Rotting empty houses, insanity or scam?

Question

I don't post much any more. My fiance passed away 3 years ago and I lost a lot of my money as we were not married. Now I'm just looking for one fixer house to live in rather than an investment.

What I am seeing lately looks insane. I'm seeing empty houses that are not being rented or sold or repaired in California. I've found them by driving back streets, noting addresses and then checking some of the history. They have been empty for years or they have been recently bought but not renovated and sitting empty. Not all are bank owned- some are private parties.  I only look deeper into properties I could afford which is a small percentage.

I understand some large companies are putting derivatives from rent on these properties into the stock market and that pension plans buy heavily into them. I'm starting to suspect there is a huge scam going on- that the rents are not accounted for accurately... Not good for the pension plans or the economy. Anyone else wondering about this too?

The others- the private party ones... is this insanity? Are others running across this? What is the reason for this? Foreign investment? Vacation homes no one can possibly use? I mean, these houses are silently rotting. Meanwhile the prices go up and the homeless population is increasing here. At least they now have places to live...

As someone who enjoys renovating this is killing me.

Jay Hinrichs · Answer

@Lynn Harrison

are you talking about Vancouver WA.

Many reasons properties are vacant

1. title issues... and can't give marketable title.

2. owner just does not want to do anything for sentimental reasons.  ( I have one on my block like that 500k home just sitting) owned by doctor who had a day surgery go bad and patient expired) move away house has been vacant for 3 years now... also has winterized stickers on it so some mortgage action.

3. big bulk buyer got stuck with a few they will eventually get to.

and any other myriad of reasons.

Lynn Harrison · Answer

Hmmm... can't edit. I know what I said about crashes is contradictory- well, yes, it is. It is what it is.

Lynn Harrison · Answer

Jay, no, Vancouver BC.

Thanks Everyone. I'll keep looking but I may have to wait this out and hope it's a bubble that will crash. Everything in my price range seems too rotted to make good sense on buying it. And for me to say too rotted- that's a lot.

Gilbert, if there is another crash and pensions are lost it becomes everyone's problem.

Gilbert Dominguez · Answer

I would not worry about any conspiracy. The properties are owned and the taxes are being paid for the most part. Its not your problem unless it is your problem. If you think there is a good deal in it for you keep working it until you get one.

Steve Vaughan · Answer

Any myriad of reasons as @Jay Hinrichs mentions. I try not to get into conspiracy stuff. Keep locating the private party owners  and mailing them. I wouldn't bother mailing the banks/REOs.  Something good will stick eventually!

Keep up the good work @Lynn Harrison !  These could be a good investment for yourself as well as a good thing for the neighborhood.

Lynn Harrison · Answer

I understand a few months but these have been empty for years. The loss as a tax write off might be true for a few... I'm wondering if what's happening in Vancouver is starting in California...

Do you know how long the properties in Philly have been empty?

Mary B. · Answer

I see this in several hot sections of Philly and wouldn't really call it a scam. Some buyers can afford to sit on a vacant property for a few months after purchase without even starting to rehab and may decide to sell it at a profit as-is because they know its a sellers market and the demand in that particular area is and will be high(especially if supply is low).

Some are simply looking for a loss as a tax right-off. I've also noticed that it may take one or two written inquiries to an owner and suddenly rehab begins as if they forgot they had the thing and decides to keep it because they see another investor wants it. My coin.

Kudos,

Mary

Lynn Harrison · Answer

Oops, yes, some foreclosed ones might be. But what about the others? And.. why wouldn't a bank be able to have title after so many years if they wanted to? They are falling apart- even the studs are rotten in some of them- years of neglect.

Lynn Harrison · Answer

No, Tom they're recorded as sold. And most have had taxes paid & up to date on them. In fact, the only owner that was late on his taxes is the only one who has called me back.

Tom Cyr · Answer

It might be that the deed is in limbo and all the investor holds is the delinquent mortgage.  Or the bank has not been able to foreclose either.

Rotting empty houses, insanity or scam?

Rotting empty houses, insanity or scam?

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