Posted by JayHoward on January 11, 2001 at 22:38:30:
Your last paragraph touches upon the very reason I consider RE with foundation problems potentially a good area to concentrate. Since most buyers are scared off by foundation repairs, there’s opportunity for bargains.
However, on the flip side, many potential buyers have a stigma about buying property that’s been piered. I know when we were looking for our personal residence, we ran across a couple of houses with that needed them and we passed. I don’t know how we would have reacted if the piers had already been installed and the house had been given a clean bill of health, but I suspect we would have still passed. So my thinking is buy at a low enough level that it can be repaired and sold for a profit at a price slightly below the comps. The reputable cos here that do this kind of repair offer a lifetime guarantee on their work regardless of the property owener, so there’s some comfort for the buyer.
This is an area I will continue to explore. Thanks for you note.
JH
Foundation ??? for experienced rehabbers. - Posted by JayHoward
Posted by JayHoward on January 11, 2001 at 10:04:24:
I know of several properties here in Tulsa with structural problems. Specifically, they all need piering and repairs caused by the foundation shifting. For example, one is listed at 109,000, but it’s going to go for much less, probably around 90,000 or maybe even less. The comps in the area are in the 150,000 range. Now I know a house that’s been piered will certainly turn off some buyers, but is there a price that would make these deals viable? Or is the risk just too much to take on?
My partner, who’s experience is in more cosmetic fixer-uppers won’t even consider these more serious repairs, but it seems to me, at the right price, one can still make a profit even if the retail sales price is lower than the comps.
Anyone doing these kinds of deals?
Thanks.
JHoward
Re: Foundation ??? for experienced rehabbers. - Posted by steph in tex
Posted by steph in tex on January 12, 2001 at 07:08:41:
Jay,
I would say a lot depends on your exit plan.
Are you considering keeping them as rentals?
Selling on terms and carrying paper?
Retailing?
I have several homes that have foundation problems, some I’ve fixed, some I haven’t. The ones you plan on retailing, well, of course fix 'em, but make sure you get a warranty that is transferrable to the new owner.
Have a copy of the engineers report and warranty for your buyers. When the house looks good, you can sell it~if you pitch it right. You may loose some buyers, but if you’re priced right, or offer terms, you should be ok.
That’s my experience. I’m in Austin in a fast moving market, though. Hope this helps.
Re: Foundation ??? for experienced rehabbers. - Posted by Kevin Subbert
Posted by Kevin Subbert on January 11, 2001 at 22:24:19:
Its not so much as the foundation repairs as it is all the other problems caused from raising the slab. Raising one side of a house 2 inches can be done for under $5000 if you use the cheaper piers, I think they are called “double 8” piers (which are still good piers). However it is recommended that you let the house settle for 3-5 weeks after raising it, thus adding to your holding costs. It will also add to the amount of structural damage, and perhaps bust a water pipe or sewer line. A busted pipe under the foundation can be expensive to repair. After everything is done there is still no guarantee that further damage wont occur 2 or 3 months down the road.
JHoward,
I personally have no experience in foundation problems. What I have gathered off this website is to be creative problem solvers. The most important thing is to be certain, whatever you decide to do, that you ‘CYA’. What I would suggest is to research into local houses with foundation problems. Find out who repairs them, how they repair them, and the cost to the average homeowner. If you can start up a business relationship with a foundation repair company you should be able to get some type of discount for continuous use of their services. That way no foundation problem is too great for you to handle.
Now the big bonus! I have observed through RE pro’s that foundation problems scare the @##@R#% out of the typical consumer. The costs are phenomenal to the inexperienced. Your relationship with a repair company and repeated business will minimize both. Foundation problems should give you a license to give extremely low ‘offers’ on the house ,especially if its a bank foreclosure. Hope this helps:)