Let’s assume you used this rehab property’s significant foundation problems to knock down the purchase price, but are now re-figuring your costs and project plan. Maybe you either didn’t catch or underestimated some of the big issues and costs before purchasing. Or, perhaps you bought it with full knowledge of the foundation condition, but are thinking of wholesaling or otherwise disposing of the property without putting any work into it.

What are the ramifications of listing for sale any property without first fixing the foundation issues?

• Disclosure.

Obviously a bad foundation is a major item of required disclosure. Check on your state’s disclosure laws to be sure you are in full compliance. Not properly disclosing can allow the buyer to legally come back to you later. That applies even if the buyer is another real estate investor.

• Lenders won’t issue a mortgage on a home with foundation problems.

Forget about trying to put it on the retail market (with disclosure) because the property looks ok on the surface. Even if you drop the price to cover the cost of repair, lenders won’t issue a mortgage until the foundation passes inspection as sound.

• If the city condemns a structure that is at immediate risk due to the foundation problems, the structure may be demolished by the city, and you get the bill.

If you list it, the city is more likely to learn of the problems and do an inspection.

Sellers are more likely to be motivated to just take a check and get away from an overwhelming foundation problem. Real estate investors can find big opportunities, but also risks that are just a big. Because then it’s your turn to solve the problems with the foundation! Sticking firmly to the safe purchase price is never more important!

But if you have underestimated the costs, work and time needed to put right both the foundation and all the issues caused in the structure above it, you can discover a seemingly bottomless pit of work and money. Costs could run from $10,000 to $50,000 to stabilize and level the house – assuming you find the foundation expert who can do it. And there aren’t too many options to escape the project intact!

Make sure you do due diligence and purchase at the right price, and not only could this property be a profitable project, you may be rescuing a dwelling that was otherwise destined to be the neighborhood problem house. Know what you are getting into – and plan your timelines, work and finances accordingly

Do you feel prepared to take on major foundation issues in a rehab? How do you make sure you are fully aware of the true condition of your project before you purchase?

Want to earn money with little or no investment of your own? Keep an eye for my new ebook “STREETWISE PROPERTY INVESTING WHOLESALE BLUEPRINT” explaining wholesaling and how to make it work for you!