Christian Osgood and his partner Danny skip deals with serious foundation problems because repairs are unpredictable and expensive, conflicting with their ultra-low-risk strategy. They'd only consider one if the seller fixed it before closing, which rarely happens. The participant decides to pass but will finish the analysis to learn.
Chapters
So quick question, I'm going to go over the frat house tomorrow with the group, but it has, according to Steve, my inspection guy, he did an inspection there, which he said it has significant foundation issues. Ooh, I don't like those. Me either. And so it's like from one picture, it shows that you're going to have to trench out around the basement and build new basement walls. And the other picture says, no, you can just get the crack fixed. So is your policy like you just stay away from it altogether or do you Is it give or take depending on how much it would cost? Because I'm leaning towards stay away from it altogether. I'm just going over the deal because I promised everyone I would.
Yes, my, so my general policy, and this advice does vary, so I'm going to give you a direct answer and then I'm going to give you a caveat. Direct answer, when it comes up and it's foundation issues, Danny and I just say, hey, you know what, let's just not deal with it. I don't want to roll those dice. It's just one of the, like, major roof issues, major foundation issues. They're the ones that seem to just get runaway expensive on occasion. Really hard to predict your cost. So if we find significant foundational issue, I'm out. I'm just not a fix foundation guy. It's not part of my business model. That being said, if you had an amazing deal and you found foundation issues and you negotiated the fix of it, the way that I would deal with it is, hey, this needs to be fixed prior to close. That reduces your risk a lot. The odds of them saying yes to that are relatively low. Uh, most people are trying to get rid of a property, do not want to do a major foundation project before they sell it, but it's going to come up in every inspection. It's going to make it really hard to sell. So they might— that's the most correct answer. But for me personally, I love hyper low risk, moderate to moderately high reward. That's, that's my perfect risk profile. Foundation issues automatically take it out of ultra low risk. And so for me, I— Danny and I don't do those deals intentionally.
Okay, well, if you do want to take a look at it, I sent it to you. Okay. I already got my answer. I'm not going to move forward with it. I'm just going over it. I will still do the underwriting because there's always a good lesson in there.
