Condemned property = Flip ?

Question

I have been driving by a house located not far from my current residence. I stopped by to see the notice on the boarded up garage which was from the city and deemed the property "condemned." I am not sure who owns the property  (bank or stated name on the document dated august of this year) but I am extremely curious to know how people feel about renovating "unsafe" structures. Thoughts?

Ideally, I'd love to flip or cash out refinance if I could find a partner with the capital. That part will come later perhaps but I'd like to find out about the initial situation before anything. The document stated "existing plumbing is in need of repair, existing electrical wiring needs correcting, interior walls and ceiling are in need of repair." The windows and doors are boarded up at the moment. The lawn seems maintained in both the front and back. Thanks BiggerPockets community!

Jackie Lange · Answer

Code Enforcement provides a list of all code violation properties in Texas.. by City.  They only have the address then a code next to the address.  Get their code key.  Some properties have Code Violations for a leaning fence or tall grass - pass on those.  Others have actually been deemed not habitable so they have been condemned.  When I lived in Texas, the code for a condemned property in Dallas county was RT (red tagged).  Some have a date set for demolition which really drives up the cost of the liens but you can usually negotiate for the lot value only.

Code Enforcement RT is a GREAT list to market to for wholesale flips.

If a landlord owns a condemned property, they can't rent it until all the repairs are done and a certificate of occupancy is issued.  There will need to be permits and inspections for any repairs.  There could be city liens to board up the property or mow the grass.  Plus taxes are due the end of January.  These landlords are extremely motivated to SELL FAST and for a deep deep discount.

All properties that have fire damage will be on the code violation list.

When you get a contract, be sure to include a contingency that you need to inspect the Code Enforcement file and get approval from your "investor group"  (person you will wholesale to).

Make friends with the Code Enforcement staff.

Jay Hinrichs · Answer

we do quite a bit of code enforcement work here I Portland.. the bigger the mess the more I like it.

I always go into the county and sit down with the officer in Charge lay out a plan and execute which includes up dates via e mail and pictures.. this goes a long way in getting cooperation.. and as stated above usually get the fines knocked in half or better.

Ned Carey · Answer

@David Trevino there are contracts including ones for assignment of contract in the FilePlace under the told tab above. Some of these forms are not very well written.

I love to help people understand the law. However reviewing a contract crosses the line to providing legal services, and I am not an attorney. I do suggest you read through some and try to get a feel for what they mean and what  makes a good contract. I also recommend taking some time to educate your self on contract law. You will get better service, better prices, and have a better understanding of an attorney's recommendations if you take some time to educate yourself about the law.

David Slovak · Answer

@Jackie Lange  @Ned Carey

Might you all know where I can find a link to a wholesale template?  I fear not wording it correctly, maybe BiggerPocket member has supplied one that I can look over.  I am not to sure where to look on the site but I truly appreciate the pointers thus far.  A potential wholesale deal on this property would be awesome.  Thank you again.

Worst case, I'm sure I can find something using Google.  :)

@Jay Hinrichs

I am not sure on the rarity of condemned properties for the area but it is the first that I have seen driving through B/B- areas in this city.  I hope that is a good thing on my end if I am able to do some good with this.  Fingers crossed.

Jackie Lange · Answer

It would be better to get a contract on this one - usually 80-90% below market for condemned properties - they do a wholesale flip.

Code Enforcement will have a file on the property which tell you exactly what needs to be done to get a certificate of occupancy again.  That information needs to be attached to the contract when you wholesale the property along with a disclosure that the buyer will need to get permits and inspections from Code Enforcement to do the rehab.

The City is probably mowing the lawn then filing a lien against the property.  These liens can be negotiated down.

You can Look up the owner and the deed date in the County Tax Appraisal records by entering the address.

Michaela G. · Answer

All it takes for a property to be considered 'condemend' is the kitchen sink or only toilet having been stolen. You need to take a look at the actually situation of this particular house and see what needs done

Jay Hinrichs · Answer

@Ned Carey Ned the only difference in our market is that the competition is SO KEEN  and these are semi rare.. that I usually just buy it first.. then work down the food chain... but these are in all cases that I do SCREAMING deals  LOL.s.. so you can stub your toe and still do fine.

Ned Carey · Answer

@David Trevino the exact meaning of condemned will vary from area to area. In my area, being condemned would not concern  me at all. All that is needed is to do  repairs and get  a use an occupancy permit as @Jackie Lange mentioned. However what would concern me is the actual condition of the property.

I would negotiate with the owner and get it under contract with appropriate contingencies. Then i would contact the housing or code enforcement dept and see if there are any immediate plans with the house. I would want a clear understanding of what they expect of me as the new owner and what it will take to get them to stop any planned action against the property.

Condemned property = Flip ?

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