How to Buy Condemned Property?

Question

Hi--sorry if this isn't in the right area, I wasn't sure which board to put this in. I've spent the past two days reading every thread on BiggerPockets that mentioned condemned properties (and the first three pages of Google results :) ). But I have one question that seems incredibly stupid and obvious but I can't find a solid, detailed answer for.

That is: how exactly do you buy a condemned property?

What I mean is, I know you can drive through neighborhoods to find one, contact City Hall, the police station, Craigslist, et cetra. What I'm curious in is--can you find a condemned property through a real estate agent? If so, do you have to hire a particular real estate agent who specializes in condemned properties for that, or would any one that knows the area you plan to buy in be able to do that? Is this something real estate agents would consider worth their time? Would those be seller-owned properties only? What if the city owns it now--would my only option be to contact the city building department? In which case, would I need someone to represent me when I buy it, or would I (or the city) just have a contract drawn up? This is all assuming I'd be paying cash.

On a similar note, is there always a time limit to bring it up to code? I've seen 90 days and one year quoted a few times. Does it depend on the exact code violation and local laws?

I'm sorry that I have a lot of questions, but it seems like I've only been able to find pieces of the answers scattered all over and I'm having a hard time putting it all together to understand exactly how to go from A to B to C. :)

If it helps--I wouldn't be looking to buy for a few years. I'm actually not looking into real estate investment as a flipper or wholesaler, this would ideally be a home that I could live in after a gut (yes, I know, sounds silly, but I've done complete guts before and gutting and then living in a run down home has been my dream since I was seven years old, so I do know what I'm getting into in that sense and it's not the HGTV effect :) ). So I wouldn't be necessarily looking for the avenue of the most ROI. I'm just trying to plan ahead!

BL Sheldon · Answer

Hi @Mariele Storm, I realize the word "condemned" seems affordable, and I definitely understand that the word condemned implies that a property 'isn't gettin' any love' and so it seems like it would be easy to step into and just repair and move forward with the future. But honestly, the legal implications of that word means much more than that. It often means that a property is uninsurable, or has had a hazardous substance issue (like meth preparation on the premise - this substance's ingredients leave lots of dangerous chemicals behind and are exceedingly expense to remove from a location most often requiring special equipment and haz-mat clothing). It can also mean that the human waste (read 'fecal'), usually from long-term occupancy from squatters and vagrants has caused the property to be deemed uninhabitable without intervention. It is essential that you recognize that if a property has been condemned then the  health department and potentially also the taxation department have been involved, condemned properties come with legal issues that if you are buying you MUST resolve.

So instead of the word "condemned" I'd like to suggest that you begin looking for "opportunity" houses. In other words, begin looking for houses visibly in need of repair or attention and then going online and locating the name and contact information about the owner and contacting them directly about if they would be interested in selling to you.

You will find what you are looking for, it may just need a different label to find it! ;)

Lynnette E. · Answer

Where I invest the building inspector has the right to condemn property.  He can do it when it is not inhabitable, which just means that there is not water, heat, electricity and some form of sewage disposal.  So that can happen just because the water it turned off or the HVAC broke.  That helps to keep rifraf out of property when it is seasonal, or the renter did not pay the utility bill, etc.

He can also condemn a building if it will cost more than 50% of the value of a fixed similar building to bring the building up to a livable and safe standard.  Note:  that does not mean up to a modern decorating standard so paneling for walls is ok, orange shag carpet is ok, just not holes in the walls or floors.

Kenneth Garrett · Answer

@Mariele Storm

The term condemnation from a code perspective means the property is judged unit for occupancy.  It does not mean the building needs to be demolished, but that could be the case.  Some areas publish code violation properties.  You will need to check with your particular county and/or city.  As @Lynnette E. stated it could be due to no water or utilities.  Condemned properties are posted with a notice on the front door.  You could drive around similar to driving for dollars. Purchase would be through the owner or in some cases the city buys them up.

Lynnette E. · Answer

You would have to ask locally.  Start with the building inspector and ask if he does that by himself or if there is a hearing, ask exactly what the local process is to condemn a building.  If they do hearings, then you could get the hearing minutes, regularly.  Otherwise, you would need to call and ask.  Some areas may be more active in condemnations than others.

Unfortunately the actual process will be different in different locations.

Lynnette E. · Answer

You would actually find the real owner through the register of deeds, same as any other house.  But be careful because if it is condemned then there could be a lot of fees attached to the title of the property, from old water bills to sewer bills to grass cuttings, to eventually the stabilization or removal of the building.

And sometimes condemned does not mean there is anything wrong with the property.  Ask the condemning authority.  A house I asked about was condemned because the owner passed away and druggies were ODing in the house.  The city condemned the house only to keep the rifraf out.  Once it is sold the posting will come off:)

Mariele Storm · Answer

Ah, perfect, thank you so much, that's exactly what I wanted to know! :)

Mariele Storm · Answer

Gotcha--I didn't know about the cost ratio, but I did know about the rest. I guess my question wasn't clear. I mean, in order to buy the condemned home, who do I contact? If the building inspector was the one who condemned it, do I just start cold calling building inspectors and asking if there are any homes they condemned in the area recently? Same with police and fire departments... do I just call them and ask? It seems like people mostly mention just seeing a condemned house while driving around and then calling the owner from there, but I'm trying to figure out how to find the condemned homes and who to contact in order to buy them without that. Driving down every street in the city just doesn't seem efficient, especially in this day and age.

Thank you so much for answering my questions, Lynnette E.!

Mariele Storm · Answer

Lynnette E Thank you! Just to put a bit finer of a point on it: what condemning authority? Is there one per county, or does it vary depending on who condemned it for what? Trying to figure out these practical details is my main stumbling block.

Crazy. I know condemned can also be used for houses that are just missing something like a toilet, which seems so silly... but I guess a better deal for me, then. :)

Mariele Storm · Answer

BL Sheldon Yes---I understand. Finding something that is completely uninhabitable and making it habitable is exactly what I want. I am not the least intimidated or squeamish about something like that. The bonus of a condemned house is that condemned houses have a list of what needs to be fixed to no longer be considered condemned.

I realize plenty of people are silly and underestimate the work or plain disgusting filth involved, but I can assure you I am not one of them. I fixed up a house that was so saturated with animal filth that it soaked through to the sills and studs. The same house also had black mold. So... I know what I want here. :)

How to Buy Condemned Property?

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