In real estate, you often have be flexible, and that sometimes this means buying homes that you would normally never ever consider. This is especially true right now in the Dallas Fort Worth market, as inventory months of supply is less than 3 months.
I once had a colleague who was a former marine deployed in Iraq & Afghanistan tell me there have been house appointments where he had felt more unsafe than in a red zone with snipers. Now, I wasn’t sure how serious about this comment he was at the time and brushed it off, but after this appointment, I think there may have been some truth to that statement.
How I Bought, Rehabbed, Rented, Refinanced, and Repeated for 14 Rental Properties
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Setting the Stage
Let me mentally paint a picture to try and describe how rough of an area this was.
As I started to get within 15 minutes of the property, right away I knew I was in a tough area. Many of the commercial buildings were boarded up, some of which looked abandoned and vandalized. Meanwhile, dilapidated homes lined the streets with wavy roofs, exterior paint peeling, boarded windows and pitbulls in the backyard.
This is not the type of area where you want to get out of your car if you have any choice in the matter.
How I Found This Property
This particular lead was a referral from my website. She described the situation, fairly typical of a probate scenario, where there were several siblings, and they were not getting along with each other on how to settle the estate.
One more thing — the house was at one point a high traffic drug house. You know, the typical stuff.
This type of property was definitely far and away from what I would consider in my “wheelhouse;” right from the get go, I was thinking WHOLESALE for the exit strategy. For this probate property, one of the brothers had been living in the property, but had really let himself as well as the property go. One day, while he was getting high, his “friends” stole practically everything from home, ranging from refrigerators to the AC system. In addition, they gutted the copper wire and even some fixtures like ceiling fans.
Despite the seller trying to warn me of how much work the house would need and how rough the area was, I was still ill prepared for what I would see on the actual appointment.
On the phone she described the house as “a black hole that absorbed light even during daytime hours.” She recommended bringing a flashlight or two. I researched the area a bit more and found it was even more of a war zone than I previously anticipated, located in a very rough area of Dallas.
The seller was so apprehensive about visiting this property that we contacted the Dallas Police to set an escort for the day — in addition to her brother accompanying her for the appointment.
When I arrived at the property, as I typically do, I drove the comps and tried to get a rough idea of what ARV was before even stepping foot on the property.
As I was tallying up the repair costs in my head, all sorts of red flags started to go off. And I quickly realized that the numbers would not make any sense for most buyers. To give you an idea, the Tax Assessed value of the property was only about 37k.
The inside of the property solidified the decision for me. It was just not something that fell within my buying criteria. Take a look for yourself:
Finding a Buyer
Lucky for me, I have a handful of colleagues who buy very unique homes just like this. Remember, not every investor operates on the same margins or has the same type of exit strategy. You can sell anything anywhere if the price is right.
This particular property was sold to an investor who frequently bought in that area. He would buy these properties, clean them out just a little bit, do a very basic rehab (just barely livable) and would then sell the houses via owner finance. The seller would then finish the repairs on the homes themselves.
The Moral of the Story
Stay safe. Make sure you always at least text or call a loved one to let them know where you are going to be.
In addition, I share my Google Document Calendar with my wife that lets her know exactly where I will be throughout the day in case of an emergency.
What’s the roughest property you’ve considered investing in? What do you do to ensure your safety when visiting homes?
I’d love to hear your stories — please comment below!