Sorrento, FL · Member since 2016 · 9 posts · 1 vote
Hi, I am new to real estate investing. I have found many very abandoned over grown houses in central Florida. Even in ok neighborhoods, I did my due diligence and I have found no leans just a lot of work. They often have to have a safety inspection by code enforcement before power will be restored, and often there is so much garbage and vandalism but they are not condemned. So why are they still there? I'm tempted to buy what I think would be a good deal, a lot of work but still a good deal. I'm not a licensed contractor and would have to do most work myself. I don't want to take on more then I can handle.
Have you checked what the comps are? They could be deals, but first understand why nobody else is buying them. It is possible the cost to rehab is too high, or that they are in a bad neighborhood, or something else. It could be that the work is just not worth it to somebody else, that for less work you could make the same return in another part of town. Most likely even if you did rehab it, the property wouldn't sell for what you put into it.
@Pam Poe Welcome to BP. The answer to that depends on a lot of factors. How much will the house be worth when the rehab is done? How much will it cost to fix it up? How many hidden defects will you find while working on it? How much will it cost to acquire it in time and money? What rate of return would you have if you invested your money elsewhere in say a mutual fund or the stock market. There is so much that needs to be known before you can get a rational answer.
The cost to buy is $10K and you get 2 houses on a nice lot, nice area, the city has 1 house listed as a shed but it's a house. They both have solid roofs, electric to the pole and city water as well as natural gas. Those are the positives. They both need dry wall, flooring, cabinets, plumbing, Windows, paint and garbage cleaned out. But I thought it would be a good rehab and rent kind of thing. What scares me is the code enforcement safety inspection. I don't want them condemned before I can rehab and I don't have much money. I see so much potential but worried about $$$ and things I can't fix myself.
Unlike old cars that need restoration and antique furniture that needs repairs, houses often come with big issues concerning title ownership and claims affecting their equity.
Also, possession issues crop up in addition to hidden damages and unhealthy systems.
Once you study, you'll begin to see that a bargain may--or may not-- be a bargain.
As stated above the answer to your question is "that depends". It depends on the location, the age & condition of the structure and it's components, weather there are liens on the land records, if there has been work performed without the required permits & inspection approvals, are there zoning or health department issues, are there open code enforcement cases where violations have been cited, are there fines running, and if you are will take responsibility for that type of a project. What's the lot alone worth. What's the lot with utilities worth. You mentioned a property with "two houses" but one listed as a shed by the city. That's a red flag. Check with your local zoning department regarding what uses are allowed on that property and building department for the permitting history. A title search will reveal any liens. It all boils down to the price you pay to purchase, the cost to make the property habitable or attractive to another buyer and what its worth to you or someone else when you're finished.