How do you estimate structural and mold repairs before you put in an offer?

Question

So I have a few rehabs under my belt and I would like to bid on homes that other investors might be intimated by such as mold and structural issues.  How do you estimate these kind of repairs to put in an offer?  My thought for structural is to have a structural engineer come out or have a mold test completed.  However, by the time you have these things completed and pay the $400, someone else has already bid on the property and gotten under contract.   What is the best way to learn about these areas and get a close estimate to get under contract and then have a professional give me a real quote before closing.

George Gray · Answer

Karen M. and Ann Bellamy are 100% correct.  Get experts involved.  You can be walking into an expensive mine field and easily taken advantage of if you are not educated.  
The last fix and flip I did had a foundation settlement issue as evidenced by a large stair step crack in the exterior brick wall. Their was no evidence of settlement in the interior or the footings, so we didn't think it was a big deal.  When it became an appraisal issue on the resale, we talked with several foundation companies who all told us how terrible it was, and wanted between $5K-8K to sink piers under the walls. We then hired a structural engineer for $350 who said it did not need correction.  We had a brick mason repoint the bricks and put a copy of the engineers report on file with the realtor.  Total cost $850.  
Mold is going to be a bit more difficult, because it is a health and safety issue. Removing a lot of the drywall may be a more cost effective alternative to extensive dehumidification, air movement, and treatments.  You will also have to deal with HVAC ductwork and other components.  If you are working on a project that has heavy mold and water damage, be sure you cover yourself with documentation and insured contractors in the event you get sued.  
If I were going to target these types of properties I think I would start establishing relationships early. Make some phone calls and go visit some of the professionals.  Tell them what you do.  Ask them how they repair foundations or remediate mold.  Talk with an engineer and ask him/her to explain what the signs of serious foundation issues look like.  I have found most professional to be very forthcoming with information if you ask nicely.  Scour the internet and become knowledgeable.  Even if you never do one of these types of deals the education will be priceless.

Ann Bellamy · Answer

No one has addressed your structural question, because there are so many variables.  Soil, pests, tree roots, water, etc.  I'm not sure you can estimate that yourself without expert advice, unless you yourself gain the knowledge of structural issues and the underlying causes.

Happy to hear if someone has a conflicting opinion, because I'm looking at a deal now with structural issues.

Bill Gulley · Answer

Ann, you're right, many things can cause structural problems.

If you don't really know anything about construction,I'd suggest you begin my learning each element or part of a house, from the vapor barrier at the foundation to the ridge of the roof.  That you can find on the internet. After you know what a jack stud and lantel are used for, go look at some new construction. See what construction techniques are used and why. You could probably get a contractor and pay him for an hour tour, explaining how the different elements play on other parts and how loads are carried....hmmm, maybe two hours. You should have a rough idea of what to look for when you see cracks in the sheetrock above a door or in a corner or a sloping  floor.

When you get in over your head, call a professional and when getting a bid, have them explain what is wrong and how it will be repaired that can be as important as the price.

What you see is the result of the problem and usually not the problem.

Steve Babiak · Answer

I just had some "environmental issues" cleared up on a property.  I had made a measurement of the space involved, and I had a good idea of the nature of the problem.  Made a few phone calls to different environmental remediation companies, and described what I knew over the phone.  I even got ballpark numbers from them over the phone for the issue I had since it was a common thing for them to handle.

That's sort of a way to get a free ballpark estimate.  Some environmental remediation companies will come out and give free estimates as well.  But you want to have an idea of how they come up with their estimates, so that you understand how to get close when you see that sort of issue - and you probably won't have anything real for them to come out and measure ahead of time anyway.  Just make up a situation similar to something you found on MLS or Craigs list or some other online site and discuss.  Or ask them if they can describe a job that they may have just completed.

Karen Margrave · Answer

Ann Bellamy I'd say have a contractor go look at the house, because you are right, there's to many things that can be wrong. Sometimes things that look like they are major issues turn out not to be, and the littlest things turn into the biggest headaches.

In this market most contractors will give you a free estimate, hoping to get the job when you purchase. However; if you know you're not going to use them for the work, tell them upfront, and they can charge for the estimate.

Trey Pontious · Answer

Since Mold Remediation needs to be done by a Certified Mold Remediation Contractor it is difficult to price that. Look into your states requirements for mold and you may be able to learn how to bid accordingly.

How do you estimate structural and mold repairs before you put in an offer?

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