Why would someone do this ?

Buying & Selling Real Estate
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Why would someone do this ?

Stephen S.
Wholesaler · Holiday, FL · Member since 2013 · 571 posts · 221 votes

I own a 2/1/1 that I bought and rented two years ago. When I bought it the 2/2/1 house next door was vacant. Nice shape, newer roof, and now that kids have broken in for me - I have gotten to see that it seems to need nothing. The next-door-to-mine house is still empty right now. Some kind of service company comes to look at the place (at least from the outside) and mow the grass. They either don't know or won't say who they work for / who ultimately pays their bills.

I would like to buy the next-door-to-mine house. And in tracking down the owner I have found that she owns (and pays taxes on) several other properties in the same county. She is a Real Estate agent. All of the properties are empty and not listed for rent or sale. She lives in a similar house that she rents from someone else.

My question is: Can any of you think of any reason that someone would act this way? What goal might she have?

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Robert Leonard
Investor · Lafayette/Baton Rouge, LA · Member since 2013 · 1k+ posts · 915 votes
12y

@Stephen S. Just a shot in the dark, but the owner may be paying taxes and maintenance on the property during a "redemption period" and waiting until that period ends to do anything with the property? If the property was purchased at a tax sale, the owner has a period of time (can be as much as five years in some states) that they can pay the taxes and some interest to the person who paid them, and get their property back. That's just a guess, it could be any number of possibilities?

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  • Thomas Williamson
    Investor · atlanta , GA · Member since 2012 · 287 posts · 148 votes
    12y

    That sounds like hoarder behavior to me. I can't think of a good reason either, other than she may be thinking she'll sell them for a profit one day, but the cost to fix them up again may eat into her profits.

    I'm at a loss on that as well.

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  • Robert Leonard
    Investor · Lafayette/Baton Rouge, LA · Member since 2013 · 1k+ posts · 915 votes
    12y

    @Stephen S. Just a shot in the dark, but the owner may be paying taxes and maintenance on the property during a "redemption period" and waiting until that period ends to do anything with the property? If the property was purchased at a tax sale, the owner has a period of time (can be as much as five years in some states) that they can pay the taxes and some interest to the person who paid them, and get their property back. That's just a guess, it could be any number of possibilities?

    2Reply
  • John Moore
    House Flipper · East Stroudsburg, PA · Member since 2013 · 1k+ posts · 205 votes
    12y

    You did not mention if you contacted her to purchase the property only that you became aware of who owned it. I would make direct contact, call and make an appointment or send a letter and request a meeting. Worst case you will find out the answer to your mystery. Food for thought.

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  • Stephen S.
    OP
    Wholesaler · Holiday, FL · Member since 2013 · 571 posts · 221 votes
    12y
    No I haven't spoken with her yet -

    Well; let's go back a bit. I did do some casual research; asked the neighbors who had owned the house, why she was gone now, did she die? Divorce? Lose the house to foreclosure?

    Everybody on the street told me that they all want to buy the house - but that they don't know anything - they are waiting for it to go up for sale.

    I did find the previous owner's present address and go knock on her door at various times. Dogs barked inside but no one ever answered. I left cards and notes there - and then later sent letters. The letters all came back as: 'undeliverable - no such person at this address'.

    I get busy with other things and so didn't go further until recently. One of the things I was curious about was who was paying the taxes. Surprise! It is the owner of record - the same woman who lists the address where I sent the letters as her residence address. <g>

    But I now know who she is, where she works, I have a recent picture of her, and will make secret arrangements to approach her in person to ask my questions. I like a personal touch when gauging the lay-of-the-land. <g>

    Nonetheless; l would rather rely less on being quick-on-my-feet when I meet her than I would on instead having some advance idea of her thought processes. What her goals are? And why she would go after them in this way? I have been pondering it and can't make any of my logic apply - the apparent actions seem to serve no purpose that I can think of.





    posted by @John Moore:
    You did not mention if you contacted her to purchase the property only that you became aware of who owned it. I would make direct contact, call and make an appointment or send a letter and request a meeting. Worst case you will find out the answer to your mystery. Food for thought.
    0Reply
  • Justin B.
    Investor · Gaithersburg, MD · Member since 2013 · 659 posts · 441 votes
    12y

    Maybe they are pocket listings for now?

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  • Stephen S.
    OP
    Wholesaler · Holiday, FL · Member since 2013 · 571 posts · 221 votes
    12y
    What is a pocket listing?



    Originally posted by @Justin B.:
    Maybe they are pocket listings for now?
    0Reply
  • Troy Weygandt
    Real Estate Broker · Mountain Lakes, NJ · Member since 2013 · 22 posts · 12 votes
    12y

    @Stephen S. A pocket listing is a listing that is not on the MLS. She may be holding them to sell to investors or retail buyers, with the pitch of "This house isn't on the market yet, but..." to draw a higher price and this agent would get both sides of the transaction, buyer and seller.

    You haven't mentioned how long she has owned the houses, years? months? weeks? If it is shorter rather than longer I would agree that she may be waiting out a period of redemption. Or she may see a trend in the market and she is thinking the price will jump. You know, the gambling type of investing.

    We can only guess what her exit strategy is. In the mean time, she is getting great tax benefits from the properties.

    1Reply
  • Justin B.
    Investor · Gaithersburg, MD · Member since 2013 · 659 posts · 441 votes
    12y

    Couldn't have said it better myself :)

    0Reply
  • Matt Devincenzo
    Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y
    Originally posted by @Justin B.:
    Maybe they are pocket listings for now?

    How would this be possible? She is the owner, meaning they would be her own listing unless she wanted to "pocket list" them to her investors. In which case it's not a pocket listing but a FSBO.

    I'm not tracking on this, could you explain how it is that you meant it?

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  • Bryan H.
    Investor · Willow Spring, NC · Member since 2013 · 788 posts · 285 votes
    12y

    I met a guy once that owned a vacant property next to one I was flipping. It was a wreck and he owned it for years. He was fixing up houses as rentals but was buying faster than he could fix up. He said he had 20+ houses in the same condition.

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  • Bryan H.
    Investor · Willow Spring, NC · Member since 2013 · 788 posts · 285 votes
    12y

    This person could also be a buy and hold investor speculating on appreciation. They dont want to deal with tenants and the place being torn up.

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  • Stephen S.
    OP
    Wholesaler · Holiday, FL · Member since 2013 · 571 posts · 221 votes
    12y
    She has held the property next door to me for at least two years.

    If she wanted to sell them to investors - or to anybody - why ignore my request to buy?

    What great tax benefits is she getting by holding a non-producing asset?




    posted by @Troy Weygandt:
    @Stephen S. A pocket listing is a listing that is not on the MLS. She may be holding them to sell to investors or retail buyers, with the pitch of "This house isn't on the market yet, but..." to draw a higher price and this agent would get both sides of the transaction, buyer and seller.

    You haven't mentioned how long she has owned the houses, years? months? weeks? If it is shorter rather than longer I would agree that she may be waiting out a period of redemption. Or she may see a trend in the market and she is thinking the price will jump. You know, the gambling type of investing.

    We can only guess what her exit strategy is. In the mean time, she is getting great tax benefits from the properties.

    0Reply
  • Justin B.
    Investor · Gaithersburg, MD · Member since 2013 · 659 posts · 441 votes
    12y
    Originally posted by @Matt Devincenzo:
    Originally posted by @Justin B.:
    Maybe they are pocket listings for now?

    How would this be possible? She is the owner, meaning they would be her own listing unless she wanted to "pocket list" them to her investors. In which case it's not a pocket listing but a FSBO.

    I'm not tracking on this, could you explain how it is that you meant it?

    Because he said she is a real estate agent :) Even though she's the owner, being a real estate agent, she has the means to market it like a pocket listing. BUT, going off new information about how she's owned it for years and seems to not want to sell, that's not likely. I was just throwing out a suggestion with the information I had.

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  • Matt Devincenzo
    Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    12y

    @Justin B. No worries I see where you were going, you just lost me initially when you said it.

    0Reply
  • Rob K.
    Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
    12y
    Originally posted by @Stephen S.:
    No I haven't spoken with her yet -

    But I now know who she is, where she works, I have a recent picture of her, and will make secret arrangements to approach her in person to ask my questions.

    You might end up with a face full of pepper spray. I think a phone call, or a personal letter to let her know that you're interested in buying her house, could work better for you.

    1Reply
  • Stephen S.
    OP
    Wholesaler · Holiday, FL · Member since 2013 · 571 posts · 221 votes
    12y
    That would be highly irregular way for a real estate agent to greet a potential client - at least around here.




    Originally posted by @Rob K.:
    Originally posted by @Stephen S.:
    No I haven't spoken with her yet -

    But I now know who she is, where she works, I have a recent picture of her, and will make secret arrangements to approach her in person to ask my questions.

    You might end up with a face full of pepper spray. I think a phone call, or a personal letter to let her know that you're interested in buying her house, could work better for you.

    0Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    12y

    "I have a recent picture of her, and will make secret arrangements to approach her in person to ask my questions."

    I would stay away with secret arrangements. Just be direct. I know many owners who are TIMING the market. Some owners have considerable net worth. Even if a property was a stinker when they bought it in the wrong cycle they have the power to hold on until the cycle gets high enough to drop for close to full value.

    I would just be cordial and say " Hello, I noticed your property at XXXX address shows you are the owner is that correct??"

    " What plans do you have for this property? " If they say why do you ask you might say " I own other properties in the area so I might have a possible interest in this one "

    "What we you looking to get out of it?" Let them throw the number first to see what they are thinking in their mind. Hope it helps. No legal advice.

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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    12y
    Originally posted by @Joel Owens:
    "I have a recent picture of her, and will make secret arrangements to approach her in person to ask my questions."

    I would stay away with secret arrangements. Just be direct. I know many owners who are TIMING the market. Some owners have considerable net worth. Even if a property was a stinker when they bought it in the wrong cycle they have the power to hold on until the cycle gets high enough to drop for close to full value.

    I would just be cordial and say " Hello, I noticed your property at XXXX address shows you are the owner is that correct??"

    " What plans do you have for this property? " If they say why do you ask you might say " I own other properties in the area so I might have a possible interest in this one "

    "What were you looking to get out of it?" Let them throw the number first to see what they are thinking in their mind. Hope it helps. No legal advice.

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  • Christy Glenn
    Investor · Brighton, TN · Member since 2013 · 78 posts · 17 votes
    12y
    Hello, I wish you the best in this situation. I see vacant properties all the time and just make sure I keep an eye on them. I have one down the street where I live that I am working on right now. I want to acquire that property but have a lot of work to do on it. I have another that I have been watching for the past year and found out that it was foreclosed and then owned by Tennessee Housing Authority and I called about it. They couldn't help me. That was a couple of weeks ago and now just a couple of days ago I see a Realty sign out front with bidder select with a inflated price but public records show how much the lender foreclosed on. It's irritating because I wanted to assume that property as buy-and-hold. All of this to say is you never know what's truly going on with it just hang in there and keep your head to the grindstone and just wait it out and see.
    0Reply
  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    12y

    Does she have a mortgage on the property? Is it in foreclosure? It really sounds like the actions of a property preservation company hired by the bank/servicer which is generally what they'll do when a property in foreclosure is found to be vacant. Just because the taxes are getting paid doesn't mean the bank isn't paying them. I'd do a public records search and you can figure out that status pretty quick.

    0Reply
  • Stephen S.
    OP
    Wholesaler · Holiday, FL · Member since 2013 · 571 posts · 221 votes
    12y
    Don't make it seem so sinister. <g> She is a real estate agent. I will just go to her office and generically ask to talk to her about buying a house. And only then give her her own address to discuss. Don't make it seem like I am going to suddenly jump out from behind a bush at midnight. <g>

    My question really wasn't anything about how to manage the meeting - I was strictly curious if someone could think of any logical reason for a property owner to act this way - because I sure can't. <g>






    Originally posted by @Joel Owens:
    "I have a recent picture of her, and will make secret arrangements to approach her in person to ask my questions."

    I would stay away with secret arrangements. Just be direct. I know many owners who are TIMING the market. Some owners have considerable net worth. Even if a property was a stinker when they bought it in the wrong cycle they have the power to hold on until the cycle gets high enough to drop for close to full value.

    I would just be cordial and say " Hello, I noticed your property at XXXX address shows you are the owner is that correct??"

    " What plans do you have for this property? " If they say why do you ask you might say " I own other properties in the area so I might have a possible interest in this one "

    "What we you looking to get out of it?" Let them throw the number first to see what they are thinking in their mind. Hope it helps. No legal advice.

    0Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    12y

    Hi Stephen,

    The use of "secret arrangements" was your wording and not mine.

    I wouldn't worry about why someone would do something. People do all kinds of things for various reasons that make no sense. All I care about is if the numbers work.

    I used to try to figure out the why when I had a 20 unit apartment building. I quickly learned I wanted to know if the tenants had the rent in full and on time? If not then they are evicted right away.

    "I will just go to her office and generically ask to talk to her about buying a house. And only then give her own address to discuss."

    It's your business but as a broker with 10 years in the field I wouldn't try that approach. Coming in with one approach to really try to do something else is misleading. It's builds distrust right off the start with the seller whether it's an agent or not. I find just being direct and to the point works best while being cordial.

    Hope it helps.

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  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    12y

    I ran up against this once with a lot adjacent to our home in NJ. When we finally got a response from the owner they named a price that was twice market. My theory then was that they really didn't have the ability to sell the property legally. There was a right of first refusal or something legally giving rights to someone for purchase when they sold the property. Can you judge anything from the previous taxpaper listed?

    I am not sure why someone would have properties like this all over town except that they are waiting out the market.

    I might discuss with her theoretically how you go about purchasing houses that are not up for sale. You might be able to get some information this way.

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  • Rob K.
    Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
    12y
    Originally posted by @Stephen S.:
    That would be highly irregular way for a real estate agent to greet a potential client - at least around here.




    Originally posted by @Rob K.:
    Originally posted by @Stephen S.:
    No I haven't spoken with her yet -

    But I now know who she is, where she works, I have a recent picture of her, and will make secret arrangements to approach her in person to ask my questions.

    You might end up with a face full of pepper spray. I think a phone call, or a personal letter to let her know that you're interested in buying her house, could work better for you.

    I agree. The way that you originally described made it sound like you were going to sneak up behind her with an ether rag.

    As far as approaching her, I would call her office and set up a meeting. I never liked when people would show up to my office unannounced.

    Hopefully you're able to make a deal to buy it

    0Reply
  • Joe Fairless
    Investor · Cincinnati, OH · Member since 2013 · 2k+ posts · 1k+ votes
    12y

    Maybe she likes sleeping in a different house every night.

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