Love Austin Homes Investing Blog

Does anyone have any experience with a house leveling company in Austin?

Thanks,
Terry

ANSWER

Terry,

I use Centex. They are pros. Last year I had a VERY complex foundation job and had several companies bid it. Some bids were much lower than others. Upon reading the proposals carefully, I determined that a few of the proposals would simply not work (not enough piers in the right places – hey, I’m an engineer). Anyway, the Centex bid was the most comprehensive.

Additionally, Centex offers a lifetime warrantee, which conveys to the new owner. Because many buyers are leery of a home that had a foundation problem, this is a key selling feature (that may translate into selling at a higher price). I know I I personally am reluctant to buy a home that HAD foundation problems, as a homestead,

Anyway, as it turns out, my house DID have additional problems. It shifted after numerous rainfalls, and Centex came back and fixed it for free.

If you need a bid, call Isaac Benavides with Centax. 512-444-5438 or moble 512-658-6925. Tell him Phill sent you.

Phill

I have a question for the more experienced rehabbers here. I’m currently
analyzing a potential rehab project in which TravisCAD shows the
property square feet as 900, however the original property owner has
added 2 additional rooms to the property over the years, increasing the
true square footage to approx 2000. They seem to be illegal additions as
they are not reflected in the tax roll.

What potential problems could arise for me down the road as a result of
this if I decided to go ahead and do the rehab? Issues during
inspection? Issues when trying to sell? Both? Any insight would be
greatly appreciated. Thanks.

-Mark

ANSWER

Mark,
Illegal additions are very common.

My biggest concern is that the additions were never permitted, and therefore may not meet building and safety codes. For example, the windows may not have been flashed properly, or the joists may not be sufficient to hold the load, or the roof may not have the proper slope, or a supporting wall was removed, or a door was put in without a header above it, or the plumbing was not vented, or there is no or insufficient insulation, etc. I’ve run into all of these.

In some cases, you can catch these or an inspector may catch these. I recommend an inspector that is also an engineer, as an engineer is more likely to find these sorts of problems. Of course some of these are ‘in the walls’ and quite hard to find.

As for liability – you are not technically liable for the addition when reselling a home that a prior owner added an illegal addition to. However, poor construction problems can manifest, causing problems to the home while you own it, and/or creating conditions that your buyer’s inspector finds when you try to sell. You could also incur liability if you discover a defect and/or safety problem with the home, while you own it, that you do not disclose when you sell it.

As for the city/county – I have been told there is no process for doing a post-construction building inspection to determine if something was done right. I suppose you could invite the county/city in to measure the additional space so that they could increase your tax assessment, if that is your goal…

All that being said – most additions I’ve run into were done reasonably well, but just never permitted. For those – enjoy the extra space!

Phill

I’m buying a 2004 house in rural Williamson Co. for about 62% of tax
value. I can’t pass it up as it will be a nice cash-flow rental.
It’s a simple 920 sf, 2 BR with wood floors throughout and has a block
wall exterior. Apparently there is little or no ventilation under the
house and a plumbing leak probably contributed to a rather significant
mold problem , primarily underneath the house.

I don’t have a tank of chlorine dioxide laying around to flood the
house with to resolve the issue. Before I knew the extent, I crawled
into the sub-floor space and attempted spraying everything I could
with a bleach solution. Then I left moistened pool chemicals in and
under the house hoping they’d bleed out some chlorine gas. Then I
tossed 6 Lysol can “bombs” under the floor and left the house. I know
they have approved uses and warning labels on all these for a reason,
but I’m looking for a simple cheap solution if I can find one.

Does anyone have experience with mold remediation that can recommend a
professional and might guess what it will cost? Again this is vacant
house in rural Williamson county with no nosey neighbors, except cows.

I haven’t closed on the house yet and won’t lose much earnest money
should I walk away, but I think it can work out somehow. I’ll contact
the seller to find out if it could be covered by his insurance before
I go any further. It will help to know how much it will cost to fix,
in case he might go lower on his price. I suspect he knows of the
problem (but didn’t disclose) since it was on the market a while and
he let it go so cheap. Feel free to email me outside the group.

Thanks,

Alan

ANSWER

Alan,

I admire your do-it-yourself attitude. We could go on all day about the hype and realities behind mold.

In general, I tend to avoid mold homes because of the stigma associated with them. If there is a certified mold report on this home, or if mold insurance claims have been made in the past, or if there is any other documentation that the home has mold, the home will forever be known as a ‘mold home’, and your only chance of ever reselling it, at other than fire sale prices, would be to have it professionally remediated (and certified as such). Needless to say, professionally mediation costs a fortune. The process includes removing any material that is within many inches of affected material – which can include mechanical systems and structural elements of the home. I’ve known of 3 average size homes where remediation costs ranged from $60,000 to $150,000. Was all of the remediation necessary – I doubt it. Was it required to get the home certified as mold free. Unfortunately, yes.

Now, what if you just keep it as a rental? It would seem to me that you would be setting yourself up for a potential lawsuit. The third time your tenant’s baby gets the sniffles, you end up in court facing off against Professor Fruitloops who is testifying in front of a jury full of moms about how your moldy house ruined this kid’s development and future. Ka-ching!

Of course, another way to look at this is if there is no documented proof that this home has mold, who’s to say that you don’t just have a mildew problem…

Phill

Austin Business Journal – 3:07 PM CST Wednesday, February 28, 2007

A bill recently filed in the Texas Legislature could essentially nullify an Austin city ordinance that restricts home sizes in certain neighborhoods.

Rep. Edmund Kuempel (R-Seguin) has filed House Bill 1736, which would require that cities only regulate home size on one of three criteria: impervious cover, footprint of the lot or floor-to-area ratio. An ordinance passed in 2006 by the Austin City Council limited home sizes on all three criteria–an effort to stem new construction not in keeping with the character of Austin’s more established neighborhoods.

Ned Munoz, director of regulatory affairs for the HYPERLINK “http://www.bizjournals.com/search/bin/search?q=%22Texas%20Association%20of%20Builders%22&t=austin”Texas Association of Builders, says the group has been lobbying for legislation that would ease restrictions on new home construction. TAB also supports another bill filed by Kuempel, House Bill 1732, which would require a municipality to give proper notice before changing housing regulations. Munoz emphasizes that both bills would apply to municipalities across the state that might try to place so much restriction on new construction that it takes away from property value.

“What has happened with this ordinance is that people who own land are very limited on what they can do with it,” Munoz says.

The ordinance is essentially a one-size-fits-­all law, says Munoz, putting the same restrictions on both small and large lots and penalizing the owners of smaller lots.

“This is impacting property values,” Munoz says. “People will not be able to get the same price for their land.”

Both bills are currently pending before the HYPERLINK “http://www.bizjournals.com/search/bin/search?q=%22Land%20%26%20Resource%20Management%20Committee%22&t=austin”Land & Resource Management Committee.

“The impact of the bill is to gut the ordinance,” says Austin Assistant City Manager Laura Huffman. “This won’t allow us to regulate in areas covered by the ordinance.”

Huffman says the city council put together a 16-member taskforce comprised of people representing development and neighborhood interests. “That strikes a balance of those who are interested in remodeling homes, constructing new homes and protecting the character of our urban neighborhoods.”

Huffman says the taskforce held meetings for five months before making its recommendations to council in June 2006. The ordinance’s implementation was delayed until October to give the city time to get the word out to stakeholders and ensure staff was prepared to process requests based on the changes.

Huffman says Kuempel has asked the city to participate in discussions on the bill, but she adds that the city is opposed to any legislation that would gut its own ordinance.

Kuempel could not be reached for comment.

ANSWER

The formulator makes some good points: 1) It’s not fair for the city to change building codes on existing land owners retro-actively, and 2) Such rules make land difficult to develop and/or less valuable

Phill

I have run into a bit of a road block on remodeling one of my houses due to a city inspector. The small house I am working on has had a full internal electrical rewire and when we called the City inspectors office to come out and inspect the work, they came back and approved the inside wiring but wanted us to move the outside breaker panel box and meter to a different location because they say it is closer then 5 feet from the outside Gas meter.

Now keep in mind we did NOT change the existing box or meter but just tied into it. We told the inspector that we would be willing to move the Gas meter down some to get it further away from the electric. However, the city inspector is adamant about not only moving everything closer to the front of the house but also getting us to put up a new mast / weather guard because the way it is and originally was attached to the house from the City’s electric pole.

Anyway, I need to know if someone might have a Higher up contact in the City’s electrical inspection department in order to come up with some better options on this situation in order to save time and money by not having to move everything around.

Thanks for your help in advance.

Tim

ANSWER

Tim,

I always end up giving in and doing what the inspector asks in these situations. These two requests are common. They will undoubtedly also ask you to dig a large hole for a new ground line. If someone knows how to get around these sorts of requests, let me know…

Phill

Can anyone recommend a good contractor or company that can re-plaster a pool for a good price? Also need to get some clean-up work on the deck, and some basic electrical to get the pool light working. Pump and all is in good working shape.

Thanks,
Brad

ANSWER

Brad,
I use Apex Pools. The owner’s name is Gary Puryer. You can reach him at (512) 656-8460.

I recently had to rebuild a pool with several problems and I called every pool company in town. Needless to say, half of them never showed up to their appointments, many of the bids were crazy, and the rest were so unresponsive, I did not hire them. Gary was professional, solved every problem I threw at him, and gave me a fair bid.

Gary is the man. Tell him I sent you.

Phill

I need someone to assist in a small development of 4-10 modern/mid-
century modern styled homes.

I’ve gotten two bids but one is way too much ($14 sf) and the other is
a bargain (1.40 sf) but needs a 12 week lead time (too slow)

ANSWER

I highly recommend architect Luciana Misi of Lamme & Misi Urban Studio. 512.535.2024 (office). They have done the design work on a major project for me – they are investor friendly, the work is excellent, the rates are reasonable, and the service is highly responsive.

Phill

Does anyone have any thoughts on how having a high voltage power
pole/line in the backyard would affect the sale of the house?

Thanks,
Rob

ANSWER

Rob,
It’s pretty subjective. Most people find them unsightly. Like being on a busy street or having a view of a power plant.

There are many web sites that tout that power lines are a health hazard and even cause cancer. There are many studies that say that that’s all a bunch of baloney. Regardless, there is some health stigma around power lines that will reduce your market a bit.

I think with all of the these issues – in a hot sellers market, these sorts of things get overlooked. In a buyer’s market some will care and some won’t causing the home to sit around a little longer and perhaps requiring a bigger discount to get it sold. If you are buying one of these – make sure you get the ‘additional’ discount on the buy.

Phill

I am in the process of doing a complete remodel/addition on one of my properties. I keep getting different stories from my homeowner’s insurance about what is covered and what isn’t. The contractors are all covered on their own, but what if the whole thing caves in? or there is a fire or vandalism? I know that if the property is vacant for more than 60 days the policy is invalid. Has anyone had any experience with coverage during this type of work period? Should I be looking for a differnt type of policy while I do the remodel?

Lisa

ANSWER

Lisa,
You need to buy a “Builders Risk” policy. I use buildersrisk.com issued by Farmers (and others). These policies specifically cover VACANT homes under construction/renovation. Once the renovation is complete, switch back to a conventional homeowners policy.

As far as contractors and liability, you might want to talk to your insurance carrier about a personal liability umbrella.

Phill

Short story: Bought a house that had been moved onto a lot. Intent
was to do major remodel and flip. Inspection was performed at the
time of purchase and there were no major problems noted, except for
the fact that the house is on cinder blocks and is not bolted down.
8 months later, remodel begins. Kitchen sub-floor was torn out
showing the house sitting atop cinder blocks that have been “rigged”
and have pieces of wood between the blocks and the house that act as a
levelling device. (See photos in “Barbara” photo album.) More
importantly, the foundation beams are 12 feet apart, not 7 (8?) feet
per code which is apparent when walking throughout the house and there
are places that “give”. Before remodel can continue, the house has to
be jacked up and have posts cemented in place 6 inches below surface.
Estimates have come in between $4,000-$12,000. Not quite sure just yet
if the foundation beam problem is in fact a problem.

Question: is there any recourse? Is the inspector liable in any way?
The realtor? The seller? Anyone? Or have I just learned my first,
very hard lesson on buying a house “as-is”?
Barbara

ANSWER

Barbara,
Sorry to hear of your misfortune. I buy lots of pier+beam houses and unfortunately, many of them are propped up on cinder blocks, cedar posts, or worse. Many have improper beam spacing, rotting beams, and incorrect shims (they are supposed to be metal, and can only be so thick). If we tore down all of the homes in east Austin with these problems (or not up to modern foundation codes), it would look pretty sparse over there.

One possibility for recourse is to determine what the prior owner actually did. Were they the ones that moved the home? Did they get a permit, as required, to do so? If yes, they would have been required by law to build a proper foundation and have it inspected by the city. If on the other hand, this all happened long ago, and they have just been living in this house as it was for many years, and despite it not being up to code, it was good enough for their uses, then I can’t see that you have much grounds for recourse.

Additionally, you did get an inspection and the inspector did tell you – this house is sitting on cinder blocks, so you knew it had a sub-standard foundation. The sellers could therefore prove that you knew their was a problem – it was disclosed in your own inspection report. Furthermore, I know from my own experience that 99% of home inspectors don’t claim to know much about foundations, and usually clearly say so in their inspection reports. They almost always say “get a foundation expert or contractor to evaluate this further…”. Same goes for septic systems, wells, and a few other items.

So, I don’t know that you’ve got much to work with here, but I will offer one more suggestion – it never hurts to ask the sellers for compensation. I know that I once sold a home with some problems (that I did not know about because I only owned the home for about an hour before a flip). In that case the buyer called me after the sale and threatened to sue me. I basically asked my lawyer if they had a case, and he said “no way, but they will cost you several thousand dollars in legal fees”. So, I offered them several thousand dollars in the form of a “good will” refund, and went on with my life.

You can also sell this turkey to another investor, like me, if you’re tired of working on it

Phill