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John Jackson
  • Amherst, MA
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Newbie pursuing a distressed property

John Jackson
  • Amherst, MA
Posted Mar 22 2017, 23:31

Ok, I can see I am in a certain category which may be a nuisance.  Please accept my apology for that.

I'm another person who's looking to create a solution - for buying a house I want to make the home for me and my family.

The house is stuck in a typical (it seems) real estate mess.  I believe it can be liberated with the right approach and effort.

The house is in Western Massachusetts.  It's occupied by a couple that purchased it a few years ago.  They purchased it with private financing from the previous owner.  It's since been put back on the market for sale again for almost a year now.

I have done a lot of research on the whole situation.  To begin, the house needs extensive renovation because of some major structural and cosmetic deterioration.  Two first floor rooms have floors you'd go through to the basement if you walked in certain areas.  There is no heating system.  It was stolen before the current owners bought it, along with all the copper wiring and plumbing.  Existing heat is being provided by a pellet stove and wood stove in limited areas of the dwelling.  Water is being supplied by surface mounted PEX tubing in the kitchen and bathroom.

All that aside, the house is still well enough intact to be renovated and made whole again, without question.  I've had a contractor examine it and he specializes in that work for this kind of property.  The cost to renovate is in the same league as doing a new construction.  I'm fine with that as this is a historic home and that's a big reason why my wife and I want to live in it with our children.

Now that you know all that, here's where people here might really become more interested in the story.  I've communicated with the previous owner who financed the current occupant/owners' purchase of this home.  They haven't made half of their mortgage payments, and haven't made any for the past year.  The previous owner said they expect they will have no other choice but to foreclose, and they have no experience with doing that.

I also went to the town hall and checked, and yes, the property taxes haven't been paid on the property either, starting with 2015.  The town will begin its process to take the home if payment for the 2015 taxes and penalties hasn't been received by August 31st, 2017.

There's more.  The current sellers, in conjunction with the previous owner, received an offer by a prospective buyer to buy the property, included along with it some additional land abutting it that the previous owner still possesses and wants to sell.  The current owners rejected the offer because it wasn't high enough to have given them any money to walk away with.  That figure they want is more than a few tens of thousands of dollars.

There's a couple more things to add in.  The water supply for the house is from a shallow well that's located on the property still owned by the house's previous owner.  It's the additional abutting land mentioned above.  There's a provision in the deed that gives the current owners use of that water supply for five years from their date of purchase.  That period of time is almost over.  No mention is made of what's expected to happen after five years.  My thought is to assume the home would and should have a new well drilled on its own land.

Also, the home is served by a septic system that has passed the Massachusetts Title 5 tests the last two times they were done.  It's now overdue for another one.  The age of the septic system is 50 years old.  My thought is to assume that no matter what, this home will need a new septic system at some point in the nearer, rather that further future.  I think the cost for that is a reasonable element to consider in any changing of ownership of the home at this time.

I'm not pursuing the idea of trying to become the owner of this property to pull off any lucrative accomplishment.  I'd be very happy to pay a fair price for it and spend the money needed to restore the home to good, whole living condition again.  At the conclusion of that effort, I'm only concerned about its value being somewhere reasonable close to the entire cost to obtain and renovate it.


That said, in thinking about how to get to that outcome, it seems to me the idea of buying the note from its current holder would be an ideal solution, depending on two fundamental things.  First, would he be interested in selling the note for a fair price, one that takes into account everything I just described, above?  I think the prospect of relieving himself of all the responsibility and risk of conducting the foreclosure and eviction processes himself would be a good way to try and get him to accept a fair price for the note.

Second, what, if any, steps or measures could be taken to guarantee that the current occupants could be evicted in due course?  My tentative assumption is that yes, they could be successfully evicted, but it could easily take months.  Six months would probably be tolerable.  Could it take longer?  Could it fail to happen at all?

I know this all is a goal I'm not able to do myself, with no prior experience.  I believe though that someone with the right experience could do it though.  So, I ask myself, how can I be successful finding someone like that, and obtaining their help?  I'd be interested in trying to structure any plan in such a way that it included paying such a person a fair price for their assistance.  If anyone gets this far in reading this post, do you have any ideas for who might be able and interested in assisting me?  Thank you kindly for your time and any comments you're willing to share :)

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