Post and beam foundation

[Kalyanii K.]

I'm looking at a 4 plex that is distressed with post and beam foundation.  I've heard that some lenders don't want to lend to units with post and beam foundation.  Has this been anyone else's experience?

[Jeff S.]

Some years ago we were asked to loan on a property where a relatively large local hard money lender bailed out at the last minute before closing. It's actually quite frequent but the reason, in this case, was that they didn't realize the garage wasn't attached to the house. Apparently, they don't make those loans (?!?!?). Of course, we didn't care any more than most every other lender in the universe would care – and we earned a new borrower.

Don't assume, @Kalyanii K. , that because you heard particular repairs will scare some lenders, that they will scare all lenders. If so, you'll only look at paint and carpet flips and there is relatively little money in those as well as a lot of competition.

Distressed foundations, floods, mold, fire/smoke, etc., will scare some lenders and much of your competition to buy. Anything can be fixed with enough money. Your job is to buy well enough and to find lenders and contractors capable of attacking these issues at a profit.

If your deal is viable and otherwise makes sense, you could bring in a foundation company or structural engineer to assess the required repairs. Unless they say the property is a total loss, which is unlikely, you adjust your numbers accordingly and move from there. Same with the taxes. I bet there are plenty of lenders that will understand this.