San Antonio, TX · Member since 2017 · 81 posts · 31 votes
Hello everyone. New investor here. There are two vacant houses on my street I'm considering for my first investments. On one there is a large hole in the roof that's been there for years meaning there is probably significant water damage and mold inside. Being new to this, how do you gauge what type of remediation and rehab is needed in a situation like this? Are there ever types of damage that make a property a lost cause because they can't turn a profit? Sorry if that's a dumb question, but don't want to get in over my head right out the gate. Thanks for your perspective.
Real Estate Investor · Painesville, OH · Member since 2017 · 29 posts · 15 votes
9y
You mentioned that both of these dilapidated houses are right next to each other, if you only buy one of these properties you will need to factor that into the ARV of your investment property, because you will still have one ugly house right next to your investment. As far as what kind of contractor you will need, if your not even certain about what type of professional you may need to call, I agree with @Tyler Libby, don't start here, you need to learn to walk before you run. A property like what I am visualizing (large hole in roof for years) may require several different issues addressed such as remediation, abatement, etc. these issues alone could make this a very bad investment and it's not a good way to start.
Just my opinion but you need to take the emotion out of the equation, I have also been there and done that.
Investor · Georgetown, MA · Member since 2017 · 71 posts · 26 votes
9y
You really need to get a local professional to look at it. It's a huge wild card. Is it even safe to enter at this point? There is just no way to know this without someone who can go onsite and assess. A huge hole in the roof for years is just a giant unknown.
What can make a property a lost cause. If the structural integrity is compromised enough, the ROI can be impossible. Even if the property is free. It's basically a knock down and rebuild at that point.
If you're just starting, don't start here. Been there, done that. I tried to 203k a property when I was starting out. Got it under contract and it was just too much. They ended up selling it to the city for $1 and they leveled it.
San Antonio, TX · Member since 2017 · 81 posts · 31 votes
9y
@Tyler Libby what type of professional should I get on site to give their opinion? Would any general contractor do, or should I look for someone with particular expertise? I feel like starting here could be risky, but they're just down the street from my primary residence and the two are right next to each other, owned by same person. I have a vested interest in not having broken down houses in my neighborhood, and if I can turn a profit all the better. I'm just worried about trying to approach the owner if I only want to take the better one. Hard to say I'm a problem solver if I only want the easy work.
Real Estate Investor · Painesville, OH · Member since 2017 · 29 posts · 15 votes
9y
You mentioned that both of these dilapidated houses are right next to each other, if you only buy one of these properties you will need to factor that into the ARV of your investment property, because you will still have one ugly house right next to your investment. As far as what kind of contractor you will need, if your not even certain about what type of professional you may need to call, I agree with @Tyler Libby, don't start here, you need to learn to walk before you run. A property like what I am visualizing (large hole in roof for years) may require several different issues addressed such as remediation, abatement, etc. these issues alone could make this a very bad investment and it's not a good way to start.
Just my opinion but you need to take the emotion out of the equation, I have also been there and done that.
San Antonio, TX · Member since 2017 · 81 posts · 31 votes
9y
@Daniel Baker I know what you mean. Thanks. I am trying to avoid being irrational by just running out and throwing money at this. The hard part is wanting to get out the starting gate and seeing what may be two potential opportunities right in front of me and then thinking "Those are probably too hard, leave them alone." Balancing the different competing motivations and perspectives is hard. But for discussion sake and since a picture is worth 1000 words, here are some images of what I am talking about:
And this is the property right next to it which is overgrown:
So in general, I'm trying to find out whether the first is a case of just being better off knocked down, or how else would I play this if rehab is over my head. Secure a good price and wholesale it to someone who could do the rehab? Doing nothing just doesn't sit right if I'm trying to get in the game.
Johnson City, TN · Member since 2014 · 586 posts · 705 votes
9y
I think the first question you need answered is exactly why these houses were abandoned. Is there a major foundation issue or environmental concern? Have they been condemned and if so, when and why.
San Antonio, TX · Member since 2017 · 81 posts · 31 votes
9y
It's a good question and I'm trying to get to the bottom of it. The code inspectors have files on the property but they're all marked closed. They placed $350 liens on each, but that was for the cost to secure them from vagrants. I haven't found any records that they're outright condemned or due for demolishing, but I need to get the actual code inspector for our area on the phone.
Flipper · Richmond, VA · Member since 2017 · 3 posts · 0 votes
9y
Hi Neil, any updates on the cost. I am looking at one that has a solid structure but the holes in the roof are large. The entire roof will need to be replaced and I am looking to add in two full dormers to get some extra sq footage. Let me know how the roof cost estimates went.
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
9y
You may have mold and rot . What the good part is you should be able to get them at a great price . Sure you need a contractor to look at them . But these are the type deals I love . Looking at the holes , I figure I am buying land and a shell , a total gut renovation . I shoot real low on my offer .