Block Foundation w/ cracks and bowing walls

[Mark Baldwin]

Hi guys.  I'm from SoCal and in contract for my first deal - a 3 duplex package out in the mid-west.  The inspection report came back and the block foundation for two of the properties are in poor condition.  Some of the walls have substantial movement with considerable bowing occurring in several areas. There is also water/moisture build up throughout the subfloor as well.  I had a foundation engineer walk through and said it would be about $12k to place in several steel I-beams and carbon fiber reinforcement to maintain the integrity of the walls for both of these properties.  We're going back to the renegotiation table with the seller but my fear is they wont budge on the price, and if they do not, I'm left with a decision.  

I have a STRONG desire to close my first deal but I'm afraid that this may fog my decision.  I know the foundation is a big deal but these costs don't hurt my numbers too much.  All other mechanicals are in good condition too. Looking for guidance, advice, suggestions, past experience - anything that may help clear my head with the upcoming decision.  Thanks.

[Shari P.]

@Mark Baldwin

I think the walls can be fixed, but my thoughts are that there’s an underline issue, such as the high water table that is destroying the foundation. 12k doesn’t sound like much, but how much to dig out around each house to put French drains or sump pumps and where the water goes. 12k can turn into 60k very quickly. I personally think it would be too much initial

lost rental income, lost

time,

money. I personally wouldn’t mess with it. If mold is in those properties, there is a whole lot more cash out.