First Deal! Potential Foundation Problem. HELP!

[Travis Glenn]

Hello All,

So 4 days ago I as able to get my first real estate deal under contract in Spring, TX! I'm super exited to finally be taking that fist step into the world of real estate investing and was initially very optimistic about this first deal. However, after getting the house inspected, the inspector recommended I get a foundation expert to look at the house. This was because he found some significant differences in grades in certain rooms in the house.

After having a foundation company look at the foundation, this is what they found and proposed...

As you can see in the diagram, there are several signs that the house has settled (several cracks repaired, expansion joint separation, door misaligned, etc...). Foundation expert recommended 15 piers be put in place and the house raised back up which would total up to roughly $7000.

Now, I have very little experience with this sort of thing and didn't want to make a decision based solely off the foundation companies opinion because, unsurprisingly, they feel I should repair it immediately. So I started asking around to friends (of whom have no investing or construction experience, but have bought houses in the area), and their advice generally was to just ask the sellers to pay for the foundation repair. BUT, for good measure, I also contacted an experienced builder (not located in the Houston area) and he said, for various reasons, to either deduct the max costs you might need for the repairs from your offer, or walk away. He felt very strongly I should not get the foundation repaired at all because, in his opinion, foundations can't truly be repaired.

I was tending towards the experienced builder's advice, but wanted to see if anyone in this area has had a similar experience and/or could offer me any advice.  So my question is does anyone have experience with this in North Houston/Spring/The Woodlands and can you give me any advice as to what I need to do? Any help is greatly appreciated!

[Sharon Tzib]

Travis, I always tell my clients that in Houston, it's not a question of if you will get a foundation issue, but when. The good news is, because it is such a common problem due to our clay-based soil expanding and contracting with the rains and heat, it's a pretty competitive field. Your estimate seems really high to me. I just got a quote for 18 piers for $5400, lifetime warranty from http://levelcheckfoundation.com/, whom I highly recommend as being very honest and reliable.

You should always try to get the seller to either do the work and/or credit you the cost at closing for the whole amount, but in this strong seller's market, that can be very hard to do, especially if they have a back-up offer in the wings, which many smart sellers do. So then it's a function of your numbers. Does the deal still work if you have to pay for any or all of it. I would definitely use the higher estimate to negotiate with, as well, but if it comes down to you having to cover some or all of the cost, then at least you should have 2-3 estimates to determine how economically and proficiently it can be done.

Foundation issues can be very scary, and I have had a handful of buyers walk away from a deal because of it; but I've had more continue on because they know it is a crap shoot trying to find any property that is immune from this issue in Houston. Hopefully this is helpful. Good luck with whatever you decide.