Buying Blighted Properties in DC?

Question

Hey, all - I am curious on how to purchase and repair a blighted property that is owned by the city of DC. I did a bit of research and came across Transforming Vacant and Blighted Properties from DCHD and the dashboard of properties that are available.

From doing some quick reading, my questions are:

- When are these properties available? Are they only available at auction or at set times?

- How would I go about making an offer on a property from this dashboard that I am interested in?

- Who would I need to work with from the city and who would I need to work with contractor wise to make a proposal?

- What kind of restrictions/regulations should I be aware of if I repair a blighted property (does it have to be workforce/affordable housing, are there AMI requirements, can I be an owner-occupant etc)

- How can I tour properties to determine scope of work?

Has anyone done this and if so, what has your experience been? Any help or points of contact (contractors or otherwise) would be greatly appreciated, since this is all new for me. Thanks!

Eric Teran · Answer

@Joseph Ayoub I have worked as an architect on four projects that were considered blighted. Actually, 3 and one was about to become classified as blighted if they didn’t act to improve their property. I even had my leg fall through a floor and another time a rug was hiding a 3’ diameter hole on the third floor. So there is a lot of work involved. A lot! The other project the existing structure was so damaged we had to raze the home which lead to a lot more restrictions being a new build.

It isn’t hard but get it in your mind that a blighted house will basically be a new house in regards to your budget. Everything will most likely be replaced. Even the joist and every pipe and wire and so on. Only the party walls and exterior walls will remain in place. Actually, you only need to keep 40% of the exterior walls above grade to be considered existing and you can get creative. You do have to be careful about DDOT and DC Water issues that can drive up the cost.

There are also a lot of individual owners on those lists that you can reach out to. Once a house in DC is classified as blighted the property tax is ridiculous. One client bought a vacant house that once he bought it the DC tax office changed it to blighted which raised the property tax from $6k to close to $30k. Luckily he was able to prove that he was going get a permit for a new home so they waived the fee. Don’t go into buying a blighted property without building ASAP.

Russell Brazil · Answer

They have an auction once a year or so. They post them on the MLS, usually 20 or 30 homea hit the MLS at once with like $100k opening bid price points. I dont know when it happens per se, but its pretty obvious when it happens.

Account Closed · Answer

Joseph,

Interestingly, some of the properties on that dashboard have already been sold / rehabbed by developers in the city. In Anacostia, almost everything on that list is currently being re-developed.

Joseph Ayoub · Answer

@Russell Brazil thanks for the additional info. Do they go through an auctioneer and are the properties open to everyone, or are they through a lottery?

@Eric Teran that's good to consider, have most of the people you've worked with used hard money to fund their deals or did anyone use a 203k loan? I took at a look public tax records for a few of the properties and the owner was listed as "DISTRICT OF COLUMBIA" but I can check out some more to see if I can reach out to individual owners.

Buying Blighted Properties in DC?

Buying Blighted Properties in DC?

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