I found an abandoned house in my neighborhood. What can I do???

Question

Hello!  I am brand new to real estate investing and am chomping at the bit to get my first deal under contract!

I have found an abandoned house right in my neighborhood and trying to figure out how to go about pursuing purchasing it and which options I should take.  Does anyone have experience in this and can I get any tips on where I should even start.

Thank you!

Nate Hollembaek

Rick H. · Answer

Vacant houses, like abandoned cars, may or may not represent opportunities. Like finding dates at a driver violation class: The odds are good... that the goods are odd.  Don't ask me why I know.

Here are the Big Six (6) reasons people abandon houses:

1) Skipped town

2) Substance abuse (drugs and alcohol)

3) Incarceration

4) Severe mental and emotional problems

5) Senility (senior may be residing in nearby facility)

6) Deceased

The first thing I want to do when encountering an unoccupied property is to determine if it's an "orphan" or not.  What's an orphan?  It's a property that no one cares about; truly abandoned.  A bank owned property is NOT an abandoned property because the lender certainly does care about it.  Bank REO's drop off my list.

I check title to determine if any voluntary transfers or encumbrances affecting title have occurred in the last year or two. Occasionally people buy property but are slow to do anything with it. This is especially common when property is pending demolition, further entitlements or re-zoning.

I also check county website for status of property taxes.  An orphan will most often have delinquent or defaulted taxes. Title company profiles sometimes provide inaccurate info concerning taxes, unlike a prelim, hence the county is a better source.

Once I've determined that a property is an orphan AND has equity, I go forward with my own (proprietary) checklist and set about finding the owners, if alive. If deceased, I determine if an open probate exists in the county of the property or surrounding counties, before determining heirs and tracking them down.

Having developed expertise with vacant properties I can reflect back and say that there's an awful lot of moving parts and occasionally fraught with legal risk. Many of the deals have profitable but some have gone bad due to hidden land mines and litigious heirs.

I once asked a guru-wannabe who was promoting his abandoned house course if he was familiar with some of the legal problems his written suggestions could create. His clueless answer revealed that he had no more any idea about really doing deals than the other Dream Merchants.

Oscar Alvarado · Answer

Congratulations Nate,

I believe deciding what you want to do with the property is the next step, wholesale, flip, fix and hold, etc.  Next, is finding a value to the property and ownership - are you able to get and idea of the cost of rehab?  Also, look up in your local CAD who the owners are and address - I sent out a letter with pictures of the property - there is a sample letter here on BP, my apologies I do not remember exactly where, I believe they are called "yellow letters" - make sure you have a figure in mind for the offer.

I hope this helps -

Oscar A.

Jay Neil · Answer

Peace @Nate Hollembaek !

Like @Thomas Quinn was saying check on your county's tax assessor website for owner info. When you find the owner of the property, I would send him a yellow letter expressing your interest in the property. VOTE this comment is it is helpful.

Syd Slocum · Answer

I would like to know what steps, #1, #2, #3, #4, #5, etc. to make a contract on an abandon property to re-sell, get finders fee, or wholesale?

Ibrahim Hughes · Answer

The first step imo is to do some basic research on the property. Find out why it might be vacant.  Is the property in foreclosure? Is the owner deceased? After you find out why the property might be vacant you can then figure out how best to approach the owner. But just taking the shotgun approach and rolling up on the owner without any info on them or the property is usually an exercise in futility IMO.

Steven J. · Answer

They are right so far. Search for the address on your tax assessor's website. You'll then see who the owner is and what their mailing address is. If the mailing address is the same as the property you're looking at that means either the owner actually does collect mail every so often, or good luck on contacting the owner. This circumstance is pretty unlikely.

You can also check to see that all the taxes are paid up to date. That might give you an idea of how to approach this person. If taxes are being paid you may be the shining light the owner needs because they want to get rid of the property. If taxes aren't being paid you could be more forceful and send a letter stating "you're delinquent taxes could cause you a foreclosure which would taint your credit score. I can help"

Nate Hollembaek · Answer

Great advice!  If the owner's can't be reached, is it possible to find who the lender is and communicate directly with them or is that not a viable option.

I am hoping to flip this house.  It has a good roof on it and looks to be in good shape inside just peeking through the windows.  Could use a fresh paint job and some new garage doors to give it some curb appeal.  Perfect property for first time home buyers in a good neighborhood.

Thomas Quinn · Answer

you can usually check the tax accesors website for owner informaton

I found an abandoned house in my neighborhood. What can I do???

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