Buying & Selling Houses

I Checked Out a Drug House So You Don’t Have To (With Pictures!)

Expertise: Personal Development, Business Management, Real Estate Marketing, Real Estate Deal Analysis & Advice, Real Estate Investing Basics
70 Articles Written

In real estate, you often have be flexible, and that sometimes this means buying homes that you would normally never ever consider. This is especially true right now in the Dallas Fort Worth market, as inventory months of supply is less than 3 months.

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I once had a colleague who was a former marine deployed in Iraq & Afghanistan tell me there have been house appointments where he had felt more unsafe than in a red zone with snipers. Now, I wasn’t sure how serious about this comment he was at the time and brushed it off, but after this appointment, I think there may have been some truth to that statement.

Related: How to Keep Your Tenants from ‘Breaking Bad’ in Your Properties

Setting the Stage

Let me mentally paint a picture to try and describe how rough of an area this was.

As I started to get within 15 minutes of the property, right away I knew I was in a tough area. Many of the commercial buildings were boarded up, some of which looked abandoned and vandalized. Meanwhile, dilapidated homes lined the streets with wavy roofs, exterior paint peeling, boarded windows and pitbulls in the backyard.

This is not the type of area where you want to get out of your car if you have any choice in the matter.

How I Found This Property

This particular lead was a referral from my website. She described the situation, fairly typical of a probate scenario, where there were several siblings, and they were not getting along with each other on how to settle the estate.

One more thing — the house was at one point a high traffic drug house. You know, the typical stuff.

This type of property was definitely far and away from what I would consider in my “wheelhouse;” right from the get go, I was thinking WHOLESALE for the exit strategy. For this probate property, one of the brothers had been living in the property, but had really let himself as well as the property go. One day, while he was getting high, his “friends” stole practically everything from home, ranging from refrigerators to the AC system. In addition, they gutted the copper wire and even some fixtures like ceiling fans.

Despite the seller trying to warn me of how much work the house would need and how rough the area was, I was still ill prepared for what I would see on the actual appointment.

On the phone she described the house as “a black hole that absorbed light even during daytime hours.” She recommended bringing a flashlight or two. I researched the area a bit more and found it was even more of a war zone than I previously anticipated, located in a very rough area of Dallas.

The seller was so apprehensive about visiting this property that we contacted the Dallas Police to set an escort for the day — in addition to her brother accompanying her for the appointment.

The Appointment

When I arrived at the property, as I typically do, I drove the comps and tried to get a rough idea of what ARV was before even stepping foot on the property.

As I was tallying up the repair costs in my head, all sorts of red flags started to go off. And I quickly realized that the numbers would not make any sense for most buyers. To give you an idea, the Tax Assessed value of the property was only about 37k.

The inside of the property solidified the decision for me. It was just not something that fell within my buying criteria. Take a look for yourself:

realtor fort worth house snap 01 realtor snap 02  fort worth

Finding a Buyer

Lucky for me, I have a handful of colleagues who buy very unique homes just like this. Remember, not every investor operates on the same margins or has the same type of exit strategy. You can sell anything anywhere if the price is right.

Related: 7 Signs You’re Entering Into a House Flipping Disaster

This particular property was sold to an investor who frequently bought in that area. He would buy these properties, clean them out just a little bit, do a very basic rehab (just barely livable) and would then sell the houses via owner finance. The seller would then finish the repairs on the homes themselves.

The Moral of the Story

Stay safe. Make sure you always at least text or call a loved one to let them know where you are going to be.

In addition, I share my Google Document Calendar with my wife that lets her know exactly where I will be throughout the day in case of an emergency.

What’s the roughest property you’ve considered investing in? What do you do to ensure your safety when visiting homes?

I’d love to hear your stories — please comment below!

Chris is an active real estate investor who buys and flips houses in the Dallas real estate market. He enjoys helping others along on their journey. In addition, Chris operates as a licensed Realtor in the Dallas-Fort Worth area.

    Replied about 5 years ago
    I have seen those types before too. Even bought five four-plexes in an area like that. But luckily, I became president of the HOA and cleaned up the area. If you cannot make a change for the better, you have to get a huge cash-on-cash return, well over 20%. many investors do not understand the risks of renting in an area like that.
    Chris Feltus Residential Real Estate Agent from Fort Worth , Texas
    Replied about 5 years ago
    Hey Eric, You are correct, the lower end of tenant quality and higher turn over costs must be accounted for and it can be difficult to rent out units like this. Usually takes a very specialized type of investor to do it successfully. But as I mentioned in the case study, this particular investor was mostly hands off and owner financed the property after doing very little work himself. His returns were quite good.
    Replied about 5 years ago
    The other side of the coin is the house will need little or no repairs to secure the next drug dealer tenant. When the US government finally throws in the towel on the war on drugs, what excuse will we create for people still living like this?
    Replied about 5 years ago
    Thank you Chris for this post. You must have known that this wasn’t up your alley before you went to see it. What brought you there anyway? Curiosity? Stubbornness?
    Chris Feltus Residential Real Estate Agent from Fort Worth , Texas
    Replied about 5 years ago
    The family really needed some help and they really had no idea what to do. I could tell from the phone conversation that the escrow process was going to be long and convulsed, and neither the situation nor area lended itself to be dealt by traditional means (using a realtor etc.). I wasn’t really sure about going until the seller arranged for a police escort, and then I felt a little bit better about it. But the area wasn’t THAT bad during the day, but it certainly was a rough area.
    Chris Feltus Residential Real Estate Agent from Fort Worth , Texas
    Replied about 5 years ago
    *long and convoluted
    Replied about 5 years ago
    I have had to remove tenants that were dealt out of my rentals. I have found that remoing them is not all that hard, they leave on there own when you let them know that the local police called and said they had reports of drug dealing in the unit. I acted like a friend not wanting them to get caught and they moved and there was no issue. Most of my rentals are in lower rent areas, the ROI is really good, but you have to factor in the cost of higher turnover. As a flip.. NO way
    JPaul Mills
    Replied about 5 years ago
    Hey man so let me just tell you that the first property I got under contract was I a awesome for my town, but I live in the panhandle of Florida and we don’t have any real, for lack of a better word, ghetto. Now I grew Up in this town And it’s fairly large but this street called LOVE JOY is known for being a drug ring for the wrong kind of folks. But I thought the ARV on this was smoking good and the comps in the area actually sold 3mo prior. So someone is buying in this area. I drove by the comps and at one of them the owner was there rehabbing it. So I pitched thstop property to him and he showed huge intrest. Then he blew me off. I marketed this thing like crazy for almost a month and every buyer I spoke to about this told me I’m not interested In that area. When it came within the last week before the closing date I Called the first buyer and left him a message saying ” I have got to sell this house so name your price.” He called me and low balled the garbage outa me and I said no way. We finally agreed upon a number and I still made $10k on it. BOOM!!!!! Now I don’t consider those area unless it’s super motivated sellers or a smokin good deal.