All Forum Posts by: Gary Landon

If you have a friend or know a structural engineer he may be able to help you out with the fix.  It may not be as bad as it looks at first glance.  If you can add a couple of posts that may solve your problem.  It is hard to tell without seeing it in person.

Bryan

Great advice.  Structural engineers do not come cheap.  If you do have a friend that is a structural engineer he should be able to tell you what can be stored safely.

Your inspector may be able to point out potential structural problems which could be verify expensive to fix.  If you do suspect a problem and are still interested in the property hire a licensed structural engineer that is experienced in residential construction.  He will be able to tell you if it is structural or cosmetic.  Also he should be able to give you an idea of what it will cost to fix.

Jay, Thanks for the information.  To protect the end buyer, will the lender accept payment directly and then pay the seller?  I guess it would depend on the lender and if there was a due on sale clause. However if done properly, this seems like it could be a win win situation.

I believe it said that the house cost $20,000 but he had $0 of his own money invested.  I assume that there is another loan out in this example?

In the chapter “The Rich Invent Money”, he gives an example of buying a house for $20,000 and selling it on a note for $60,000. I assume he has a mortgage from a lender for the $20,000. My question is how does the note work with the mortgage?Do the buyers pay him on the note and he pays the lender and who actually owns the property?

You mentioned that you have a couple of structural engineers on your team.  That is great to have professionals that are knowable with the soil conditions in your area.  This can  give you a completive advantage and assurance that you know what you are getting into.  As you know, foundation work can run into tens of thousands of dollars. Settlement can also cause damage to water lines, sewer lines, gas and electric, and other utilities that are running under the foundation.  

I believe the asking price is over market value. I estimate it will take about $40K to renovate the house. At this I would have to offer less than half the asking price. Do you think an REO would even consider this?

There are several REO Properties in my area that are for sell. From my observations driving around, houses are not selling fast. Some have been on the market for a year or more.

My question is what is and REO property and can they be purchased at a reasonable price to be able to flip?

As several have suggested, you will need to determine the exact nature of the code violation.Hopefully it is not a structural issue.As a structural engineer I have experience with evaluating structural damage and it can be quite expensive. How old are the buildings and did you see any obvious problems? Few residential buildings will have structural problems especially six in a row as you have described.

Although few houses experience structural problems, when it is a structural problem that needs to be fixed it can be expensive. The problem can range from minor cracking in walls and ceilings to major distress caused by excessive foundation settlement. Also, depending on your location, the structure may have not been designed and constructed according to code requirement for wind or seismic forces. Depending on the problem, the cost to design and repair a structural issue can range from a couple of thousand dollars to over tens of thousands of dollar.I am currently involved with the structural repairs of a large condominium that is going to run in the hundreds of thousands of dollars.

If the code violation does turn out to be structural, you will need to hire a professional structural engineer licensed in you State to come up with a repair design.Most home inspectors are not professional engineers and most building officials will not accept their repair recommendations. The engineer will design a repair to meet code requirements.A licensed contractor will need to construct the repairs designed by the engineer

Don’t let this keep you from evaluating the purchase, unless it is to the point where it is better to tear it down and start over.You will need to consider this cost in your offer as others have stated.

I hope this helps.