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Forums » General Real Estate Investing » Abandoned Property Questions

Abandoned Property Questions

25 posts by 9 users

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· Coconut Creek, Florida


I'm getting into more of a niche for abandoned properties and distressed properties. I just found an abandoned property that caught on fire a year ago and has been abandoned ever since according to the neighbor. I'm now in the process of figuring out who owns the property. Does anyone have advice on what I should do to complete this deal so i can rehab it and sell it?



Wholesaler · Baltimore, Maryland


Originally posted by Brittney Taylor:
Does anyone have advice on what I should do to complete this deal so i can rehab it and sell it?

That is a broad question. It helps to let readers know what you've done, or what you plan so we have some idea of what might help.

I'll take a crack at it anyway
1) Find who owns the property, often property records are online. Try http://publicrecords.netronline.com/
2) Find and contact that person, the process is called a skip trace. Google it and you will find plenty of help.
3) Ask if they are interested in selling
4) Negotiate a deal
5) Get it under contract
6) Market it to resell it

That is the general process. Pick a step where you need help and we can give more specific advice - Good Luck, Ned


Small_crab1_copyNed Carey, Crab Properties LLC
Website: http://baltimorerealestateinvestingblog.com/
http://baltimorerealestateinvestingblog.com/


· Coconut Creek, Florida


Thanks Ned. The part I left off at is #2. I found out it'e the bank that owns the property. I dont have the number to them yet but it won't be hard to find. It's Bank of America. My Question is how do I negotiate with the bank. I am new to REI and I haven't spoke to a homeowner as yet much less a bank. So If someone can walk me through the steps of how typically working with a bank is done. That would be helpful.



Wholesaler · Baltimore, Maryland


Move on to another property.

I dont have the number to them yet but it won't be hard to find. It's Bank of America.

That number will be VERY hard to find. You can find A Number for Bank of American the try to find the correct number for the person that has the knowledge and authority to talk about that property is a totally different story.

Beside banks almost always sell properties through agents. The larger the bank the more likely they are to blow yo off and say "watch for when it is listed"

You will be better served by moving on and finding an easier deal. Tracking down owners of vacant properties can be very profitable. It is one of my prime deal finding methods. Working directly with large national banks however can be done but it is not an easy route.


Small_crab1_copyNed Carey, Crab Properties LLC
Website: http://baltimorerealestateinvestingblog.com/
http://baltimorerealestateinvestingblog.com/


Residential Landlord · Hampton Bays, New York


@Brittney Taylor, I own a fire damaged property in Dayton and while my experience may not be representative it may be helpful. Many municipalities are holding back a portion insurance proceeds from fire damage claims that are settled by insurance companies. the reason for this is that often the damage is substantially more expensive to repair than the proceeds allow for and the market and many properties are abandoned. The city holds money to pay for demolition if needed. I intend to fix the property I own but it will result in a break even proposition for me in that I can by another property without the risk of a rehab and the loss rents inherent in a long project with cost overruns. I am heavily invested in the neighborhood and will do this to do my part in maintaining the area but from a pure financial analysis I would be better served by bulldozing the property.

If you are going to make offers on fire damaged property you need to be aware of the likely rehab costs some of which will not be apparent. I my case the smoke damage has caused damage and mold to grow behind the walls which must be demolished and replaced. You need to become an expert at what needs to be done if you are going to concentrate on fire damaged properties.

If you have the energy and the expertise you may try contacting the city you want to invest in to find the owners who have money being held for this purpose. I know that if someone contacted me I would gladly entertain offers.



Real Estate Investor · Central Valley, California


Originally posted by @Michael Lauther:
Brittney Taylor, I own a fire damaged property in Dayton and while my experience may not be representative it may be helpful. Many municipalities are holding back a portion insurance proceeds from fire damage claims that are settled by insurance companies. the reason for this is that often the damage is substantially more expensive to repair than the proceeds allow for and the market and many properties are abandoned. The city holds money to pay for demolition if needed. I intend to fix the property I own but it will result in a break even proposition for me in that I can by another property without the risk of a rehab and the loss rents inherent in a long project with cost overruns. I am heavily invested in the neighborhood and will do this to do my part in maintaining the area but from a pure financial analysis I would be better served by bulldozing the property.

If you are going to make offers on fire damaged property you need to be aware of the likely rehab costs some of which will not be apparent. I my case the smoke damage has caused damage and mold to grow behind the walls which must be demolished and replaced. You need to become an expert at what needs to be done if you are going to concentrate on fire damaged properties.

If you have the energy and the expertise you may try contacting the city you want to invest in to find the owners who have money being held for this purpose. I know that if someone contacted me I would gladly entertain offers.

Michael: you're the only person I've ever heard this happening to. Although I can imagine a lot of munis wanting some security that the damage will be remediated, I don't understand how the city gets the funds. Does the city have access to withholding on your insurance claim? And if so, how? Is the city named as an additional insured somewhere? Either on the policy or mandated by some city law? Does pulling the permit trigger this withholding?



· West Palm Beach, Florida


Brittney, stay away from fire damaged properties. It will need repairs that even experienced people will miss.



Residential Landlord · Hampton Bays, New York


@K. Marie Poe this is common practice in many cities that have low price housing. Dayton has a program administered through the building department that takes a Percentage of funds paid out on claims and will refund upon completion and inspection of repairs. The problem occurs when it is cheaper to buy existing inventory than repair damaged property. Many landlords just walk away with the insurance proceeds. In my case I can replace the property for $20K but the repair will cost $25k. When the market rebounds the property will be worth $35 K bu that may take some time. Since I am out of state I prefer not to take on major renovation so it would probably be worth to a local investor to make me an offer and take the property off my hands otherwise I will repair and rent to section 8 for 625 month the taxes are around 1100 and insurance will be 60 a month. The market in Dayton is still loaded with properties in need of repair but the economy seems to be improving. The Air-force Base is a major employer so the recent political turmoil will impact the area.

a percentage of the claim was sent directly to the city to hold. It amounted to approx $3300 on a total loss paid of $25k and this included loss of rent.



Real Estate Investor · Union, New Jersey


Originally posted by @Michael Lauther:
@K. Marie Poe this is common practice in many cities that have low price housing. Dayton has a program administered through the building department that takes a Percentage of funds paid out on claims and will refund upon completion and inspection of repairs. The problem occurs when it is cheaper to buy existing inventory than repair damaged property. Many landlords just walk away with the insurance proceeds. In my case I can replace the property for $20K but the repair will cost $25k. When the market rebounds the property will be worth $35 K bu that may take some time. Since I am out of state I prefer not to take on major renovation so it would probably be worth to a local investor to make me an offer and take the property off my hands otherwise I will repair and rent to section 8 for 625 month the taxes are around 1100 and insurance will be 60 a month. The market in Dayton is still loaded with properties in need of repair but the economy seems to be improving. The Air-force Base is a major employer so the recent political turmoil will impact the area.

a percentage of the claim was sent directly to the city to hold. It amounted to approx $3300 on a total loss paid of $25k and this included loss of rent.

Michael Lauther - I'm with K. Marie Poe on this as this is a first for me as well. I read what you're saying but this doesn't explain how exactly does the city stake a claim to the money. Do they file something against the title? Hold up permits? I can't imagine that they are listed on the policy as one of the insured. It's not clear to me how they just "take a percentage paid out on claims". What legal right do they have to do this?

Also, I've never heard of smoke damage causing mold. I've dealt with a few fire damaged properties and maybe I didn't pay enough attention to what my contractors were doing so please explain. Unless you're saying that the water from the fire department putting out the fire led to the mold.

Thanks sir.



Real Estate Investor · Union, New Jersey


Originally posted by Brittney Taylor:
Thanks Ned. The part I left off at is #2. I found out it'e the bank that owns the property. I dont have the number to them yet but it won't be hard to find. It's Bank of America. My Question is how do I negotiate with the bank. I am new to REI and I haven't spoke to a homeowner as yet much less a bank. So If someone can walk me through the steps of how typically working with a bank is done. That would be helpful.

See Brittney - 'Free' Mentors :)

I always say that with abandoned properties you must assume NOTHING and confirm EVERYTHING. How exactly do you know that the bank owns the property? Did you actually look up the deeds connected to this property and see that BOA took possession? That's really the only way to know for sure.



· Coconut Creek, Florida


Yes I checked through county records and it shows Bank of America as the owners since January 2012.



Residential Landlord · Hampton Bays, New York


@Ibrahim S and @K. Marie Poe, To answer how the city obtained info on the fire and attached the money, the city pulled the water meter and the insurance company paid the city directly. I applied for a building permit but have not repaired the property. Yes the water from the Fire departments putting out the fire caused mold partly a function of my delay in ripping out the damaged dry wall and plaster. Also smoke damage even in parts of the structure that were not burned because smoke got behind the walls and to fix this the sheet rock and plaster needs to be removed down to the studs. There are some area upstairs that can be salvaged but the entire first floor must be taken apart. I believe I have two years to claim the funds which will be returned when I get the new Certificate of occupancy. There was another BP member who experienced the same situation I would have to check my notes from when I posted about the fire to update his experience.

My advice therefore regarding this post is that while there is opportunity in acquiring property damaged by fire, look carefully and make sure you understand what this type of rehab requires.



Residential Landlord · Hampton Bays, New York


@K. Marie Poe i checked my notes and we had discussed this question of what to do with a fire loss with Ed O in my post from May of last year. He also had a loss and was helpful to me at the time. I can see a real opportunity with this kind of distressed sale being on the other end. I am too far away to effectively handle the rehab and a good contractor with knowledge of how to handle this kind of loss could make a profit on the situation whereas I will be lucky to break even. So once again @Brittney Taylor I am not saying to walk away but understand the opportunity and risk.



· Coconut Creek, Florida


Yea Michael, I think that's what I'll do for sure. Soon as I get access to get in I'll have a contractor to come with me and tell me how costly the repairs will be to see if it will be worth my time. I'll also look into the potential of insurance money floating around.
Thanks everyone for your help.



Rehabber · Pearland, Texas


@michael are you referring to Dayton, Texas?



Residential Landlord · Hampton Bays, New York


@Chuck Redman no I am investing in Dayton Oh, never new there was a Dayton Texas.



Rehabber · Pearland, Texas


Yes it is just outside of Houston



Residential Landlord · Hampton Bays, New York


@Chuck Redman good to know chuck, be well and good night.



· Chicago, Illinois


Brittney,

I invest in these kinds of properties occasionally but I wouldn't advise a beginner to work on this kind of deal out of the box. As many others here have pointed out there are lots of places for this to go wrong and unless you are prepared to deal with the difficulty regardless of where it comes from I think you should do something else first.

That said-- there are serious don't-wanters out there. I typically buy at less than the tax proration so they are effectively paying me to take the property.

@michaellauther. I am interested in your Dayton transaction. Would you be willing to pay me the demo costs to take the house off your hands? What part of Dayton is the property in? I grew up in Dayton and still have family there. Is a vacant lot in that part of town worth anything? I have, on occasion sold the vacant lot to the neighbor for additional yard. I am even working on a transaction where we may build a public park on the land and hold it waiting for the neighborhood to improve.



Residential Landlord · Hampton Bays, New York


@mark tried to respond on I phone will wait till I get back to my computer . Thanks for the interest the property is at 408 Sheridan ave Dayton Ohio 45403 I am on talks with a local contractor who wants to repair and take 50% of the rental profit plus a 10% management fee and 50% of the profit upon sale . It would be a good deal for me if I was convinced he could perform his end. Would be interested in your opinion regarding options





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