Are Major Foundation Problems Worth Messing With????
I have found a property that is in prime location and appraised at 162k. I can most likely get the home for 40-50k. 1/3 of the house has sunk 2 inches and will cost about 40k to fix properly. The inside will cost another 20-30k to be updated. This is a huge rehab and i'm not sure if I have the knowledge and time to complete it. The foundation problems really freek me out!!! What do you experience rehabbers think about this scenerio??? Should I just try and flip it to another investor?? [ Edited by pannet on Date 04/08/2004 ]
are you planning on doing the work or jobbing out. kenmax
I'm planning on subbing out the majority of the work, but doing the minor stuff such as painting, minor plumbing, and landscaping.
if its "freaking" you out and you don't have the exp. maybe you should "flip"it. rehabbing exp. if you do it yourself and you need to know what your doing if you job it. ..........kenmax
from the looks of your figures your profit margin for such a large project would not be it for "me" to attempt for such a large undertaking i would have to have much larger profit. kenmax
how much profit would you expect from this type of deal?? There's potentially a 50-60k payday at the end of this deal!!! That doesn't seem like chump change to me.
[ Edited by pannet on Date 04/08/2004 ]
first let me ask. what exactly is wrong with the f/d what will be done for the 40k. from your figures i see a total exp. of about 120k. are you paying cash or will loan exp. have to be added. give me to the best of your knowledge your total "purchase exp. kenmax
no it's not chump change. but you said you had little exp. in rehabbing. and it was freaking you out. if you have sever foundation problems. you might learn a lesson the hard way. why do you think it's so cheap. kenmax
The foundation needs to be mud jacked and then steel support beams will be put in. I will be getting a rehab loan at 8.5% and no payments for 6 months. The entire amount will be due at that point. If finished prior to that there is only simple interest due on the total amount borrowed. I figure I will rack up about 2-3k in loan costs. Let me ask you this; do you think this deal would be interesting to any experienced rehabbers? I would actually just like to flip it for a small fee and let someone else do the rehabbing???
it would not to me. i will not touch structure damaged props. for me it would be to major. the profit margain vs. work to be done would not intice me its a good margin but to much work/time but other people buy then everyday. if you have the time put an add in the paper discribing it in detail as you have here and see what responses you get. if you feel that it will not over power you go ahead and rehabb. it. but for me its time vs. money. i can find home that aren't that intensive to work on and make excellent.profit. i would def. flip it. ggodluck kenmax[ Edited by kenmax on Date 04/08/2004 ]
The hidden costs to repair the foundation....seem large. Why did is sink? Is there a water seepage drainage cause? Is the soil unstable? Is it clay soil that expanded with moisture or was compacted poorly by developer??? Mud jacking the house is inexpensive but the hole underneath may be a money well... and I am thinking of one you just put money in and no wishes of gains come back. Get a couple estimates and an engineer to look at it. The county may have records of other similar problems in area ?