Neighbor's house recently boarded up! Messing up my flip!

Rehabbing & House Flipping
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Neighbor's house recently boarded up! Messing up my flip!

Eliot M.
Investor · Norcross, GA · Member since 2016 · 87 posts · 20 votes

I closed on (bought) a flip a little over a month ago. At about the same exact time, the house right next door had every one of their windows and doors boarded up with plywood. As it turns out, the neighbor vacated the house over 6 years ago. I called him and asked him about the situation and he was surprisingly welcome to the conversation. He told me the city told him he had to do it or they would've done it and charged him for it. So he drove in one weekend and did it himself - and in so doing, singlehandedly brought down the value of the neighborhood by a good 20%, if not more. I asked him if he was just going to leave it like that and he said no, that he had a contractor that owes him money that was going to do it. I thought, "yeah right." So I made him an offer to purchase. He declined. Sure enough, 1 month later and nothing has moved. Still boards on windows. Meanwhile, my rehab project is almost done on my flip and I called a realtor to come look at the house. She had very bad news for me, basically saying that the house is unsellable until the neighbor does something with his house. The ARV on the house would normally be around $150k, but she said I'd be lucky to get $95k for it, and $60k-$70k would be more realistic if I were to just unload it. Those were dire numbers even in my most pessimistic days. Obviously I'm not going to do that and will probably just rent it indefinitely until this guy gets his act together. So, this is FAR from ideal... I'd rather take my flip profit and go home.

So my question is, do I have any recourse here? There is no HOA. I've called the city and complained and they said (to the best of my recollection) that the boards are not illegal, but I can complain about grass growing too high, debris, etc. So I did that (because the grass was about a foot high at the time). I've spoken to a few of the neighbors and there seems to be a petition underway. Hopefully that might start things up... but I don't know what the petition is about, and if it will actually do any good... So does anyone have any other creative ideas for this? Do I have any other recourse I could try? I called him back about 2 weeks ago to make him another purchase offer... left VM message and no reply yet... All I really need to do is put new windows/doors on so it's not so painfully obvious that the house has been abandoned... it's just a complete eyesore as-is. It can't just STAY like this... can it?

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Account Closed
Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
10y

If the boarded up house drops your flip $50 k why dont you just ask the guy if you can lease the house form him clean it up and sell your flip ?  

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  • Mike Lightcap
    Philadelphia, PA · Member since 2016 · 37 posts · 3 votes
    10y
    Does he owe any back taxes? Is it a blight property? Look into possibly suing for conservatorship of the property. I have a friend who's moms house was taken from her this way,from what I remember this will allows the conservator to take control of it, remodel it and sell it. I forget how it exactly works here in Philadelphia but something along the lines that you get back any money you put into it and costs of lawyer fees etc. Its worth a look.
    0Reply
  • Jon Q.
    Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes
    10y
    Originally posted by @Jay Hinrichs:

    @Jon Q.  good guess.. the auto industry is not any where near Charleston presently.

    What you have is BOEING building the 787.. and buying up huge amounts of land

    you have the travel industry  ( cruise lines) now establishing this as an embarkaction debarkation site that brought in 15 new hotels under construction.. along with the history and charm of the city its a HUGE tourist area second only to Disney world.. Auto helps for sure but not the end all be all.

    And Detroit has no bearing its BMW Mercedes and Volvo..

    additionally its much like SF  its a peninsula surrounded by water on 3 sides there is only so much land.

    its an Awesome city and place.. and I thankful one of the top flight TV Guru's turned me on to it 4 years ago !!!  ( Guru is a personal friend and one of my clients before he was a Guru LOL)

     Impressive work Jay!

    The neighborhood looks like "a dump". I'm very surprised it can support the prices you're quoting.

    Who are buying these houses for $540,000?

    0Reply
  • Jon Q.
    Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes
    10y
    Originally posted by @Matt R.:
    Originally posted by @Eliot M.:

    I closed on (bought) a flip a little over a month ago. At about the same exact time, the house right next door had every one of their windows and doors boarded up with plywood. As it turns out, the neighbor vacated the house over 6 years ago. I called him and asked him about the situation and he was surprisingly welcome to the conversation. He told me the city told him he had to do it or they would've done it and charged him for it. So he drove in one weekend and did it himself - and in so doing, singlehandedly brought down the value of the neighborhood by a good 20%, if not more. I asked him if he was just going to leave it like that and he said no, that he had a contractor that owes him money that was going to do it. I thought, "yeah right." So I made him an offer to purchase. He declined. Sure enough, 1 month later and nothing has moved. Still boards on windows. Meanwhile, my rehab project is almost done on my flip and I called a realtor to come look at the house. She had very bad news for me, basically saying that the house is unsellable until the neighbor does something with his house. The ARV on the house would normally be around $150k, but she said I'd be lucky to get $95k for it, and $60k-$70k would be more realistic if I were to just unload it. Those were dire numbers even in my most pessimistic days. Obviously I'm not going to do that and will probably just rent it indefinitely until this guy gets his act together. So, this is FAR from ideal... I'd rather take my flip profit and go home.

    So my question is, do I have any recourse here? There is no HOA. I've called the city and complained and they said (to the best of my recollection) that the boards are not illegal, but I can complain about grass growing too high, debris, etc. So I did that (because the grass was about a foot high at the time). I've spoken to a few of the neighbors and there seems to be a petition underway. Hopefully that might start things up... but I don't know what the petition is about, and if it will actually do any good... So does anyone have any other creative ideas for this? Do I have any other recourse I could try? I called him back about 2 weeks ago to make him another purchase offer... left VM message and no reply yet... All I really need to do is put new windows/doors on so it's not so painfully obvious that the house has been abandoned... it's just a complete eyesore as-is. It can't just STAY like this... can it?

    I have seen dudes without asking paint those next door board ups white. Perhaps with permission and or have an art student paint a redish front door and some kind of window to create an optical illusion. Good luck!

     I second the optical illusion idea!

    0Reply
  • Jon Q.
    Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes
    10y
    Originally posted by @Mike Lightcap:

    Does he owe any back taxes? Is it a blight property? Look into possibly suing for conservatorship of the property. I have a friend who's moms house was taken from her this way,from what I remember this will allows the conservator to take control of it, remodel it and sell it. I forget how it exactly works here in Philadelphia but something along the lines that you get back any money you put into it and costs of lawyer fees etc. Its worth a look.

    Or just move in yourself, start paying taxes, go to court and claim adverse possession!

    http://statelaws.findlaw.com/georgia-law/georgia-adverse-possession-laws.html

    I'm only partially kidding. Homeless people have done this here in San Francisco.

    I'm not sure if it's an urban myth or not, but I heard that a group of homeless people, after living in a four floor abandoned building for 10 years, went to court, claimed adverse possession and were awarded ownership of the property.

    0Reply
  • Katrina M.
    Architect · Sydney, NSW · Member since 2016 · 66 posts · 38 votes
    10y

    @Eliot M. can you post a photo of this boarded up house? 

    I really like the idea of painting windows and door on the plywood. 

    Also, I am thinking, if the house design allows, maybe you can put there fake shutters made of say, foam core board? Similar to these below.

    2Reply
  • John Schumacher
    Metairie, LA · Member since 2015 · 3 posts · 1 vote
    10y

    @Eliot M. 

    It seems like he is not interested in selling. It also seems like money may be standing in the way of him getting the repairs done. Waiting on a contractor who "owes him money" could be a story to cover the fact that he doesn't have the money to fix it. I think leasing his property as someone suggested is a good option. However, he may not go for that either.

    From what you said, you stand to lose anywhere from $55K to $90K. I don't know how much you have invested in your flip. It seems like you might not be able to rent the house for much either. I wouldn't want to rent a house near a house like the one you described. I you have borrowed the money to do your flip, your money could end up costing you more than you can get back in rent. You also wouldn't be able to pay that back and get another loan to do another flip in that case.

    I would just offer to replace any windows and doors visible from the street and cut the grass until your house sells my own expense. Of course, you would be the one to choose the windows and doors. This might be a big expense, but it won't be $55K to $90K. That is for sure. You will have helped out someone who is probably in need and still made a profit if all goes well.

    Get what you can out of this one and move on to the next one. Letting this drag on will not only cut into your profit on this deal, but it could keep you from getting as many deals done by the end of the year. No need to let your losses compound.

    Keep us updated, and let us know how everything turns out.

    1Reply
  • Max T.
    Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
    10y

    take the boards off yourself and cut the grass right before you list!

    0Reply
  • Garth Kukla
    Wholesaler · Newport, KY · Member since 2014 · 62 posts · 47 votes
    10y

    So my brother had a incredibly creative way to get a property he wanted from a seller who was not only resistant to selling but oddly unavailable almost 100% of the time.  He found out from the neighbors that he loves beer (miller light) so he had fed ex deliver a case along with a letter and contract to purchase the guys house.  The guy said he opened the letter and called my brother because of the beer.  Long story short, my brother bought the house and now is making development plans.  He'll make over $100k on the deal so shipping beer was a small cost of doing business.  Hope this helps, Cheers!

    4Reply
  • Eliot M.
    OP
    Investor · Norcross, GA · Member since 2016 · 87 posts · 20 votes
    10y

    Thank you all for your creative answers and help. I should mention that he is not only current on his taxes, but still faithfully paying a mortgage payment every month!  I'm mailing him a letter today with some of your ideas in it.  Wish me luck!

    @Katrina M. This house could have been a grand slam for me (keeping faith that it still might be).  The guy doesn't have much room on the economics, I know that.  If he was staring at a $50k profit on his house he would not be acting this way.  I agree with your point on not letting it drag out indefinitely.  If he won't move on it I'm very tempted to just take a base hit on this one and getting the heck out of there, instead of waiting on a grand slam.

    Here's a pic, hope it works.

    1Reply
  • Jim Adrian
    Architect · Papillion, NE · Member since 2015 · 1k+ posts · 840 votes
    10y

    I wonder if tried to by the house you did and is now a sore loser and so he is trying to bring down your property? 

    1Reply
  • Charlie Vess
    Investor · Colleyville, TX · Member since 2015 · 41 posts · 18 votes
    10y
    Eliot - out of curiosity, have you tried to contact & intercede w/ the contractor? Sounds like your neighbors' pride has been bruised and he is waiting on the court to solve his problems.
    0Reply
  • Jeff B.
    Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
    10y
    Originally posted by @John Semanchuk:
    Originally posted by @Jeff B.:

    As a renter, perhaps the house next door just doesn't matter, but as an owner - - I wouldn't even get out of the car.  The implication is "this neighborhood is in decline" and that does matter to an owner.

     Is the bottle half full or half empty?    It could just as well mean the neighborhood in transitioning upwards as most are in Charleston.    

     As an investor YOU may see 1/2 full, but I doubt a renter would reach that conclusion, unless the entire street is poosh, well groomed and this is the sole blight on the street.

    0Reply
  • Nathan B.
    MO · Member since 2015 · 8 posts · 0 votes
    10y

    Hmmm, ive seen houses boarded up before next too houses redone.  And they sell for amazing comps.  However, the neighborhood is solid and all brick with new deveopment everwhere.

    Are you sure that one house brought everyones comps down that much? 

    Could it be another issue? Maybe the neighborhood was overstated in the first place? And, no offense, really. Though, maybe the fix n flip wasnt up to what the agent expected?  

    Idk a combination of some factors probably.  I just dont see that house knocking comps down that much..

    Its just boarded windows. I would get some more opinions, before dumping money into another persons property.

    Hope all works out well.

    Gl

    Also, lets say. It really is just the boards on the windows.. and lets say the man doesnt want to cooperate on any terms.  During the open house, listing, or a showing.  Would it hurt to just unscrew the boards and place them in the back yard? Then put them back up? 

    Not condoning anything illegal. Just a scenario.  

    0Reply
  • Ryanne Hodson
    Shenandoah Valley, VA · Member since 2016 · 69 posts · 35 votes
    10y

    after seeing the photo of the house, i think it would look ok to paint the windows and door so it's not obviously plywood. the house looks ok other than that, maybe buyers wouldn't give it too much of a second glance, since your house will be so nice and that's what they're there to see.

    0Reply
  • Deanna McCormick
    Minneapolis, MN · Member since 2013 · 2k+ posts · 1k+ votes
    10y

    Last ditch effort you can always rent yours out if you don't get sale price,

    But didn't you realize when you bought that the neighbor's house was vacant.. 

    My nephew recently bought neighbors house, it was vacant, next door to a flip he was doing,  he did all the yard work and mowed it so it looked good when his went up for sale, He did tell realtor he was buying the neighbors property to and said said yup that's my next project.  And he did buy it.

    I'd at least keep the yard work up for that property. 

    0Reply
  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    10y
    2Reply
  • Account Closed
    Rio Rancho, NM · Member since 2016 · 57 posts · 41 votes
    10y
    You could have large matte vinyl stickers printed with photos of windows and a door. It would fool most people from a distance.
    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    10y

    This might be hard to pull off with all the doors and windows boarded up.....but when I'm trying to sell a house that is next to an abandoned or distressed property, which happens a lot in DC, I put up a ladder against the house, and usually get a tarp and some tools out....so it looks like a contractor is working on the property.

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    10Reply
  • Derek Daun
    Investor · Sacramento, CA · Member since 2012 · 289 posts · 151 votes
    10y
    Originally posted by @Russell Brazil:

    This might be hard to pull off with all the doors and windows boarded up.....but when I'm trying to sell a house that is next to an abandoned or distressed property, which happens a lot in DC, I put up a ladder against the house, and usually get a tarp and some tools out....so it looks like a contractor is working on the property.

     That's a creative way of doing it. Although unlikely, would doing this potentially violate your duty of full disclosure if the buyer eventually found out?

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    10y
    Originally posted by @Derek Daun:
    Originally posted by @Russell Brazil:

    This might be hard to pull off with all the doors and windows boarded up.....but when I'm trying to sell a house that is next to an abandoned or distressed property, which happens a lot in DC, I put up a ladder against the house, and usually get a tarp and some tools out....so it looks like a contractor is working on the property.

     That's a creative way of doing it. Although unlikely, would doing this potentially violate your duty of full disclosure if the buyer eventually found out?

     I have no duty to disclose things about other properties, only about the property I am selling.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group545 Reviews
    WebsiteView Page
    2Reply
  • Derek Daun
    Investor · Sacramento, CA · Member since 2012 · 289 posts · 151 votes
    10y
    Originally posted by @Russell Brazil:
    Originally posted by @Derek Daun:
    Originally posted by @Russell Brazil:

    This might be hard to pull off with all the doors and windows boarded up.....but when I'm trying to sell a house that is next to an abandoned or distressed property, which happens a lot in DC, I put up a ladder against the house, and usually get a tarp and some tools out....so it looks like a contractor is working on the property.

     That's a creative way of doing it. Although unlikely, would doing this potentially violate your duty of full disclosure if the buyer eventually found out?

     I have no duty to disclose things about other properties, only about the property I am selling.

     Ahh, that must be how it is in Maryland. In California you must disclose anything that could affect the desirability of the property. Other states vary somewhere in between, often having clauses regarding things that aren't readily visible. 

    0Reply
  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    10y

    Go to a sign maker , have a sign that says , " Brand new home , coming soon " and park it in the neighbors front lawn .  Its a lot cheaper than working on his house 

    4Reply
  • Daryl Anderson
    Contractor · Cleveland, OH · Member since 2016 · 116 posts · 50 votes
    10y
    Eliot M. In cleveland, oh there is something called a nuisance abatement. If any property within about 200'(I can't remember the exact figure) is in disrepair, you can file a nuisance abatement action against them in housing court. This means in a nutshell that you estimate the cost to fox the neighbors property, the court approves it, you fix it and are then able to file a foreclosure action against the house to take ownership. Don't know if this law is in place in Georgia, but we have used it several times in cleveland.
    0Reply
  • Taye N.
    Hayward, CA · Member since 2009 · 258 posts · 62 votes
    10y
    Ask the owner if you can pay for the work and do it. If fixing the problem will raise your home. Value then go that route. Second, code violate If all the windows are board up the neighbor is in violation of health and safety code for light and ventilation. also if it a bedroom boarding the window blocks the egress access for fire. Call the fire dept and complain.
    1Reply
  • Eliot M.
    OP
    Investor · Norcross, GA · Member since 2016 · 87 posts · 20 votes
    10y

    Y'all are really helpful and these ideas are so creative! 

    @Taye N. I don't think the city the property is in has codes for nuisance, light, or ventilation. I have called the city 3 times now and the only thing they seem to care about is grass height. I love the idea about egress though! Calling the fire department tomorrow first thing. 

    0Reply
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