Potential first deal foundation issue / out of state

[Carly M.]

My husband and I are first time investors, we have a friend in Kansas City who is in the real estate game and says it's a great cash flow area. We flew out there last week and found a duplex in a decent area (edge of Waldo). The lady who owns it owns the whole street and]is selling 1/year. We wre hoping to buy the whole lot if this one works out well. 

We have an accepted offer in and We've found out there is "excessive lateral movement". They are having epoxy and i-beams installed. The realtor says KC is built on clay soil so it's not uncommon. It's listed for $140k which is a great price. My husband thinks this isn't a problem. It doesn't work well enough in the numbers for me to be on board with a foundation issue. The rents have not been raised since 2007, so we have room to raise rent. THis is the numbers with rent as is.

What do you guys think? We are first time investors and out of state, which also worries me. 

Thank You! 

[Kim Tucker]

In that area, a lot of properties have foundation problems, that often scare off buyers until one gets smart and spends about $180 to $300 on a structural inspection to find out the best way to fix the problem.  Then they get a great deal, make the needed repairs per structural engineer and have a great rental property for years.

Once upon a time an investor friend in Jackson MS showed us his latest deal.  we all thought cracks in the exterior walls large enough for a tree branch to grow through, you must be tearing it down, and no, this is a common problem in Jackson MS and they know how to fix it.

So if the numbers work, including paying for guaranteed repairs per the engineer specs, then go for it.  If they do not, the pass on to the next one.