Always Pay Attention to Your Inspector

You can see the three pieces of undersized rebar that supported the foundation in the two-story duplex.

This post originally appeared on the Hermit Haus Redevelopment website on 2015-11-25.

We bought the Villa Park property almost two years ago because there was a nice house and a duplex behind it for a total of three rental units. It was one of the last properties Sue Ann and I bought before forming Hermit Haus with Carol and Russell.

At first blush, it was going to cash flow really nicely. The previous owner had done a bunch of cosmetic work to make the property more presentable. Curb appeal was absolutely gorgeous.

I hired my friend, Bob Smith, to do the home inspection. I’ve worked with Bob on several other houses, and I’ve even walked away from deals based on his recommendation. This time I didn’t listen, and it bit me in the butt.

There was a seemingly innocuous line about the duplex in the inspection report. It said something like, “Have a foundation professional inspect the foundation.” I thought, “Yeah, I know the foundation is bad. No problem will just have it leveled.”

Well, the first time it rained we had water coming up through the foundation into the duplex. Luckily we hadn’t rented it yet because we wanted to level it first. When we ripped up the carpet, we found that the foundation was not just unlevel; it was crumbling. That lead to our first experience with the Wall of Dis. I mean trying to get permits in Austin.

But this post is about the foundation.

To dismantle and repour the foundation, we had to lift the building off of it. When we started demolition, we found out that none of the electrical work in the duplex was to code. We found bare wires spliced with electrical tape inside the walls and numerous other problems that could have caused a fire at any time.

Thank God we had a bad foundation.

With the second round of permits in hand—the first having been “erroneously issued”—we begin demolishing the original foundation. It turns out there were only three pieces of rebar in the entire slab. (Rebar is the thin metal poles that run through concrete to give it its strength.) No wonder our foundation crumbled. There was nothing to hold it together.

We’re finally back on track. The trenches are dug, and we will pour the beams that will support the main slab. Once that’s done we can reattach the building to the foundation.

The moral of the story remains, “Always listen to what your inspector tells you.” If I had brought in the foundation company before closing on the house, I could’ve saved around $150,000 in rebuilding the duplex. I might have at least been able to negotiate the purchase price down a little. Maybe not, there were three backup offers on the property.

When we’re done we will have a three-bedroom home instead of a duplex behind the main house at Villa Park. It will take about 10 years of rental income to recoup the expense.

I’ve learned an expensive lesson. But it’s one I’m glad to share with you.