Theres a property that i am interested in investing in. I can go two ways wit it. Either buy and hold or flip it. Its listed about 80k under market value and probably needs about 20k of rehab. The only caveat that someone died in the home recently. They are motivated to sell, im just wondering how this can affect my ARV value? Anyone with experience with purchase?
California has a 3 year rule for disclosure but excludes aids .Generally if its not a violent murder etc it should not effect value People dying is a fact of life many die their homes Nevada and many other states we do not have to disclose it
I dont think it can be a big factor but you must find out cause of death if murder or suicide that could for sure affect the arv resale.
From my experience, it MAY or MAY not affect the ARV. If you think you can make money, buy it, fix it, and list it. Can't make any cash, if you don't take the risk.
It may turn off a few buyers, but more than likely there will be plenty of buyers who will not care. I personally would not care if someone had died in a property perviously.
The great thing is you seem to be getting an amazing deal. If you're walking into $80k just price it really well. You should be able to walk away with a solid return and also give someone a great deal. Win-Win scenario it seems.
Was it of old age or a violent crime or suicide? I think that latter would make a difference.
You have to die somewhere .
it was natural causes
Originally posted by @Varinder Kumar :
it was natural causes
Should be a non-issue. Observe your local disclosure requirements, otherwise just another sale.
It absolutely is an issue. Why do you think the property is 80k below market value? A lot of potential buyers will pass on purchasing a home that someone died in. It is better that it was natural causes. Perhaps it would make a better rental.
@Varinder Kumar If you're buying to flip you're going to have the same disclosure issue and same effect on sales price until the 3 years is up. I personally would not want to live in a home knowing someone just died there. To me, that's creepy and I would pass if I was looking for somewhere to live. Actually, I think I'd rather not know and then it wouldn't bother me! Unfortunately in California you have to disclose.
Sounds promising to me
With natural causes, most people won't care. The less specific you can be the better, i.e. don't tell them which room or the actual cause, just leave it at "natural causes in the home" or better yet......"somebody was peacefully called home to their maker in this home as a result of natural causes." Always be honest and upfront but most people would rather not know specifics.