All Forum Posts by: Zack Thiesen

@Patrick Reagan The age doesn't matter as much as how it's built, what it's been through (pests, weather, water, bad flashing etc), if it's been retrofitted or improved over the years and the condition of the material. What kind of foundation is it? 

I guess to answer your question as best as I can from what you asked: An old foundation is not necessarily bad. They can be much better even than some new ones. I will take the old growth redwood, full dimension lumber that is 100 years old sitting under my house but looks as dry and good as the day it came out of the mill yard over pressure treated new growth any day. Same could go for much of the masonry and stonework of the past compared to now. But just because it's old doesn't mean it's always better either. I have worked on some houses over the years that I am shocked that they have stood around this long, seeing some of the framing and the failures before they knew certain things we now know with modern building science and product/technique innovation. And some of them were kit houses built when there were no building codes by just the homeowner themselves and his friends or neighbors maybe. Or camp/temporary housing for different industries that I'm sure even the builders would be surprised these things lasted more than 20 or 30 years if they were still alive. Depending on how it was built and what it was built of there can be problems with any house or foundation - regardless of when it was built - and they're all pretty headache-y. 

An inspector should be able to help you determine the general condition of most types of foundation before you go through with buying anything. Or if you can provide photos or more descriptions I'm sure people can help you out some more!

@Linda S. I definitely second fire. Certainly before the loss or damage of my assets I care about the people inside, that is my top priority. I also have an abundance of detectors of both types, and I hardwired them so no lapses from forgetting to change batteries.

And probably earthquakes too.. mine are all where I live in California and are old houses on post and pier. Earthquake insurance is separate and prohibitively expensive and almost no one has it. Also besides the total loss of the structure to a quake I worry about the normal 1 or 2 a year big enough to knock things over and hurt people.

@Maria D. Great! Just wanted to add that I brought it up because it sounded like you were maybe wanting to find somewhere more local to you to invest. Obviously there are OOS markets that offer much more substantial cash returns. But as far as CA I've had great luck here. Awesome area with large university, new development, appreciation, right on the ocean and ability to rent places by the room. Good luck on wherever you go!

@Jeremy VanDelinder No offense taken, hahh hence the term "sometimes." I've never attempted fire restoration bc I'm not qualified and wouldn't even try. Just wanted to put it out there in case no one else replied that you've gotta look for someone like you and not just any old carpenter like me. 

The only experience I've got is a client of mine who had a fire in his remodel and I personally thought it looked FUBAR'd but he later told me it actually wasn't bad. I was shocked when he told me little it cost (well, relatively little)

That is great advice you give too about the water damage side of it. @Michael Lloyd you'd be looking for a guy like Jeremy here wherever you're located.

@Michael Lloyd A lot of times there are specific contractors that specialize in fire and flood rehab, just putting it out there as far as to what type of contractor to hire. Where I am there is a local builder's exchange (like a guild, kind of) that you can call or walk into their offices as a homeowner and tell them the type of work you need done and they can give you a list of reputable contractors that have certified experience in that work. If you've got something like that, take advantage of it, or ask around. And as always, get multiple bids.. sometimes fire damage can look a lot worse than it is and you might save 1000's

@Stephanie Drouillard I listened to a podcast the other day with Zach Beach as guest discussing creative seller financing strategies from buyer and seller standpoints and you might find it informative. He has some great insights in the interview and ways to preserve your capital. I have never been involved in a sandwich lease and had to Google it, hopefully someone else can give you some info on that. Sounds interesting for sure! But just wanted to put this out there in case it might be useful. 

https://www.millennial-realestate.com/single-post/2019/09/11/65-Creative-Seller-Financing-With-Zachary-Beach

@Donny Long There are so many variables that a hypothetical answer would be virtually meaningless. 

What if you find a very distressed property that is $12,000 asking and it's potentially worth $65,000 ARV, it's a great deal, right? What if it's a triplex that needs three of a lot of expensive things, asbestos abatement, discover there is soil contamination because it used to have a small gas pump and holding tank under the driveway from when the 3rd unit used to be the driver's quarters in the early 20th century and it's leaking into the earth (I've actually come across that) and it totals way more than $65k? And the list could even continue.

That's why you have cities selling $1 houses and streets lined with dead assets. To bring automotive lingo into it, that house is "totaled." 

If you want to know your max purchase price formula it's: ARV x .7 - Cost of Rehab = Max Offer

But the overly dramatic example I gave (sorry... but it can turn real quickly) is why you have to know that cost of rehab with some degree of certainty, or else simply asking what percentage of 65k would make it a great deal is irrelevant. Labor costs are different everywhere you go. Materials cost more or less depending on where you are. RE markets are regional and trends are different everywhere you go. But you have to know those variables for the market you want to invest in and there really is no shortcut around it. 

I hope that helped, and good luck finding a great deal!!

@Allan Smith I don't understand what people mean when they keep saying "water lines" but a sewer lateral is not just a water line, when it breaks it releases raw sewage into the ground water. I wouldn't call that "hardly any damage"... if you're talking about the actual water lines/supply lines to the house, then you're right. Not worth it at all. 

They don't easily last 100 years. Where I live the sewer laterals are made out of clay or cast iron. Two things that are extremely brittle with seismic shifts. They break all the time. The guy 3 houses down from me had to dig his up this last summer and it cost him $8k. The real difference from the things you're describing is the difficulty in inspecting the lines exact condition, it's not like a roof or windows at all. And sometimes cities don't even have records to state exactly how deep they are or along what path they travel in the ground. I went to ask my city when I was burying some electrical conduit in my yard about where the sewer line was regarding its depth and it was so long ago that they had no record. Not even an idea of how deep it MIGHT be. 

Your city might be different. You might know the infrastructure is new, or fine, and where it is, or live in a new development etc. But I'm just saying it's something to consider depending on where you are. 

@Mindy Bowden Step one: Make sure that offer is not a scam. I have never heard of that... how did you get the offer? I regularly receive text, emails and paper mail, even people knocking on my door from my "utility company" and it's a dead ringer for their letterhead sometimes even, but fake nonetheless.

And to be clear is it for sewer lateral (waste line) replacement or the incoming service line of clean water to your rental? I am guessing it's for the sewer. 

I've never had to pay to replace one on one yet but I know it is costly, especially the distance it goes and the potential difficulty of the excavation. I also remember asking my insurance agent if my insurance covered that and she said no and that it rarely will. 

If it's a legit offer and depending on the age of your infrastructure and/or house I'd consider it, because that is a very expensive thing to pay for. Like I said, I've never heard of that, but I kind of wish my city had that program, I'd prob buy it. I live in a town where almost every house is a century old or thereabouts and some of our water mains are still the original ones made out of WOOD, which is insane.

@Mindy Bowden

@Account Closed 's very creative suggestion with the contractor coming in to hit your market-ready punch list on their own dime in exchange for profits. If someone came to me with that - and after making my own assurances on those numbers - I would definitely consider it...