Do you avoid buying properties with known drug history?

Question

A town I like in Vermont, Springfield, has good prices in the otherwise insane Vermont real estate market, in part because it has a fair amount of crime, although the amount of crime is still well under than the U.S. average. I was interested in a vacant foreclosure (the owner is deceased) but found out his son has major drug history, including selling heroin, and was arrested at the house last year, well after his father's death. (Gotta love Google.) I was going to run up there tomorrow to go see a different house that was just listed. Well, the owner is in custody without bail as an alleged armed robber. He also served time for dealing cocaine. A small amount of heroin and empty fentanyl wrappers and live ammo were found in the house after his arrest. Would you let history like this deter you from purchasing a house a. for tenants b. to fix and flip c. for yourself? Would you write a contingency that the house be tested for drugs? Any thoughts on what tests to order and the cost of that testing? What about a foreclosure that you can't enter before buying? I'm new and think it is wise to skip these places but maybe instead I am missing some opportunities.

Malcomb Stapel · Answer

@Julie Williams  thank you for the explanation. For fentanyl contamination; understand that the folks who are overdosing on fentanyl (which is very powerful, as you mentioned) are generally injecting it directly into a vein. It obviously is absorbable through skin, but if you look at how that is done, they are using a transdermal patch that is in constant direct contact with skin.

Ronald Allen Barney · Answer

The drug testing and remediation industry is more than a little crooked itself.  They set thresholds ridiculously low so as to recommend their remediation (just like a shady mechanic "just having a look under the hood to see if you need anything.")

Whatever cleaning you normally do for rent readiness will be fine.  However.  I would lean away from areas that tend to get occupied by the criminal element.  Even if they do pay rent the property is as likely as not to get shot up in a "street beef".  But if they are addicts they won't pay rent.  Avoid, but only for that reason.

Anthony King · Answer

@Julie Williams the house is likely to relapse so even if it is clean now I'd stay away.

Julie Williams · Answer

@Joshua Janus Thank you for the response. I am trying to move there from out of state and I have no team as of yet. I also am having a knee replacement later this year, so I am being careful not to take on anything difficult until I have recovered fully! Sounds like I made the right call.

Gini Dutt-Roye · Answer

Thank you so much for the information. Very valuable advice.

Julie Williams · Answer

@Gini Dutt-Roye I don't own an Airbnb but I have looked in to renting to travel nurses. There is a site called Furnished Finder that is the go-to and Airbnb has a section for longer term housing. If you google travel nurse housing there are other sites. A friend of mine who is a travel nurse, mainly in Northern Vermont and Southern New Hampshire, but she has also been to Tennessee and Florida, has been looking in to buying a multi-family and renting to travel nurses. She gave up and bought a home for herself with her boyfriend. She recently said travel nurse contracts are down. I have not called travel nurse agencies, but I did call the HR department at the biggest area hospital I would be drawing nurses from. I asked them how much they are using travel nurses. It has been a huge added expense during the pandemic and hospitals, nursing homes, etc. are actively trying to pull back from using travel nurses to use permanent staff instead. The hospital said they were actively working on reducing their use of travel nurses. However, that hospital is in a very modest town with little to recommend it culturally, and I think they are going to have to use some travel nurses. Perhaps they will succeed in using fewer. In an area that people would be excited to  live in, hospitals may succeed in switching back to mostly permanent staff. It's a volatile, unusual time, and nobody really knows what will happen. The hospital was really interested in forming a relationship with me to house incoming doctors and administrators with families, because it is almost impossible to rent or buy a home in that area, but the neighborhood the house I almost bought (and decided not to) was not anywhere near nice enough for a doctor.

Gini Dutt-Roye · Answer

May I ask how you arrange to have traveling doctors and nurses stay at your Airbnb?  Do you make relationships with the nurse agencies?

Julie Williams · Answer

@Jill F. that is the saddest thing I have ever read on Bigger Pockets.

Julie Williams · Answer

@Ronald Allen Barney Thanks for the point about the drug remediation industry. Very unlikely to be a shooting, not that kind of area, but plenty of addicts. The house went under contract in two days (not with me). It has gotten to the point in Vermont that as long as there aren't dead bodies lying around, everything sells very fast and well over asking.

Jill F. · Answer

I was worried about fentanyl contamination when I had a guy OD on it in one of my apartments but the police said not to worry, his "friends" wouldn't have left anything that would get someone high ...

Do you avoid buying properties with known drug history?

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