Need Help: Foundation Concerns on Apartment Building

[Jon Dorsey]

Need help from the vast knowledge in here. 

I found what looks to be a great property in terms of location and value add. I’m looking to put an offer down but there’s one concern, the foundation. 

It’s a small apartment complex in the heart of a thriving downtown area. It’s on the edge of a flood zone, naybe the 500 yr flood area. Management has left room to raise rents. Units need a little sprucing. 

The problem is the building seems to have a foundation issue. There’s “stepping” in the bricks, the balconies are showing rebar, and it just feels like it’s leaning slightly when inside. 

How should I approach this ahead of PSA?

- Get a rough estimate without spending money, if that’s possible, and reduce offer price or havevthe work done by current owners?

- Get it under contract and get a thorough inspection, then renigotiate?

- Other options?

I have not undertaken such a project but the upside is there and I want to learn what I don’t know. 

I understand that I won’t really know how it is until they start working on it. It could be as inspected or worse. 

Any knowledge, lessons learned, things to watch out for, etc would be appreciated. 

[Jon Dorsey]

Thanks for the advice. 

My takeaway is to make an offer without reducing potential costs, during diligence get a solid estimate, and then renegotiate deal.