Posted by Eric C on February 18, 2001 at 13:07:58:
Hi John -
I have to agree with Ed about passing on this one, primarily because of the numbers, and his observation about the people involved.
Nevertheless, houses with cracked foundations can be profitable.
I know at least one investor in Houston, one in Dallas, and one in Austin who specialize in these houses.
Sometimes they fix them; sometimes they don’t.
While most significant flaws can impact a property’s retail value, not all flaws (including cracked foundations)affect the rental income that the property can produce.
In fact, all of these guys look for significant “flaws” because they realize that the majority of investors, realtors, bankers, and homebuyers will pass on these properties.
Heck in Dallas/Ft. Worth, half the radio commercials during “drive time” seem to be for foundation repair companies. Would it surprise you to discover that some of these folks own significant numbers of properties themselves?
I used to partner with a guy who was in the “biz”. He did the work, I put up the money. We both did very well.
Just another viewpoint to consider.
PS - and yes, these houses can be insured.