BUYING A FIX UP HOME – PART ONE AVOIDING MAJOR STRUCTURAL PROBLEMS

Are you looking to buy a home listed as a “fix up” to renovate it to either sell or hold?  There are some homes because of structural issues are simply not worth renovating.  The older the house the more these complications can occur. Here are some suggestions of problems to look for:

·         FOUNDATION –

 Slab - An addition to a house built on a slab of concrete may lack a proper foundation support (a minimal 3’ deep footing around the periphery of the slab).  This occurs when a patio or garage has been converted to living space without a permit.  Hints of problems are vertical cracks where the addition connects to the building, cracks in the flooring and significant sinking.

Crawlspace – Multiple large cracks and sinking foundation walls may be an indication of a severe structural problem that cannot be cost-effectively corrected.

 Basement Walls – In addition to problems mentioned above concerning crawlspaces, heaving basement walls could be an indication of a shifting foundation.  However, water in the basement may also be as simple as ensuring all the gutters are functioning and moving the water at least 5’ away from the building (which will reduce the potential for cracks in the foundation walls).

·         ROOF FRAME – Completely rebuilding a roof can become cost prohibitive for a basic renovation. Three areas of particular concern may necessitate rebuilding or reinforcing the roof:

Sagging – The older the house the more likely the roof structure (the triangle framed roof consisting of rafters and ceiling joists) or the slope rafters and roof deck boards may be sagging due to age or thickness (some turn-of-the-last century actually have 2 by 4 rafters). 

Spreading - The tie rafter or ceiling joists (the lower horizontal member of the truss frame) are connected to the exterior bearing wall to prevent them from being spreading or forcing apart by the compression from the roof.   These may be missing, not properly attached, or undersized.

 Anchoring – Modern roofs are usually trusses and firmly clipped to the exterior walls.  Some older houses don’t have this, which can cause the roof to move downward and cause the walls to push out.

·         EVES & SOFFIT SUPPORT- Replacing eve fascia boards (normally behind the gutters) and soffits (the exterior ceiling board under the overhanging roof) is not an uncommon renovation requirement.  However, if the triangle end of the frame (the eave overhang), upon which the eves and soffits are anchored to, has major rotting due to water damage, this can become a cause for concern about the stability of the roof structure and correspondingly a much greater expense.

·         NON-BASIC CODE COMPLIANT ADDITIONS – Sometimes it is apparent that “Harry Homemaker” has added on rooms, converted space or finished the basement without following basic code requirements or demonstrating knowledge of rudimentary construction.  The biggest concerns are exterior walls without an adequate foundation footing, bearing walls removed or improperly supported and new walls not built to code specifications. When this has occurred plan on having to completely redo what he did - Or run, don’t walk, away from this house.

·         LOAD-BEARING WALLS – These walls are end points for floor and ceiling beams.  Look for foundations or concrete footers in the basement/crawlspace that support a center beam that runs perpendicular to the floor joists.  If there is a wall or beam directly above these on the next floor of the house, that wall or beam is load bearing.   The roof is also braced from the ridge line to the top of the center bearing wall.  Eliminating this ground to roof support system can jeopardize the stability of the house. 

·         SINKING FLOORS & CRACKING WALLS - Crevasses in the interior walls, dipping floors around the bearing wall, a spongy floor and missing or no plume posts can be indications that they are not properly supported.  While, it may be a simple matter of adding an adjustable floor jack post in the basement/crawlspace to shore up the bearing wall, it also could be symptomatic of much bigger problems.

·         LAND SLOPING TOWARD THE HOUSE – If one or more sides of the house have the yard grade heavily slopping toward the house, there is a strong potential for structural damage and/or basement/crawlspace flooding.  Sometimes this can be easily corrected by re-grading the yard.  However, if the adjoining yards are higher than the house it will require the installation of a V-channel, perhaps with a French drain system, to move the water away from the home. 

·         BRICK & MORTAR – A brick house is preferable to a frame house.  However, the older the home the greater the potential for major remediation work needed to stabilize and strengthen the exterior brick walls. 

 Not All Brick Houses are the Same - Homes built in the late 1800’s and early 1900’s (plus even some built after WWII) have “sand” brick which was not fire hardened.  You’ll recognize it because its edges are many times rounded from the weather and you can carve your name in it with a pencil.  The problem with this soft brick is that it is extremely difficult to anchor anything to it such as trim, windows, etc. plus the window sills are normally eroding away.

 Leaning Exterior Brick Wall – An associate bought a Queen Anne Victorian house without realizing the two and half story brick wall on the south side was leaning out.  It cost him a fortune to have scaffolding built to hold up the building while the whole wall was taken down and restored.  No money was left for the house’s remaining renovation needs.

 Mortar Deteriorates Over Time -.  Typically problems are collapsing chimneys, missing bricks and crumbling or no mortar between bricks. While some tuck pointing can be done by a semi-skilled worker, replacing portions brick walls requires a mason (think expensive)

·         BASEMENT FLOOR – The basement walls appear fine but the floor is heaving with numerous cracks.  Inquire if this is caused by shifting soils which also affect the homes in the neighborhood.  If its cause is an underground stream, expect to have to jack hammer up the whole basement floor and replace it, add perimeter under drain pipes plus a sump pump.  You better get this house for a good deal to consider undertaking either of these expenses.

If the home has had any major restoration, replacement or construction work performed on it you can find out if any of these were done under permit.  You can contact the county building department and they will give you the history of all permits pulled and completed.  If major work has been done to the house and none of it under permit (and it looks it), don’t buy it.

Structural problems in particular may make a renovation economically unfeasible, but not always.  For a reasonable price you can hire a structural engineer and you may discover what looks bad can be easily corrected.  Whenever, I see these kinds of problem I call my structural engineer to do a preliminary screening to assess the nature of the problem.  I have bought two homes for a great price because other buyers thought the structural problems were overwhelming but my engineer found economic solutions.

Special thanks to Robert Knickerbocker, Structural Engineer for assistance with writing this Blog and for the many times he helped me with purchasing and resolving problems with fix-up houses.  If you have any questions about a house you are considering buying, turn to Robert.  He can either do a economic structural review of the house or you can retain him as you Buyer’s Inspector.  RTK Engineering - (303) 477-0044. 

TEN MAXIMS FOR FIXING & FLIPPING PROPERTIES

1.         K.I.S.S. – Keep It Simple & Speedy – Your profitability depends upon staying on task and getting the renovation done quickly. Don’t be Stupid!

2.         EXPECT THE UNEXPECTED – Add a fudge factor into your plan; 10% contingency in the budget and 20% more time to complete and sell the house.  When hit with a challenge, be decisive and solve it quickly. Believe; where there is a will, there’s a way.

3.         FORGET “CURB APPEAL” IT’S NOW “ONLINE ALLURE” – All parts of the house and the property need to be renovated so they look good to people searching the web.  People no longer select a house based upon a drive-by or from a sole picture of the front of the home on the MLS.  Demand that your Realtor use a professional company to do both wide-angle photos and virtual tours (many title companies are now paying for this).  If you’ve done your restoration right, they should be able to easily take 25 different pictures of the house, rooms and yard.

4.         THERE IS A REASON THEY ARE CALLED PROS – You might be able to do it almost as good as a professional, but they do it every day, Faster & Better (Your effort could better be focused elsewhere; Your profit could be diminished by the increased holding time while you screw around).

5.         YOU DON’T GET WHAT YOU EXPECT, YOU GET WHAT YOU INSPECT – At the start of each day check the last day’s work and set the expectations for the day.

6.         PLAN THE WORK & WORK THE PLAN – From the day your offer is accepted, begin planning.  The day you close, start the work. Hold to your budget and expect all to hold to their agreed schedules.

7.         QUALITY, SPEED & COST; PICK THE FIRST TWO – Better to have a quality job done on time than picking the lowest bid subcontractor.  A low price normally means that common sense components of the projects are left out of the bid and working other people’s projects are built in – Find Subs whose reputation is to finish on schedule and on original budget.

8.         CREATIVITY CAN MAKE UP FOR COST – The renovation should project a high quality but be moderate cost.  In the front end, bring in a designer (they are not that expensive) to help you establish more unique colors, layout and artistic choices that will make the home stand out.  For the same cost you can get renovation materials better than Home Depot generic.

9.         SATISFIERS SELL THE HOUSE; NO DISSATISFIES CLOSES THE DEAL – The design and unique qualities of the house will attract the Buyer but a good Buyer’s Inspector can kill the deal; If you cut corners on the house renovation, the Buyers are likely to discover it and they will either walk or demand the upgrades that should have been done from the beginning.

10.       THERE IS NO “I” IN TEAM WORK – Do you want the people working on the house’s renovation to be: Incomplete, Incompetent, Indefinite, Indifferent, Incompatible, and Imprecise?  Your success depends upon building a good team.  It will take time to build a group of subcontractors, associates and workers you know you can trust.  Once you do, think about bonuses for those who get the job done correctly, on-time and cooperate with others so they can do the same.  Rather than a penalty in their contract for failure to meet quality and timeline criteria, reward them for getting it right!

LITTLE THINGS TO MAKE A DIFFERENCE IN SELLING A FIX & FLIP HOME

I recently previewed a number of starter homes that had been renovated by fix & flippers.  Since I’ve done this for over eleven years, I noticed some little things that in my experience don’t cost much but will speed the sale of the house while ensuring the best price:

FRONT OF HOUSE

·         Front Yard Landscaping & Lawn – Though the inside was totally renovated some of these properties did nothing to the outside.  “Curb Appeal” is still relevant!  Eliminate the old overgrown bushes and trees.  Replace them with some new bushes and flowers.  If the front lawn is savable, water and de-weed/fertilize it; if not, sod.

·         Awnings – They are dated, unnecessary with modern windows and diminish the first impression (Not to mention making the inside of the house darker).

·         The Front Door – Many of the original doors were kept unchanged.  If they are of good character, they need to be sanded and finished.  Beat up doors should be replaced – Try the Masonite Steel White Pre-hung Right Oval etched glass Entry Door which are not expensive (Home Depot).  Old or new consider painting them a striking color to complement the house colors and bring more light into the entrance way.

·         Black Front Security Door And Metal Posts - Paint with metal primer & spray paint either the color of the door or to match the trim.

INSIDE HOME

·         Interior Walls – Some houses’ showed cracks on the ceiling and walls plus distorted old texturing.  Patch the walls/ceiling then texture them with a heavy orange peel spray texture (except the kitchen and bathrooms).

·         Bathtubs – You can keep the old tub (if it has no chips) but replace the drain and overflow plate and clean up the rust with Bar Keeper’s Friend.

·         Electric Receptacles – Because one of the last things done is to put the covers on, sometimes a gap in the sheetrock will show.  There are wider covers which can be purchased that will cover this up.

·         Overhead Lights – Now is not the time to be energy efficient.  Put the maximum allowable traditional bulbs in each fixture.  You want to make each room look large and well lite!

·         Decorator Colors – These are great for the kitchen, living and dining rooms but in small bedrooms and hallway, keep the colors light to make them appear bigger.  Consider using a dense white pigmented primer and don’t even paint these rooms.

KITCHEN

·         Kitchen Lights – One or two ceiling light fixtures is not adequate for a kitchen.  Best option is to put in can lights (Commercial Electric 6 in. IC Remodel Recessed Housing (6-Pack) is less than $300 @ Home Depot).  An economic option is to replace the overhead kitchen light with two Hampton Bay Linear Track Kits (Home Depot $29.95 each) plus a track connector to link the two.  This will give you eight spot lights which you can aim all over the kitchen.

·         Knobs for Kitchen Cabinet & Drawers - Satin Nickel Hollow Round Knobs - Pack of 25 knobs @ Home Depot $39.98 will enhance the kitchen cabinets’ appearance.

·         Countertop Bullnose – Tile countertops that lack a vertical bullnose (end cap) look unfinished and not esthetically pleasing.

BACKYARD

·         Privacy Fence – A six foot high wood fence is a strong selling point as it blocks the view of the neighbors’ yards and in some properties, the alley.  If all or part of yard has a fence that is in good shape but discolored then power wash it.  Where there is no fence, install them on all three sides – The cost can be as little as $100 for each eight foot long panel with posts and cement.

·         Lawn – Clean up the lawn, kill the weeds plus water and mow regularly.  If it is Spring or Fall you can seed dead patches.

·         Concrete Patio – If cracked, patch it then paint the whole deck with a concrete stain that matches the house colors.