Tear Down & Rebuild or Rehab?

[Sam Nawar]

Owner is an absentee owner/tired landlord living in the same county (Spotsylvania,VA) as my targeted property. It has 3bd/2ba. The property resides on 5 acres of land and has been absolutely trashed by the previous tenants. Therefore, the owner wants to sell the land itself because she says that it is not livable and needs to be torn apart. She is asking 93k as the lowest for the piece of land. The tax assessed value is 51k. I ran comps on similar land sales in the area and it was selling for 40-50k. Land is zoned as AG (agricultural) and have homes built on it. There are surrounding similar homes in the same street but were sold 5-10 years back. The ARV for the property with the land is said to be around $260K.

So yesterday, I went to go see the home. She was right, it was absolutely trashed and mortifying. The home's roof is bent, there is moss growing on the roof. The windows were broken and some were open (so possible animals/squatters living inside). Recently there has been really terrible storms so it may even be flooded inside. The land was trashed as well. There were trash everywhere. There is also two abandoned cars that are parked. One of them is wrecked. The other one looks like it could get sold at an auction to be fixed up. I have yet to see the inside yet because she didn't want to give me the key until I viewed the exterior first. So I will be getting the key this weekend to see the inside. Currently, I think it might need to be tore down and rebuilt. But since I haven't seen the inside yet, I need to see if the foundation is stable and if we can preserve the structure. Also, as i was browsing the land, I saw some kind of tent that was built with tarp, so there could be a possible squatter.

I called her back right away to discuss about it. I told her everything that I saw and what I plan on doing with it. I told her that it indeed needs to be torn down (even though it may not- trying to get her agree with me), needs full rehab & remodel. I told her about the windows, and the two cars. She said she had no idea the windows were broken. The cars are not hers and she said the cops were supposed to take them out of there. She also said there shouldn't be anyone squatters as the neighbors were supposed to keep an eye out. I told her that neighbors can agree to that but most likely will not have time to bother about anyone else's property but their own. She agreed with everything she was saying. She was so frustrated to hear about the things i had to say about it because she really just wants out of it. She has been paying property taxes and doesn't want to deal with it anymore at all. She is retired and just wants to enjoy her life without anymore "unnecessary ****" (quoted by her). I didn't offer her a price yet because i want to see what the inside looks like, so she agreed to give me the key and have a look at it. As we were talking we weren't just talking about the home, we also talked about her life, where she used to live/work, and we connected heavily as she used to live in the same city as I do now. I built superior rapport and she genuinely likes to speak to me. Overall, she is EXTREMELY motivated.

My questions are:

1. How should I proceed with this? Who should I contact in terms of estimating costs of full gut and remodel & landscaping? 

2. What should I do with the cars?

3. Is there any special documentation I need to have for this type of transaction? 

4. What financial factors do I need to keep in mind? Tear down cost/rebuild cost, etc.. 

5. Who should I market to in terms of buyers?

Please let me know any other advice/recommendations you have! Everything is appreciated!