Is it a bad idea to buy a house with squatters

Member since 2020 · 2 posts · 1 vote

I recently started to have an interest in houses in Philadelphia and I noticed that there are some cheap houses there with squatters.

Is the process hard to evict the squatters in Philly? How long and how much does it take to get rid of them?

Is there anyone who has experience dealing with squatters?

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Wesley W.

Rental Property Investor · The Vampire State · Member since 2013 · 2k+ posts · 2k+ votes

As long as you factor in the cost of their removal into your numbers. Conservatively, I would plan on 12-18 months of lost rent (before rehab) and a signifcant amount of money/time to turn over the unit. Have you been inside? Good to have a qualified contractor walk it with you and assume 50% above whatever he tells you. If you can't get inside, I would assume the economic vacacy above, and a full gut rehab. The squatters institute a dynamic that you cannot accurately budget for, so I would be very, very conservative with any offers. Low, low, low! You are literally buying someone else's legal headache from which it may be difficult to see the bottom. Based on geography alone, I am sure Philly has a very long, difficult and expensive process involved in removing these people. Plan accordingly.

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Wesley W.
Rental Property Investor · The Vampire State · Member since 2013 · 2k+ posts · 2k+ votes
2y
As long as you factor in the cost of their removal into your numbers. Conservatively, I would plan on 12-18 months of lost rent (before rehab) and a signifcant amount of money/time to turn over the unit. Have you been inside? Good to have a qualified contractor walk it with you and assume 50% above whatever he tells you. If you can't get inside, I would assume the economic vacacy above, and a full gut rehab. The squatters institute a dynamic that you cannot accurately budget for, so I would be very, very conservative with any offers. Low, low, low! You are literally buying someone else's legal headache from which it may be difficult to see the bottom. Based on geography alone, I am sure Philly has a very long, difficult and expensive process involved in removing these people. Plan accordingly.
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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2y
Quote from @Autumn Kim:

I recently started to have an interest in houses in Philadelphia and I noticed that there are some cheap houses there with squatters.
Is the process hard to evict the squatters in Philly? How long and how much does it take to get rid of them?
Is there anyone who has experience dealing with squatters?

I would speak with an attorney inthe area to get worse case situation. Remember to not only disocunt by the cost to get them removed but the time factor and lost rent etc. while you would be paying for the property/have paid for the property.
Lets say its $100k property and you bought it cash. In a year if you finally got an eviction you lost the ability for that $100k to generate revenue as a squatter house is not going to be appreciating based on the condition they will leave it for you.
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Eric Greenberg
Investor · Philadelphia, PA · Member since 2019 · 618 posts · 430 votes
2y
Does buy squatter houses in that specific area fit your investing goals? If so then please explore with someone local and knowledgeable for time frame/costs/etc. if its just a way to buy a cheap property and you have little background, it may make you thoroughly hate RE investing.
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Jonathan Bock
Accountant · Bryn Mawr, PA · Member since 2023 · 409 posts · 321 votes
2y
@Autumn Kim

Not a bad niche if you like pain and have staying power; this is not a strategy for a hands off investor that likes excel and internet research.
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Alan AsriantsBusiness Member
Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
2y
If the numbers make sense you buy it.
Inheriting squatters is a PIA, but because of that you should be able to get the property at a discount. Removing the squatters is your way of creating equity in the property.
When running your numbers, assume that the property is destroyed inside to the point of full gut + some.
And make sure you get the exterior thoroughly for structural damage.
Make sure that the squatter is not a related family party or trust. This can create title issues.
Had a wholesaler push this onto a friend of mine. If the squatter is related, they might have rights to the property.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
2y
Unless you have a ton of money and love stress, I'd run like heck from this.
Can you make money? Sure, well maybe, it's never a sure thing.
Surely you must have been seeing the stories that are all over the news lately? Do you really want to deal with all of that?
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Chris Pelc
Investor · Philadelphia · Member since 2023 · 104 posts · 46 votes
2y
If you've got the backbone to hold up to any challenges this situation might bring about, you could potentially get a pretty good deal on the house.

As everyone else has said.. It is best to calculate out your holding costs associated with the time that it would take to get the squatter out.

Generally cash for keys doesn't always work. But that would be my recommendation for your first shot at getting them out. I would definitely pair up with a good attorney as well. If you need a referral, let me know.
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Melanie ThomasBusiness Member
Real Estate Broker · San Antonio · Member since 2022 · 1k+ posts · 489 votes
2y
Great question! Not a bad idea if the numbers make sense. Its important to factor in the costs to remove the current tenants. Good luck & happy investing!
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Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
2y
Quote from @Autumn Kim:

I recently started to have an interest in houses in Philadelphia and I noticed that there are some cheap houses there with squatters.
Is the process hard to evict the squatters in Philly? How long and how much does it take to get rid of them?
Is there anyone who has experience dealing with squatters?

RE is all about math, nothing else. Get the property for a better price knowing it may take a month to get them out.
Good luck
BTW HIRE a PM co, do not try and go it alone on your 1st investment,
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