Reallllly long shot for realllly cheap

[Mike F]

Hi everyone. This my first thread and post on this forum and I have some questions. I have been doing some pretty serious thinking lately.

Please read this with an open mind.

There is a property relatively close to that has been vacant, power off I believe, for probably close to 13 years give or take a couple.

Through some research and some networking I am in a place to put a reasonable offer on the property and through casual conversation with those who own it I have come to basically learn that the property would be sold for LITERALLY next to nothing, pending probably a few thousand in taxes.

My concern with it is water, in the basement. Remember the house has been sitting, power off so if it were a sump pump system this is now an issue. I know the concerns are mold, its abatement, and then all the issues of rating and repairing related to it. I am familiar with seller disclosure etc..

The property is pretty well overgrown, nothing ridiculous, nice and lush in the summer though :).

This scares the snot of me.

The positives are the area(secure safe neighborhood, close to highways, quality shopping, good schools etc..), the size of the property and lot and the fact that up until it was vacated it was maintained perfectly.

There is a serious profit to be made. I am in great contact and relationship with contractors etc.

I appreciate any and alllllll feedback. I do understand the potential for mold is no joke. I am all ears. Thank you everyone. :wink:

[Ann Bellamy]

Get the property under contract subject to a satisfactory inspection, then take an inspector and contractor to the property. Understand that most issues such as mold and water can be converted to a dollar amount. So while you have to address it, it's not necessarily a deal killer. Just harder for a new investor to manage.

Calculate your cost to repair, to purchase, and to carry. Most new investors underestimate all of these costs, so add 10% to your rehab budget no matter what number you come up with. There is a free spreadsheet on my website called a Deal Analyzer. It won't estimate your specific costs, because it is specific to MA and NH, but it will help you understand some of the costs involved and remind you not to forget things like water/sewer while you hold, etc.

Have a local investor-friendly realtor give you an after-repaired value, then deduct at least 10% - maybe more - from that, because I believe housing prices in Buffalo are still declining. If I'm wrong, then deduct at least 10% anyway, for two reasons: 1. You want to sell quick and not hold out for the last dollar, and 2. It's almost a guarantee that your realtor will overestimate the after repaired value.

You will then be in a position to post these numbers in this forum and get some serious advice from other investors, some in the Buffalo area.

The 4 most common mistakes new investors make are:
1. overpaying for the property
2. under-estimating the cost of the rehab
3. taking too long for the rehab (costs more $)
4. under-estimating the carry costs

Good luck!