Run Into a Foundation Issue - Please Help

[Misael Herrera Granados]

My rental property is on it's first month of lease. I've spent close to $30k renovating it, and it looks great! Numbers are great too, as of now. However, an issue arose that I haven't had with the property until just this month. I believe the foundation just happened to hit its tipping point this month, so the basement has started to have water seep in through the cracks. The tenant is obviously not happy about this as the basement currently has carpet. I foresee having to redo the electrical system at some in the next five years, and that's something I was prepared for, but the foundation starting to leak is not something I was prepared for.

I am not in the financial position to do foundation repairs at the moment. I'm already paying off $16k of debt for the repairs on this house, and a foundation sump pump will add AT LEAST another $10k to that debt. If I were to take out that loan to fix the foundation, it would take most of the remaining cashflow away since I'm already using part of it to pay off the $16k. This would leave me with very little cashflow to replenish the reserves for this house.

My question and what I need guidance with is: Would it be best at this point to just sell the house and possibly break even, or should I take the loan and bear the next three to five years of paying it off? The reason I don't want to sell is that I've spent 15 months renovating this place, and my mortgage rate is 5%, an interest rate that is unlikely to happen again for many years. 

[Tim Hall]

@Misael Herrera Granados get some quotes. Get an engineer in there first to see what the issue really is. It may just be a case of some guttering something simple and easy to fix. Get all the info first then start seeking quotes then and only then figure out what you want to do. Cheers

[Colleen F.]

@Misael Herrera Granados  I would lose the carpet regardless of what you do. After you do the sump pump (with several quotes) there are several types of flooring suitable for flooding that I would put down before carpet. You are also going to need to run a dehumidifier.  The longer you delay dealing with water with carpet down the more likely you are to have the dreaded mold issue. 

[Nicholas L.]

Get multiple quotes.  It doesn't seem like you know how much it will cost.

[Misael Herrera Granados]

Quote from @Rumen Mladenov:

I bought several houses with finished basements. All the ones with drywall/carpet got ripped out and left unfinished - it is just a disaster waiting to happen. The only finished basement I left alone was done with solid wood plank walls and vinyl floors. 

My leases state that "the lease does not guarantee dry basement". Take it or leave it. So far, no one has backed out of signing a lease because of it... And if there is water intrusion, I just point to the lease they signed, and advise them to go to their renter's insurance for anything they stored that got damaged by water. You don't have renter's insurance? That's on you, not me - my property insurance does not cover tenants' belongings.

 This is genius! I'll make sure in the next lease to add that in. On the renter's insurance, I also make it a requirement, I won't be covering their losses. 

[Misael Herrera Granados]

Quote from @Kevin Sobilo:

Quote from @Chris Seveney:

@Misael Herrera Granados

Installing a sump pump may or may not work as typically under a slab you have stone and drainage pipe going to the sump pump around the basement perimeter

Make sure this works

Also it should not be $10k to install btw. That seems excessive.

I think you're right that a simple sump pit shouldn't cost anywhere near $10k, but that could be more in-line if they are doing a perimeter drain system cutting the slab all around the perimeter of the basement to bring water to a sump pit. 

 That's correct! The $10k estimate is for the sump pump installation as well as cutting the slab all around the perimeter. 

[Rick Albert]

You are paying for it either way.

If you sell, you will likely have to disclose the issue and the next buyer is going to want you to pay for it. Yes it wouldn't be debt but the money is still likely lost. Also check with a local lender and it may get called out as a health and safety issue and a lender may want it fixed prior to closing. 

If you can afford it, I would find a way to fix it and keep the property. As rents rise, you can offset the debt. This is assuming you have the means to afford it.

[Marcus Auerbach]

@Misael Herrera Granados Don't sell it. Find out where the water is comming from, 9 out of 10 times it is unmanaged surface water. 

Check your gutters during heavy rain, they might be overflowing because they are full of leaves, clogged or otherwise damaged. Next check your downspouts. Stick a gardenhose in the extension and see where the water goes. Obviously you want it to not pool at the spot or even flow towards the house, you want to see a clear movement away from the house. Best practice is to connect all your downspouts to burried 4" PVC pipes and run them to a low spot in the front or back yard.

You can DIY this 

   We have finished basements in most of our properties, but they are also from the 1960s and have sump pumps, however we still get a damp spot once in a while and therefor use commercial carpt tile with an open back (not a rubber back) so the water can evaporate from the concrete. It is rated for indoor/outdoor use and designed to get wet. Obviosuly there is no pad underneeth, NEVER put carpet PAD in a basement!! It will hold water and never dry out.

[Melissa Robbins]

@Misael Herrera Granados - I am dealing with the same issue right now on a house I bought last year in Waldo. Ugh!  I feel compelled to reach out when I saw your post as I can understand your frustration. 

I'll send you a DM so we can connect and I'm happy to share more info but wanted to say on this thread - don't sell. You will make your money back and then some and you may regret selling. And you have a decent rate which is good. Take the time to mitigate the drainage issue now because that part is not as expensive. I made some initial mistakes in how I tried to fix the drainage issue and wasted money, then I hired a structural engineer to come out and give me an assessment and it was the best $500 I've spent. I will not buy another old house without his input.

I'll DM you with more info!  

[Melissa Robbins]

I would also add for the benefit of other readers that a sump pump doesn't solve the drainage issue. You want to remove the ability for water to seep in under the foundation. The sump pump is an expensive bandaid. Others in this thread have commented about focusing on gutters, proper downspouts, and building up dirt around your foundation.

[Becca F.]

@Misael Herrera Granados

I'm following this thread since I just closed on a home In Indianapolis with a basement. My other 2 Indy homes don't have basements.  I can't say if you should sell or not sell. If you do decide to sell and can hold off until March, otherwise you're selling from a position of desperation since it's winter time. That also gives you a little more time to re-evaluate. You've received some great advice above with the downspouts and gutters and the sump pump.

[Milton Chamberlain]

Hi Misael,

I have sold a handful of 100+ year old homes with stone foundations. Water intrusion comes with the territory, but up through the floor is newer for me. I would do the no-brainer basics (check out gutters during the next heavy rain to make sure no excessive dumping due to leaks or clogs) plus then extend down spouts/improve grading...depending on the lay of the land around you, maybe a French drain? But these are all just guesses...If you google 'Bob Quick foundation', he is a great non-biased 3rd party structural engineer in KC who can give you an accurate diagnosis...cheap date too at $200 (last I checked). calling him would be the first thing I do. If you then need some actual work (Bob Quick doesn't do any actual repairs) google 'John Norris foundation repair,' he's a reputable fella who does great foundation work..might be a good resource for you.

Other than that, If I were you, I would clear out the basement and let future tenants know that it is not livable, and build some storage racks so they can still have some use out of it. Maybe reduce rent $ if necessary to get it rented.

There are great tenants willing to overlook 'less than desirable' aspects like water in the basement if the price is right (10-20% cheaper than an equivalent property market rent value), Particularly if it is in a desirable area.

If its just annoying wet ground, I would probably just leave it as is and bandaid as much as I could...If its deep (standing water); I sold an OLD stone foundation victorian WAYYY up North (Where (TRIVIA QUESTION!) that coward assassin of Jesse James was born) that had a weird sewer line issue that was going to cost a fortune to fix and would have heavily involved the cities cooperation, so my seller's solution was two powerful sump pumps that would clear out the standing water (*yech!*) in under a minute. and homeowners just lived with it and used the basement for storage with hanging shelving.

Feel free to reach out to me with any future KCRE related questions

[Jonathan R McLaughlin]

Sump pump + carpet= no bueno

I like the idea of taking it all out. Not sure what is down there or how they use it but I like the persons suggestion for elevated storage racks. Maybe some pallets and temp walkways and put a washer/dryer down there if the space allows.

Cheapsest immediate fix would be to diagnose, say you are going to change it, offer an appropriate discount for the loss of whatever amenity it is and with new lease just use as storage or as above

[Misael Herrera Granados]

Quote from @Marcus Auerbach:

@Misael Herrera Granados Don't sell it. Find out where the water is comming from, 9 out of 10 times it is unmanaged surface water. 

Check your gutters during heavy rain, they might be overflowing because they are full of leaves, clogged or otherwise damaged. Next check your downspouts. Stick a gardenhose in the extension and see where the water goes. Obviously you want it to not pool at the spot or even flow towards the house, you want to see a clear movement away from the house. Best practice is to connect all your downspouts to burried 4" PVC pipes and run them to a low spot in the front or back yard.

You can DIY this 

   We have finished basements in most of our properties, but they are also from the 1960s and have sump pumps, however we still get a damp spot once in a while and therefor use commercial carpt tile with an open back (not a rubber back) so the water can evaporate from the concrete. It is rated for indoor/outdoor use and designed to get wet. Obviosuly there is no pad underneeth, NEVER put carpet PAD in a basement!! It will hold water and never dry out.

 This is GREAT advice! Very practical too. I'll have to check the downspouts. For the carpet tile, do you use adhesive to stick them to the ground?

[Misael Herrera Granados]

Quote from @Melissa Robbins:

I would also add for the benefit of other readers that a sump pump doesn't solve the drainage issue. You want to remove the ability for water to seep in under the foundation. The sump pump is an expensive bandaid. Others in this thread have commented about focusing on gutters, proper downspouts, and building up dirt around your foundation.

 @Melissa Robbins, thank you very much! I apologize for the delayed reply but I just connected with you. My plan is to fix this, but I want to make sure I fix it correctly so I'm happy to hear about how you fixed the issue. Would you be open to refer me to the structural engineer you hired?

[Melissa Robbins]

Yes! I will DM you with the info. I had a french drain and foundation wall braces installed just today so I will share info on that vendor as well. 

[James Mc Ree]

There's great advice on gutters and grading above for your own stormwater. Also, check for stormwater management on the property as a whole. Is the water running towards your home, such as running from the road, down your driveway and into your yard, for example? That could be a source of your water as well.

Check your seller's disclosure. It should state the seller was aware of a wet basement if the seller held the property for several years unless this storm was one of those 1-in-100 year storms that happens every few years now. You might have a legal option if the water issue was known and not disclosed. It would be strange for someone to spend the money to finish the basement, knowing it would get wet.

[Melissa Robbins]

For the benefit of the BP community, I highly recommend Norton and Schmidt Consulting Engineers for structural reviews. They were worth every penny and I will not buy an older home again without having one of them provide a review. 

[Marcus Auerbach]

Quote from @Misael Herrera Granados:

Quote from @Marcus Auerbach:

@Misael Herrera Granados Don't sell it. Find out where the water is comming from, 9 out of 10 times it is unmanaged surface water. 

Check your gutters during heavy rain, they might be overflowing because they are full of leaves, clogged or otherwise damaged. Next check your downspouts. Stick a gardenhose in the extension and see where the water goes. Obviously you want it to not pool at the spot or even flow towards the house, you want to see a clear movement away from the house. Best practice is to connect all your downspouts to burried 4" PVC pipes and run them to a low spot in the front or back yard.

You can DIY this 

   We have finished basements in most of our properties, but they are also from the 1960s and have sump pumps, however we still get a damp spot once in a while and therefor use commercial carpt tile with an open back (not a rubber back) so the water can evaporate from the concrete. It is rated for indoor/outdoor use and designed to get wet. Obviosuly there is no pad underneeth, NEVER put carpet PAD in a basement!! It will hold water and never dry out.

 This is GREAT advice! Very practical too. I'll have to check the downspouts. For the carpet tile, do you use adhesive to stick them to the ground?

 Yes, they are sticky. We always keep an extra box at the property for future replacement.

[Beck H.]

Quote from @Tim Hall:

@Misael Herrera Granados get some quotes. Get an engineer in there first to see what the issue really is. It may just be a case of some guttering something simple and easy to fix. Get all the info first then start seeking quotes then and only then figure out what you want to do. Cheers

 That's a good point.  I have some foundations things looming and had a gutter guy come, and a foundation guy, and I feel like I'm going to give the gutters a try because the downspouts aren't going 7 feet from the foundation, the gutters are leaking in some places, etc.

It's going to cost about 2.5k to get them done, but better than the sump pump quotes!