Run-down property owned by Salvation Army

9 Replies

I've been taking the advice to look for distressed or run down properties in good neighborhoods and I came across one today (I'm looking for potential buy and holds or flips).

In doing an initial search in the public records, the Salvation Army is listed as the owner of the property. The SEV is listed as 0, while the land itself is valued at 23k. The taxes paid are under $100 each year. SEVs of surrounding homes are 50k. I have never seen this, would someone be willing to explain how barely any taxes are paid and no SEV is listed? The house looks abandoned and is a good example of the "worst house in an otherwise great looking neighborhood".

Regarding "I have never seen this, would someone be willing to explain how barely any taxes are paid and no SEV is listed?" The Salvation Army is registered as a non-profit organization, and as such, generally enjoys exemptions from things like county taxes.

SEV is not a common, nationally used term in property taxation world. Care to please explain to other posters outside your community?

SEV is used in determining the value of property, from what I've seen here in Michigan. It's what I've seen property taxes then based off of (usually the purchase price of a newly built home, for example). So, since this piece of land has a home on it, I found it odd that the SEV value was so low compared to other homes on the street (most of the time they are within the same ranges of each other, as most homes in subdivisions like this were built around the same time and tend to have a similar SEV for taxation). I am new to this, but this has been my understanding so far.

Part of my "I have never seen this" was also the fact that a non-profit owns a seemingly random home on a street filled with other well-kept homes that appears to be abandoned and not have any tenants. I'm not sure why, in this case, the Salvation Army owns such a house and was wondering if anyone else had stumbled upon properties this way. And, if so, what were some strategies to approaching them about it. Given the neighborhood, I'd love to see if they wanted to sell it. 

The Salvation Army and other non profits are often given properties for free.  Many will be very low value /no value properties that not much can be done with.  Many are left to the SA in people's wills.  Sometimes the non profit doesn't even know they own it. Certain non profits enjoy property tax exemptions and reductions.  It's very common.  

Ask if they want to sell it. Trying to deal with a national non profit about underutilized real estate holdings will be a great learning experience. My experience says it's in the top 10 of futile activities in REI. Maybe you'll get lucky!

SEV - State equalized value which is 50% of the assessors value of the property. However, taxes are determined by the taxable value which is typically exactly the same as the SEV, but not always.

Originally posted by @K. Marie Poe:

The Salvation Army and other non profits are often given properties for free.  Many will be very low value /no value properties that not much can be done with.  Many are left to the SA in people's wills.  Sometimes the non profit doesn't even know they own it. Certain non profits enjoy property tax exemptions and reductions.  It's very common.  

Ask if they want to sell it. Trying to deal with a national non profit about underutilized real estate holdings will be a great learning experience. My experience says it's in the top 10 of futile activities in REI. Maybe you'll get lucky!

I couldn't agree more.

However, I was once asked by a legal person to find all properties vested in the name if the American Red Cross in a certain county, They really didn't know!

Thanks @Rick H.  thanks for the more thorough explanation on SEV, I appreciate it! I didn't know that wasn't a nationally recognized term.

@Emily B.  sounds like a potential diamond in the rough, aka a great find! Good luck. Keep us posted if you get it or not!

I would love to hear an update on what happened with this Salvation Army owned property.  I recently came across one myself, and would love to hear more before I jump into researching how to purchase it.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.