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Nixon Vayupak
  • Diamond Bar, CA
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Why do some Real Estate owners keep abandon property?

Nixon Vayupak
  • Diamond Bar, CA
Posted Jul 24 2014, 10:54

Few weeks ago, I went driving for dollar in this mid-low class neighborhood in Los Angeles.  I came across an abandon rental property, which has 5 units on them.  I've done my research and found out the following:

1. The owner purchased the property back in 2007 for $200K

2. The owner has been cited by the city and fined every single year in regards the abandon property.

3. All units have been boarded up

4. Graffiti, broken glass, major property damage on all units.

5. Recent zoning is now LAR1 (Residential Only)

The place is a complete dive, but yet I see major opportunity if fixed up correctly.

With that being said, I was able to find the owner and reached out to him and see if he is willing to let it go.  Owner informed me that he was offered $1 million last year and did not take the offer.  He is not sure if he wants to fix it up himself, but willing to wait and see the proper offer. Also, he indicated he is very well off with his other property.  But then he started complaining to me about all of his bad tenants in LA and gave me a life tip "Don't be a land lord in LA".  I really think this person is very unusual.

As of now I really don't understand, why this particular owner is not willing to do anything to it and willing to let money fly by.  As for the comps, you can not really do a comparison, since there is nothing similar to property in a 2 mile radius.  There are apartments which sold for like $3.5 million near by and it can by justify since there are tenants currently there. Few homes sold near by and at most sold in the low 600K. 

Why are there people like this guy willing to sit and wait and wait?  Is it really worth it? If he sells now he make more than what he purchased it for.  Is there some type of strategy to abandon property?

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