Abandoned Property Next Door

[Tito Q.]

Good afternoon BP family, I am analyzing deals for my first multi family purchase on the south side of Chicago. I found a vacant 4 unit property where the numbers work, is on an okay block in a lower end neighborhood, across the street from a park, and not far from where I currently live and grew up. The property is good, I just have a concern with an abandoned property that is located next door to the deal I'm looking at. It is a single family home that looks pretty terrible. Does anybody have any experience with purchasing property next to an abandoned one? Does that effect your perspective tenants or how you approach the deal? Any adverse effects I may not be seeing or should be maybe taking a deeper look at? This will be my first deal and I am open to any idea bouncing or advice.

[Maribeth Hamel]

If anyone uses the building for drug-related activities or if there are squatters, you've got an increased risk to your tenants, your property, and your contractors.  Can you talk to neighbors to see whether there have been any issues?  It might be to your benefit to do a little research on the property and what remedies your municipality might have--sometimes you can even acquire an adjacent property for little to no money.  Other times you can convince the municipality to demolish a problematic building/structure.  Tenants will definitely notice a bad-looking property nearby, but a high-quality rental unit likely would persuade them to ignore it.  Once you know what you can do with the property, it definitely makes sense to approach the deal with that information in hand.  Good luck.