Thoughts on Murder house?

Question

Hi All,

I'm running to an interesting property that may be a candidate for a BRRR type situation. Here are some of the details:

ARV: 120k

Purchase: 65k

Reno: 30k

Average rent is about 850-1000

However there is one catch to this property, there was a murder in the home. It was not a gruesome murder, however it still did happen. Overall the home is in decent shape, but I can't help but think that the potential stigma to this property may make it hard to rent out. In my state one does not need to disclose of this, but of course if asked need to disclose.

Another question I had, was that when the appraisal goes through for this property, could the history of the property potentially affect the value that the appraiser decides?

I am curious as to others that have went through a deal like this how it turned out. My plan would be to keep this as a long term hold.

Thanks BP!

Patricia Steiner · Answer

Two thoughts:

1.  The best way to "reinvent" the reputation of the property is to cosmetically alter the exterior so it goes from "murder house" to "cool vibe" house.

2.  Neighbors will talk.  They will tell everyone who stops to look at it.  Mitigants:  make sure the house doesn't look dreary/dark/creepy - with good exterior lighting.  Otherwise, prospective tenants will bolt.  And, have your story ready...year the house was built, that you renovated the house, it's close to (whatever).  If asked about "a murder," confirm it but assure them "the house killed no one"/was never implicated and that the guilty party is forever gone.

3.  Neighbors.  Go meet them. Tell them what you're going to do to the house and that you're seeking only solid tenants who will make for good neighbors.  Assure them that those changes will have a positive affect on their property values as well and the perception of the neighborhood.  Make it all about them - and they'll advocate for you.

4.  The appraiser will do research on the property and if the news account is located, you can count on some type of "human reaction" to be noted in the valuation.  Again, the way around that is to make the place as light and clean as possible.

Entertaining business we're in...

Brandon Ingegneri · Answer

the only thing better than the smell of cat urine is a murder house or a haunted house.

Mark Fries · Answer

@Phil K.

It means nothing, you are overthinking.

Bob Woelfel · Answer

The chances of your tenants or an appraiser knowing that this happened before moving or appraising is virtually zero.  It's not like they post the exact address in the paper or give it out on the news.  Now, your tenants will probably find out after moving in from the neighbors so you have to factor that into the scenario, but for the purposes of your numbers it really shouldn't matter.  After a few years of owning and having good tenants even the neighbors will stop talking about it.  Good luck.

Shane H. · Answer

@Phil K. my buddy has one in Wichita.

Not sure of the particulars of the murder in the one you are looking at but his circumstances were as follows.

His now wife was common law married to a former BF - they were together sometime and bought a house together - both were on the deed/mortgage -- She left the abusive piece of trash some years ago - her ex continued to live in the house and make mortgage payments...he had no money to buy her out and she never pursued getting her name off the deed/mortgage due to the legal hassle and expense.

Some time goes by - and in 2017 I think (cant remember) the ex strangled his then live in GF to death after a night of partying while there were roommates in the house...he's arrested - and I think he plead guilty or there was a trial.

My buddy's wife got possession of the house after the police were done - had to do some painting, replace carpet as the ex bf was nasty - don't think there was much remediation needed where the victim died other than new carpet as it wasn't a "messy" death and the corpse didn't sit there long.

Anyways sorry for the gory details - but it was publicized on local media - address wasn't highly publicized however I guarantee every neighbor around knew what happened.

So after everything shook out my buddy's wife's ex signed the house over to her and due to a lawsuit/lien put on the house by the victims family my buddy/his wife had to keep the house as a rental for a # of years until the victims families lien expires.

The house was in a highly desirable older neighborhood - it actually caught on fire (electrical fire I think) in the early 00's I think and was completely rebuilt with the ins settlement while my buddy's wife lived with the guy back then) so house was pretty unique having old design but virtually brand new on the inside -

She rented it in a weekend for a premium  due to how nice the inside was compared to other older homes in the neighborhood and they did tell the renters what happened - so far so good.

Long drawn out story but point is it worked for him - but they had an appealing product at the end as the house was very nice/done up right and in a great neighborhood to boot.

Account Closed · Answer

It depends on your state law and market.  Some cultures, for example, take issue when there has been a death in the house.  Depending on your market, another item I haven't seen discussed on BiggerPockets is feng shui.

I was at a rapidly-growing startup that needed a larger office space, but office vacancies were hard to find at the time.  The company finally found one, but it failed the feng shui test (a couple of the founders were Chinese).  At that point as a matter of practicality, these executives were required to agree a space was OK as long as their own offices passed this test.

James Barnhart · Answer

An acquaintance of mine bought a home where a few people were murdered over 10 years ago.  It was for sale a few years later, but no one would buy it, so he make an offer to buy it below the market comps, and it was accepted.  He said, I don't care about the home history, but it will just be a good rental.

Jill F. · Answer

I had an overdose death in a unit which I did disclose to the next potential tenants-- I didn't have to but I didn't want them to hear it from other tenants and feel like they should have been told. Almost everyone just shrugged it off. It's been almost two years now so I won't even mention it the next time I have to rent the unit.

Ned J. · Answer

I personally wouldn't worry about it much.....but I would work that angle on negotiating the price down as much as I could.

If I bought it, I would make friends with all the neighbors and let them know the house is getting a brand new beginning.....the past is the past and its an object, nit a person...... the house didn't kill anyone....

Mike D'Arrigo · Answer

@Phil K. Regardless of what everyone is saying, it's not going to be a selling point. Why start off with a strike against the property? We go through all kinds of effort to make a property the most attractive to potential tenants and stand out against the other choices that tenants have. There will always be those that will be turned off to it. You're reducing your tenant pool. Ask your property manager if they think it would make it more challenging even though it wasn't a "gruesome" murder.

Thoughts on Murder house?

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