From Concrete to Cash Flow: Bob Brown’s Foundation Repair Secrets and Real Estate Journey - REIA 455

Welcome to Real Estate Investing Abundance, the show for busy, fulfilled professionals like you to learn how to develop financial independence built on solid passive real estate investments. Now here is your host, Dr. Allen Lomax.

Hello, enlightened investors, and welcome back to Real Estate Investing Abundance. I'm your host, Dr. Allen. And it is a delight as always to have you with us. And we have an enlightening topic for you today. We are going to look at Don't Let Your Escrows Fall Through the Cracks with RK Bob Brown. Bob Brown's journey from college student to foundation repair expert is a testament to hard work and determination. Despite facing challenges, he began honing his skills by doing concrete repair While studying. His dedication, even driving with the heater on in scorching summer to keep his truck running, demonstrates his unwavering commitment to his craft. Over time, Bob's expertise expanded, leading him into the world of foundation repair, cumulating in the publication of his book, Foundation Repair Secrets. His story is a reminder of the power of perseverance and passion in achieving success. So, Bob, welcome to the show and take us into the show and just share a little bit about who you are and how you came to be working in foundations and also investing in real estate.

Good morning. Yes. So, I originally was doing concrete repairs, and I was contacted by a national supplier distributor of foundation repair products who asked me to be their installer in Phoenix. I didn't really know that much about foundations, so I learned from them. And eventually, I knew a lot of engineers because of my degree in architecture, and I knew a lot of engineers, and I talked to them, had lunch, picked their brains. And eventually I started to realize that there's a little more to it than what my distributor supplier was telling me. And so I began a lifelong journey of trying to understand really soils and structures and how they interact, which is how I got my nickname, the Dirt Whisperer.

Well, fascinating indeed. So What is it that you can share with us, that with our audience, that you are doing better than any other investor?

Well, I don't know that I'm doing a whole lot better. I mean, I've just kind of done it the hard way. I bought properties and held on to them. And I have a lot of rental houses. I have 9 rental houses and 3 small industrial properties. My first property, investor property that I bought, was a house in back of my house. And that was interesting. I was noticing the telephone company vans coming and going from this house. I thought that was kind of strange all the time. And I realized that it was not really a house. It was a switching station.

Hmm.

And I needed to use a little bit of carport space that they weren't using. So I called them and I said, hey, can I lease that carport space? And they said no. Because we're going to sell the house. And I said, oh, well, how much do you want for it? And they said $13,000. I said, sold. I bought the house. Didn't have— it wasn't really— didn't have any walls on the inside, no plumbing, no, you know, nothing. I had to kind of rebuild the entire inside of the house, but it was still a good deal for me. And I operated my business from there for many years. And then after that, I— after I outgrew it. I turned it into a rental house and became one of many.

Okay. Well, interesting. Well, let's talk a little bit about foundations because most of us are pretty ignorant about those. So first of all, what are the key distinctions between foundation repair contractors and structural engineers in terms of their qualifications and their expertise?

Yes. And even more than structural engineers, Geotechnical engineers and forensic engineers. So those are some distinctions that make a difference. So foundation repair contractors are easily found. You know, people have cracks in their walls and doors and windows out of square. So the first thing they do is Google foundation problems or foundation repairs, and up comes, guess what, the foundation repair companies. And I was a foundation repair company for, You know, 35 years, and but I also owned a forensic engineering company, and certainly know the difference in in how they operate. And foundation repair companies typically will send out a commission salesman, 100% commission, no salary, and their job is to find lots of work. And these guys are not. educated in engineering. They don't understand soils, they don't understand structures. They might have been a car salesman, you know, before or something like that. I had a lot of salesmen that worked for me that were fitness, gym fitness sales guys, and their knowledge is limited. I mean, I'm not saying sales guys don't have a place in life, but But when it comes to diagnosing and recommending products, which is an engineering function, they don't have the qualifications and they're severely conflicted.

And so what kind of— and I mean, you're just saying that they are trying to sell a product. And so they go out there and they look for issues that really may or may not be the real issue that the homeowner is having. is dealing with. So what, uh, I guess what would be— what would an engineer, a forensics engineer, be looking for rather than what the salesperson is looking for?

Well, there's a number of functions that need to be covered to do a real good foundation investigation. Uh, first of all, a good floor plan needs to be drawn up. And a floor level taken. A floor level is where you take an instrument called a manometer, and it's a staff with the, you know, tank water and a tube and a staff with the ruler on it. And you take this staff around and you record the levels of the foundation in all the rooms of the house. And then you can load that into a topological program that basically prints out topo lines like in a mountain map. And that tells you where it's high and where it's low. And you can easily see patterns by looking at that. And then you can combine that with damage, like a damage map survey. And you can see, oh, there's a lot of damage in this one area of the house and it's low or it's high there. And you start to understand it a little better. And then if you have pictures that are labeled, On the floor plan. So picture number 13 is in the kitchen looking at the sink. Now, you know, when you look at that picture, oh yeah, it's that area. And by the way, that area is high or low, or it's the edge of a high or low. It's where the breaking point is. You start to understand things a little better. Those are some common things, but there's about 17 of them that I outline in my book. Things such as knowing the soils of the neighborhood, understanding the, the annual rainfall. Looking at aerial photograph maps, those kinds of things all start to bring the picture in a little better, and an engineer is going to do those things over time because some of this data has to be gathered over the internet. And foundation repair contractors are just going to go into the house, visually look around. They might do a floor plan, they might take a couple of readings with the manometer, and that's about it. And that's, that's severely lacking. You could make a lot of mistakes that way.

So how can a homeowner and investor ensure that they are receiving a thorough foundation inspection, particularly in light of the varying methodologies that even different engineers could be using?

Sure.

And by the way, a lot of engineers may not be qualified to do this kind of work. Most engineers work in building infrastructure for dams or sewer systems or water systems or commercial buildings or mines. Most of them work in the commercial sector doing infrastructure kinds of things, and they might you know you might know one, you know a cousin, you might have a cousin or something. Those guys are not going to do a good job. You know it takes a forensic expert that does forensics every day, and How do you know if they're really doing a good job? Well, I outline in my book, you know, the 17 things that need to be done. And, and you can sort of make sure that they're covering all the bases for you if you understand the things that need to be done.

So 17 things, that's an extensive list of items to go through. What are the 3 most critical aspects on your list of 17?

Well, most critical is probably a floor-level survey with a topo map and a damage map and photographs. The kind of the 3 things that I mentioned at the beginning, those are probably 3 of the most important. But as I point out many times, there is no silver bullet. If you just do a floor-level survey or just the map or just pictures, your chances of getting it wrong are High. You, you know, you might have 8 pieces of data that point one direction and 10 pieces of direction— well, that's 18, but 9 pieces of data that point in another direction. And you have to sort them out and see if you understand them. And sometimes the balance of information is what helps you make a good decision.

Well, what, what would determine whether or not it is practical and feasible to actually go in and start doing a foundation repair? How do you know, I guess, when it is time to actually take action?

Well, practical and feasible are good words because just about every foundation can be repaired. Now, there might be some really, really horrible ones that you could repair, but It may not be economically feasible to do that, and and I've seen a few of those—not very many—it's pretty rare—a couple of foundations that were 12 inches off, you know, and and but but ultimately you're going to look for those signs of stress we talked about earlier. You you want to look for cracks in your walls. Typically, drywall is a better indicator on the inside than cracks on the outside because the cracks on the outside are subject to. Thermal heating and contraction and expansion from, from thermal cooling and heating. On the inside is temperature controlled. So the cracks are more likely a result of other things besides temperature. But cracks in the floor and doors and windows out of square. If you have a door that's sticky and it's out of square and windows. Now, any one of these by themselves, by the way, Probably not too much, right? But, but you want to look at the pattern. In this business, we always look at patterns. If you have a grouping of them, if you have cracks in your walls, sloping floors, you know, maybe cracks in the floors and windows and doors out of square, you have all that. Well, you probably need to call a forensic engineer and get, and get a good investigation going, because then he can start to make sense of it. And by the way, It's not always just settlement. You have expansive clays that swell up when they get wet and push portions of the house up, including the foundation. Very powerful force, can break concrete and bend steel.

Mm-hmm.

You might have expansive soil heave, and you might not need any piers or any of the typical products from foundation repair because it's a different kind of problem.

So older homes, you know, 100-year-old homes, were on rock foundations essentially. So lots of issues in conjunction with that. What do you recommend in that kind of situation? Do you just say do a whole new foundation, or do you fix and repair, or what do you do in those situations?

It might depend on what kind of distress and what kind of performance you're getting from that foundation. Sometimes rock foundations, if they're, if they're on good soil, could actually perform well. The key is understanding the soil and its effect on the foundation. You know, if you have a rock foundation, you know, on a 100-year-old house and it's in really stable soil where the water has been controlled for a long time, You may get really good performance out of that, but changes in moisture is usually the catalyst that causes the problems. Not necessarily moisture. If it's the same moisture, it's probably not going to do much, but changes in that moisture is what causes the soils to react in different ways. And that's what can cause problems. And so if you have a, if you have a rock foundation, Well, and it's not performing well, then you, you might be looking at some difficult choices. One choice that might work well for a rock foundation that's not performing well, maybe it has settlement problems, is to do what I call compaction grouting or intrusion grouting, where you might grout the soils deep, maybe 20, 30 feet, and raise all of the soils in an area that raises the rock foundation With it, maybe from a, from a deep depth of 20 feet. And that way you keep the, the soil, the rock foundation together, because normally you couldn't really underpin a rock foundation with piers. It's not stable enough. It would fall apart when you put a bracket on it and tried to lift it, right? So, so maybe compaction grouting might be the tool if you had a poorly performing rock foundation.

Enlightened Investors, if you haven't done so already, be sure and click that like button and also click that share so others can take advantage of the content. And finally, be sure to subscribe so you don't miss a single one of our upcoming episodes. Well, lots of complexities there. And certainly I can see why you would want the experts to be involved in that before making any decisions. Their expert advice might actually cost you more money in terms of getting a decent foundation in there, but it's very likely that they could also save you a great deal of money.

I think more often than not, you'll save money. Now, foundation repair companies will do the investigation for free. An engineer's not going to do it for free because they don't, you know, they're not going to get the benefit of having a large job pay for it afterwards, right? But it may turn out that all you need to do is fix the draining and grading, grading and drainage, which is a really cheap product project. So, or it may be that, hey, this is not a really bad problem. You know, one of the problems in the foundation industry is how do we recognize how bad it is? People, people, the first thing they want to know is, hey, how bad is this? What should I do? Is it bad enough? Is it? Is it going to be a serious problem, or is it not a serious problem? Well, you know, foundation repair contractors or sales guys, I've heard them say things like, oh yeah, like on a scale of 1 to 10, it's like an 8.5. And I'm thinking, okay, like what scale is that? Is that like the Richter scale of foundation repair? What is that? You know, it's nothing. It's just some made-up BS. To kind of help them make a sale. There are there are objective measures of foundation performance that are performed by engineers: tilt and deflect, tilt more than 1%, and deflection more than L over 360. So those are those are standards that engineers can use that they know about, that they can say, okay, this this does or does not, and and quite often it may not. I mean, the engineer's got no skin in the game. If it's not, he's just going to say it's not a big deal, don't worry about it, you know. And specifically, a geotech engineer might be able to say, hey, the soils look pretty stable, it's probably done moving, or it's a good chance if it's done moving, or no, this is a really tough area and you're going to have a lot of problems and, you know, you need to take some action, right? But you want that from an expert who really understands all the factors, not from a sales guy trying to make a sale. Yeah.

Well, we are talking with Bob Brown today, and Bob, tell our audience the best way to get in touch with you. Well, I'm on social media.

You can look up under YouTube under Foundation Repair Secrets, or you can go to my website, which is the same name, or my book, which is the same name. You can also reach me by email at bob@tengsol.com.

Well, Bob, in your experiences with investing, tell us what are the opportunities that you're finding today in real estate that other investors are not finding?

Well, at this stage in my career, I'm probably not doing that much finding nowadays. I've managed to sell my company, both my engineering and foundation repair company. And so I'm probably doing less managing because my wife doesn't want to keep doing the managing. And but I can tell you that as an expert, I've often gone into properties and, and bought them understanding that, hey, this is a heave situation and I can solve this with, with grading and drainage. And I don't need, you know, $80,000 in piers to fix it. And maybe other people don't have quite that insight, right? And so I've been able to do that kind of stuff.

Well, that sounds like a valuable insight, which any investor could take advantage of if they just contact a forensic engineer and, and have them provide them with that. Going back to foundations and what is it that homeowners and investors can do to ensure that they are getting the protection from their insurance companies? Uh, to deal with these particular issues, or do insurance companies, uh, provide solutions for these things?

Uh, typically they don't. And the reason why is because almost every insurance policy has a, what they call an earth movement exclusion. And what that means is if the problems in your house are caused by earth movement, then we don't cover it. You know, they get a gazillion claims that pretty soon they go to their lawyers and say, hey, how can we get out of all these claims, right? Oh, we'll put in an earth movement exclusion. But there are cases I've gotten insurance companies to pay for foundation repairs. And the way we did it is we— There's also a maximum that if the problems are sudden and catastrophic, Then it might be covered by insurance. If they go on, if they take you know ten, fifteen years to manifest themselves, yeah, probably not, right? Well, if you have a pipe break under a house and it causes all kinds of problems in a hurry, well, that's how I got insurance to pay for it. I got several independent engineers out there to document the problem, to to. To find the leaks, the leak detecting services, and document all of this and brought it to my insurance company, and and and they paid for it. Now, often insurance companies will send out their own engineer that works on behalf of the insurance company, and of course is looking out for the insurance company, and they will tell you, oh, this is a long-term problem and been. And report such to the insurance company, and then you're in for a long fight and a tough fight, and it'd be tough to win. Maybe, first of all, you should have floor levels that document the house as a baseline. And then you've got some good evidence that if a pipe break or some sort of weird thing happens, right, in a hurry, then you can compare that data and say to the insurance company, the engineer can say, hey, look, you know, here was the baseline, here was the shape of the house. before, and then after the incident, here's the shape of the house caused by this problem. Much easier to, to make that argument win. Still going to be a tough fight, depending on your insurance company.

Yeah. So if an investor homeowner have a property and the soil becomes a problem and you can't fix it with drainage, And it is really a problematic soil. What is their best course of action?

Well, first of all, you know, get a good, honest, unbiased, objective report from a forensic engineer. That'll— that, and that guides you in the right direction. I've seen this so many times where a poor old homeowner has one contractor come in and say, oh, you need 13 piers over here, and another contractor says, no, you need 12 over here, and another one says, no, you need 25 all the way around. I mean, how, how's a homeowner supposed to figure out which one's right? I mean, it's crazy. They don't. They're not experts. And, uh, often they'll go with the guy that they're most comfortable with, right? Which is probably the best salesman, which is probably the least effective engineer of, of the group, because good engineer personalities are kind of opposite of good sales personalities, to be honest with you. And so, uh, if you go to an engineer first and get a good plan where the engineer says, hey, you know, put in 14 piers right here, go get 3 bids for this, now you can say to your contractor, hey, engineering's already done, bid this. Bid this, bid this, get 3 bids. Now you can understand each bid and evaluate it based on other factors besides their bogus engineering.

Well, Bob, it's been a delight having you. Very enlightening conversation today. Viewers and listeners, you can find Bob's book on Amazon. Is that correct?

Yes.

Yes. And, uh, once again, what is the title of your book?

Foundation Repair Secrets.

And where can we find you online?

bob@tangsoil.com is my email, but you can find my YouTube channel, uh, you can find me on Facebook, uh, you can find me just about on all the social media.

Well, Bob, thank you so much for being with us today. It's been a pleasure having you. And Enlightened Investors, thank you for being with us once again today. And if you enjoyed today's show, please take a moment to like, share, and subscribe. And please head over to your favorite podcast app, leave us a rating and a review, and we will be immensely grateful. Until next time, live abundantly in all areas of life, and I'll see you in the next episode.

Great, thank you.

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