Unique question on vacant house.

3 Replies

I am looking for any i sight or helpful opinions. I am looking into a property that has been abandoned for a couple year. There was a fire in the basement and I guess they had no insurance so just wakked away from it. The people still own it and I am having a hard time locating them.

The bank has a lien on it for the remaining mortgage amount of around $76k. It's ARV would be around $200k. I think I could convince the bank to take less on the lien if I agreed to refinance with them after the rehab.

Looking for anyone's advice on good way on finding the owners or if buying the lien off the bank is a good idea if you can do that? I am from Canada so I know some of the laws and rules are different from the states.

@Brandon Ramsay

Welcome to BP ... always good to see a Bluenoser about.

What you are suggesting can work, though it is not going to fall-in-your lap.   I'm not sold on the "no insurance" story unless it had recently lapsed.   Lenders generally are named insured on the borrower's policy and would receive notification from the insurer if the policy were allowed to lapse.

Have you dealt with a fire damaged property before?  If so, you know the existing structure may be less than worthless (as you would still have to tear it down and dispose of it) and the structure and foundation need to be inspected before you get too deep into agreement on a price.  Especially if the building has been sitting empty, unheated and {partially} exposed to the elements.

If this is your first fire-damaged property, then you need to budget to have the structure and foundation inspected - not by a normal building inspector, but by an engineer and/or foundation specialist.   If you know anyone with the Fire Department's forensic team, an initial walk through with them should let you know whether to bother with an engineer.   You also need to build in a very large and puffy buffer into your estimates as there will be more demolition, construction and inspection than you think.

If the property has been abandoned for a couple of years, assuming the mortgage payments stopped around the same time, the lender would normally have foreclosed {Nova Scotia has judicial foreclosure}.  The fact they have not, tells you the lender sees less value in the property than the cost/effort of foreclosure.   If the borrower does still have title to the property, it is big, bold neon sign to you convince the lender to write-off the balance of the mortgage which would allow you to offer the borrower/owner land-value for the property.

The other thing to verify is the state of the property tax account.  If it is 2-years+ in arrears, the property would be en route to tax sale or the province may have seized it (which would also explain why the lender has taken no action).

Every vacant property has a story - they are almost always hard-luck stories and fire is among the most expensive forms of hard-luck.

@Roy N. I am not sure on if they had no insurance or they just took the money and left. I just talked to the neighbors and found out a bit of info.

I haven't dealt with a fire damaged property before but like you said, I would have to get inside to see exactly what happened and damage extent. It was in the basement, so as long as it didn't destroy the floor system above I hope it would be ok. I would also need to know what caused the fire too. Electrical fires could mean new wiring through the entire house. I know will have to replace drywall and all that. I am a licensed carpenter so labour is decently cheap haha.

They had a tax sale but no one bought it. I found that info online.

You just gave me a grear idea though. I will go down to the fire department tomorrow and talk to them. They should have records of it.

@Brandon Ramsay

If the property has been to tax sale and there were no takers, then the Province owns it.

A good hot fire in the basement can crack/buckle the foundation.  Follow-on with sitting unheated and {possibly} wet and you might well discover why no-one has moved on the property.