Horder ?

Question

I have been looking for my first property to buy and hold.
I viewed a property today that was in great shape.
What I was able to see of it anyways.
New roof. Very well done remodel of the upper unit (2bd 1bath) (vacant)
Lower is the issue.
Without going into details I would label this person as a horder.
My agent is getting us a walk through of the lower unit asap.
I havent actually been through the unit, but the basement, the garage, what is visible from the outside. All signs of a horder. pack rat. nester. whatever you would like to call it.

Has anyone ever dealt with this ? Would it be possible to require the property to be vacant at the end of close or any other advice ?

Rick H. · Answer

The real money in real estate is made by solving problems that other people either cannot or will not (or prefer not to) solve on their own.  This is how you add value.

Here's a multi-million dollar bit of advice: focus all your marketing efforts on searching for deals that you can add the maximum perceived added value.

When vetting prospects, eliminate the ones who do not see a great value to your solving their problem.

This can be made more difficult when dealing through agents who see their jobs as listing form fillers.

Jean Bolger · Answer

Sounds like the hoarder is the tenant, not the seller? Be sure you factor in the possible cost of taking on a hoarder as a tenant. You can try to have them out before closing, but if they have a lease in place that may not be possible, as you'd have to honor the lease. And your chances of getting a hoarder out with "cash for keys" is not good. People with this habit (well, it ranges from a "bad habit" to a full-blown psychiatric disorder) have a complicated relationship with all that "stuff". They can't see it for the junk it is, it's important to them somehow. Which makes moving very difficult. It's hard (or impossible) to rationalize packing it up, so they just won't (can't) get around to packing it up.

You won't know how much crazy you're dealing with here until you're actually dealing with it. Might be no biggy, might be an epic and unpleasant eviction scenario. Only you can decide what the likelyhood of drama is, and if the deal is worth the drama. Or if you're ready for that on your first deal

Steve Babiak · Answer

I presume you intended to write unoccupied rather than vacant, since the place is expected to be quite full of junk :)

Steve Babiak · Answer

That only worked because the personal property belonged to the property owner. But in THIS thread the hoarder is a tenant so the seller cannot give the buyer any if the tenant's personal property.

Rachel H. · Answer

If the hoarder is the tenant, it's best to make the contract contingent on the property being vacant with a final walk-thru before closing. If there are issues with the tenant and their personal items, you can always offer to help out in the negotiation process with the seller.

Good luck!

Shaun Lapsley · Answer

thank you @MELISSA MOORE viewing some additional properties today and then having lunch with my agent . I have alot Id like to discuss with him . (hes not just a agent, also a investor and highly knowledgeable, maybe will mentor me)

Melissa Moore · Answer

@Shaun Lapsley  Dealing with that right now!

I asked for a home inspection for when tenant leaves (I have up to 10 days after) in contract. This gives me the option to walk away if I 'missed something' major that would throw off the numbers.  I have already factored in large dumpsters for estimates and new flooring.

Jeff S. · Answer

The cat pee thread was ridiculously crazy but at least the premises were vacant when title transferred.  You normally don't want to buy a property like this occupied since evicting even "normal" people can cost a fortune and take forever if they don't want to leave.  In fact, since this is a buy and hold, you might have a hard time getting a conventional loan on this property once the bank does an inspection.  For this reason, you might remind the seller of the limited buyer pool when you negotiate.

You'll often want a term in your contract that the premises will be delivered vacant at closing.  In the case of a hoarder, you absolutely don't want them in the home at closing. One reason for this is that hoarders fall under the ADA, a federal civil right law, and can be considered a special class adding an additional layer of legal turmoil to an eviction you don't already want.  Read here. I'm curious how hard he or she will fight the eviction next week, but don't be surprised how it ends up.

We've been involved with loaning on several hoarder homes.  In all cases, the buyers (our borrowers) required a vacant property at closing.  Cash for keys could work except, as @Jean Bolger noted, hoarders could have an attachment to their possessions that even cash can't separate.  There are other options that you might consider.

In at least one case, our borrowers wrote into the purchase contract that they agreed to offer a credit for a 25 foot U-Haul to enable the owner to move his possessions if he chose, or to allow him to leave his house literally shoulder high in garbage, at his choosing. Ok, it wasn't written exactly like that.

Given the opportunity to leave his problems behind, clean slate and all that, we all figured he'd just leave or maybe pick through his trash.  To our amazement, he jam-packed the U-Haul to the brim and drove off leaving an ordinary amount of debris in the house, plus many trash bags in front that wouldn't fit.  In fairness, none of us understood his illness and shouldn't have been surprised. He was surgical nurse.

Don't underestimate the severity of what could be a serious disorder but also don't allow it to become your problem.  Let the current owner of the property deal with this as part of your negotiations, Shaun.  Hopefully, this gave you a few ideas. Good luck.

Jeff

Mike Gennaro · Answer

Yes, we've dealt with this before, and yikes! Try to get this issue outside of the owner's hands if possible. If you do allow them to do the "cleaning", be wise and add an addendum to the contract that says they have to pay rent for additional days that they stay to remove junk.

You can put it in the contract to have them remove all of their trash, but in practice it will never happen.

If the home owner is really a hoarder, removing the junk would trigger a negative psychological response disallowing them from doing so.

In our experience, they home owner stayed an extra week picking through their trash with the help of a dedicated friend. The companion ended up doing any of the actual trash removal, which was very minimal.

We had to ultimately pay a crew to come and pick up the trash.

Conclusion: This is a serious psychological issue you are dealing with, so set yourself up for success and charge rent or just pay out of pocket for the crew to clean.

Shaun Lapsley · Answer

@Rick Harmon @Jean Bolger   @Priscila Argaez @William Murrell Thank you all for commenting ... So, the tenant is being evicted , court is wed , I have a apt with my agent and the seller agent wed, same day. I advised the agent that I would be interested in factoring in trash removal and pest control cost. The owner is very meticulous and may want to do this all himself to get higher bids.Any further advise would be great.

Horder ?

Most Popular Reply