So, I just looked at a property that was one of the worst I have seen...almost fell through the floor a couple times. The house had some major structural issues and termite problems. My question is, who would buy a property like this...is there actually a wholesale market out there that invests in total S#*t holes like this...
(this was a $60k ARV property after a clean rehab...but rehab costs were close to the ARV..owner was asking $30k)
Had a flighty woman tell me she'd sell a $75K ARV for tax roll price of $65K. House was a complete mess with easy $30-40K in rehab. I finally offered up to $12K, only heard crickets. House still vacant near 2 years later.
To answer your question, my guess is no one. I suspect these owners will pass this junk to heirs and it'll be dropped faster than a hot potato.
Interesting @Mike M. ...this property was apparently a gift to the owners daughter who could not handle home ownership...You know, it's weird, the owner seemed pretty down to earth despite the condition of the property.
all interesting stories. i bought a house in 2004. bought it from the local tax authority for, seriously, pennies on the ARV. literally $1700 on a house that after rehab, was worth $30k. the previous owner was an old lady. she moved in with her adult son and used this house for her garage sale habit of buying everything she could and storing it. she used this house like it was a personal storage facility. when it went for back taxes, and i bought it, it literally took me 3 months just to clean the place out.
when she died, you think her kid would have took the place and made something of it, but he didn't. he continued to live in a rented apartment when he could have rehabbed this place and lived for free. it amazes me how many people will " shoot themselves in the foot" in this life.
@Brandon Sturgill seems like my kind of house, lol. I actually prefer house that need total gut jobs, but I usually buy them for 10k or less. A rehabber or contractor may buy the house if it will cashflow good when complete. True the arv may be what its worth when done, but if a quality job is done maintenance cost will be low and make cashflow even better. That said its hard to wholesale a condemned place, I will usually get it off the condemned list and then sell it. You may get really creative in the deal, as the owner will have few options. Best of luck.
her selling price us too high. My last purchase had caved in ceilings, structural issues and the like. BUT a purchase price of less than $8k with a $79k ARV makes sense all day long. Rehab took about $25k. The cash flow is so sweet.
Thanks for the input @Jeremy Tillotson
I agree @Richelle T. ...my offer would have been around $9k...but I really don't even want to start doing projects like this. Sounds like your worked out, though.
@Brandon Sturgill It did work out but you have to be confident in your numbers. It took a month longer than expected but of course getting work done around the holidays is a challenge. I say make the offer and see what happens.
Happy new year ;-)
You too. Thanks @Richelle T.
@Brandon Sturgill Most people want more than their house is worth, even from cash buyers. I can't blame them, though, I usually think my property after rehab is worth more than I can get for it, too. It's human nature. Studies have shown that ownership creates a sense of value. Nobody wants to admit what they bought has less value than they thought. Maybe that is why the best deals are generally inherited properties. They didn't buy it and have less of a sense of ownership.
I agree @Larry T. ...I have encountered it more than once when attempting to wholesale a property....thanks for the insight.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.