top-bottom 1 bed/1 bath duplex that is for sale by owner in a good area which is currently cash flowing about 300-400/month. The building is 100 years old. Some of my greatest concerns are that it seems the seller hasn’t been forthright with us in discussions. He claimed the foundation is sound and they poured a new concrete floor, but our inspector didn’t believe pouring a concrete basement was enough, he also claimed to have put a new roof on but it was just patched. 

Would you run or try to negotiate on this one?

[Mike McCarthy]

Foundation issues are one of those issues that it’s worth considering your expertise with REI.

If a roof needs to be replaced, you call any one of the 50 local roofers and get it replaced within a week for $xxx

Foundations often require more work to find the right kind of foundation expert (one will solve it for $40K, another for $8K and one who will screw everything up for $14K). Plus you might need an engineer and permits, fixing other related issues with cracked walls, crooked doors, etc etc.

It’s not something I’d want to dive into unless you have some experience with dealing with contractors, and have some financial padding in case things are even worse than you think they are.

It’s not a reason to run away screaming... but definitely consider if there’s an ‘easier’ investment out there.