Would you make an offer on a house site unseen?-

[Eric Robertson]

Would you make an offer on a Freddie Mac condo site unseen? Property cannot be viewed due to fire damage. Listing agent claims insurance repairs have begun (verified), a 6 month schedule is proposed until unit will be safe enough to inspect. agent is unsure of total insurance coverage within unit itself and cannot define total scope of work. Property is listed at 1/6th of recent sales. Should I contact the contractor? Insurance company? Freddie Mac? Low HOA, good rental rates and area. Advice would be appreciated.

[Drew Castleberry]

Originally posted by @Eric Robertson:

Thanks for the input Dawn. This opportunity interested me because the listing claims to be for a completely new condo unit once insurance repairs are complete. Is there any way to protect myself if making an offer? Or should I run away unless the repair scope is defined? In your experience how are insurance claims handled within a condo unit between building and individual units? I stopped over last night and all interior drywall has been stripped from studs and each unit gutted. Property listed for ~9K, I have comps inside the complex for 60K and rentals are available for $850-$950. According to the listing agent he has 7 offers the highest being about "double" the listed price. 

Thanks again for responding

Eric

 Buying something sight unseen isn't uncommon, I've done it several times, but I wouldn't recommend it on property with any type of significant damage, such as fire. The big thing is that you need to protect yourself in the offer. Always make it contigent upon an inspection. Being that you've now been able to walk the property you can see the extent of the damage.

One thing you need to find out is if you are buying it as is, or if they are going to finish the rehab (assuming its through the insurance company). If you have do the rehab, from a cash flow perspective you can probably cash flow well as long as you have low HOA and taxes. But if you have to rehab it and it sounds like you'll have to purchase it for at least $18-20k, you can easily blow through a budget of $40k.