Got a lead for a property, but it's in a war zone...

I got a call from a lady with a four family, but it's in a neighborhood where one house can be $300,000 and another can be $40,000, it's close to Over The Rhine, which is a pretty scary part of the city. It's in Cincinnati. I haven't called back yet, so all I know is that it's a 4 family, with off street parking. Not even sure if the numbers will be good, but this is my first call I've received from my "We Buy Houses" ads, and I'm nervous! I'm unsure if I should even do the deal if the numbers are good, because of the location of the house. If I decide not to, how do I tell the seller that their deal just won't work for me? Is there any other option I could recommend to them, maybe to a Realtor?

Jason Davis

Rehabber · Powhatan, Virginia

190 posts
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May 27 '11, 06:22 AM

A war zone ?

I use to live in Hyde Park, right on Edwards, near the tracks.

Parks of Over the Rhine are bad, parts have great architecture and is awesome. Don't make to early a judgement. You could make a he'll of a deal. You need to know numbers, rents, expenses etc.

Call her and get details!

Account Closed

63 posts
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May 27 '11, 06:30 AM

Just because the numbers work doesn't mean it's a good deal if it's in a war zone. There are other things to consider when the location is less than ideal. Do a search in the forums. I know many an investor that pass on homes in these areas including myself. Don;t try to make a deal just because you are ready and you want a deal. I'm about to close on my first property and took over 3 months to get here. It'll happen. Wait for the right deal.

Sierrah Fanth

Real Estate Investor · Apple Valley, Minnesota

29 posts
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May 27 '11, 06:44 AM

Although the only risk of getting an option to buy on a property is having wasted time and a laugh from local investors, it is important to get comps on the property (due diligence comparing nearby sales and to see if it is a good investment).
In Minnesota, we have similar markets such as North Minneapolis. While one block of houses may be in popular demand, houses on the next block may be sitting with no offers for months.
This kind of investing does require a certain level of knowledge (ask me how i know :) )If you are completely unsure of how to go about seeing if its a deal or not & how to communicate with the seller, my opinion is that I would put together a bird-dog contract that says _____ will supply this lead to you, and if it becomes a deal, you will pay me 200$. (100-500 Dollars is the going Bird-dog rates around where I live.) And then seal the agreement with another more experienced investor, and if & when the deal closes, that investor will owe you the amount agreed upon.

Congrats to taking action!

Edited: 05/27/2011 at 06:50AM by Sierrah Fanth

Maria Garcia

Real Estate Investor · Cincinnati, Ohio

2 posts
50 influence

May 27 '11, 07:03 AM

Okay, I called her (YAY, my first call!) Wasn't as bad as I thought. I'm completely new to this so sorry if it's obvious, but she said he home was in foreclosure. She said the foreclosure has already been rendered by the judge. Doesn't that mean it's final and I can't even try to get it? She is still listed as the owner on the county auditor website. She owes 19,500 in back taxes... but the building is valued at 178,800. What could I do?

Steve Babiak

Real Estate Investor · Audubon, Pennsylvania

4,267 posts
14 awards
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May 27 '11, 07:18 AM

Originally posted by Maria Garcia

... she said he home was in foreclosure. She said the foreclosure has already been rendered by the judge. Doesn't that mean it's final and I can't even try to get it? She is still listed as the owner on the county auditor website. She owes 19,500 in back taxes... but the building is valued at 178,800. What could I do?

Sounds like your state uses judicial foreclosure, so I would expect that the property would be scheduled for an upcoming Sheriff Sale in the county where it is situated. Until the Sheriff Sale actually sells the property to a lien holder or to a third-party buyer, the deed does not change ownership.

And with Sheriff Sales (and foreclosures in general), the property owners can use many tactics to postpone the actual sale and drag things out ...

Michael R.

Real Estate Investor · New York

304 posts
3 awards
51 influence

May 27 '11, 08:08 AM

All my properties are pretty much in war zones. I know some caution against it but I been doing it for years and am used to it. Cash flow is great and I own most free and clear. Tenant screening is the key - I have many long term tenants and it keeps headaches down. I also prefer 2+ unit properties in rough areas so if one side is empty the other side will still be occupied. This cuts down on the pipes and furnace walking off.

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