Hello Bigger Pockets! This is one of my first posts and it is that of a potential deal. Here are some details...
I found a property on craigslist that is 2.2 acres with two small houses that are in rough shape. One of which needs to be demo'd and the other which may be salvageable. The property is in a rural area just south of Tallahassee, FL and has septic/well. He has the property listed for 16k. I did some research and found that he purchased the property at a tax deed sale for $7800 three months ago and does not live in the area. I also found that the property has an unpaid tax bill of $850. Also, it does not currently have a quiet title. Property appraiser shows the land itself is valued at $11,000, but I understand there is more that goes into this determination besides that. I just used this number for simplicity of quick analysis.
Long story short, i've got the guy down to $6500 cash for the property. Due to it not having a quiet title, having a small delinquent tax bill and the fact the property is quite overgrown and will need some demo and clearing, what are your thoughts on this deal? I might also add that he seems eager to sell and wash his hands of it.
My initial thoughts were to either clear it and sell as acreage quick or put some mobile homes on it to rent out. Or fix up the one house(if salvageable) and rent it out or sell. Would you run from this deal or do you think there is something there? Thanks in advance for any insight!
What is the ARV for the house that is salvageable? Estimated cost of repairs? Cost of demo on the other?
If salvageable, I'd say the ARV would be around 60K. It is a small 900 sq ft house and would need a new roof, structural repairs, new kitchen, bathroom, floors. It would probably be best to tear it down I'm thinking. Not to mention the black mold and dead animals. :/
I would do some research on demo costs in your area. I think you will find the cost of demo and removal to be higher than you'd expect. Also, you may need permits/fees to demo as well.
welcome to BP my friend. my first thought would be to find the highest/best use, which might be the mobile home idea. I know that there is high demand if we are talking about southside and the outskirts(most directions). Make sure you get a solid demo estimate( EPA compliant if applicable). I would be more than happy to ride out there to give you my interpretation of the situation. Sounds like you are doing a thorough job on researching the liabilities associated with the title. Bargain and sale deeds can catch you "sleeping at the wheel" if you are not careful. Make sure you get that septic inspected to determine the operating life of the system.
Without a doubt, speak to a good real estate attorney. There are specifics about the whole tax deed process and title that may be an issue.
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