Bank Owned Pee House

[Paul Miller]

Hello - looking at a Bank owed 650 sq ft 2/1 in a C+ neighborhood. I affectionately refer to this prospect as the Pee House as it reeks of pet urine. The prior owner had small dogs and you know the rest of the story. I have been in the house and attempted to locate the worst areas for the salts of urea with a uv light. No luck and when I took my mask off, the whole house generally smelled the same. No sign of mold. Carpet over hardwood floors in living room, bdrooms. Hole in floor in living room. Gas forced air for heat. Ok looking water heater. Needs kitchen, bathroom, bedrooms, living room, laundry room rehab. Basement is stand-up crawl space, dry, concrete floor with poured concrete foundation. Does not smell as bad in the basement. Exterior is aluminum siding, needs a new roof and some exterior trim work. Good bones, needs total rehab. ARV is about $65,000; asking price is $33K and rehab estimate is $35K. At 65% of ARV I would have about $42,000 to work with. I need to, of course, get a better purchase price. This would be a Buy, Rehab, Rent, Refi deal. The rent will carry $675/mo. The bank has a major problem here as entry w/o a respirator is just not possible. I am happy to solve this problem for them but the price has to be right. How low have you seen banks go on pee houses? What have you seen work and what advice would you give with bank owned houses that are clearly a problem for them? Thanks for any feedback!

[Michael Woodward]

@Paul Miller,  Sometimes banks are aware of specific problems like this and will negotiate accordingly and sometimes they are not aware.  You will probably need to call the person that has it listed and ask them if you can submit your evaluation of the property to the bank (or asset manager).  It's worth a try but sometimes they will only make price adjustments after a certain amount of time passes.  If it doesn't sell for a long time, they'll know they have a real problem on their hands and will start dropping the price.

I've run into the pee problem many times (I'm working on one now) and have done a lot of remediation research.  Tearing out the soaked wood is always the best option for a very badly soiled house.  If it's not that bad you can try a combination of several things.  

-Enzyme solutions are available at pet stores and do a great job of eliminating odors because it's basically good bacteria eating bad bacteria.  Pour it on and let it work.  

- Bleach will kill bad bacteria but it also kills good bacteria so you can't use it at the same time as an enzyme treatment.  It's also horrible on your lungs so be very careful.  A full-face, chemical respirator in mandatory!

- You can rent an ozone generator from your local equipment rental store.  Ozone will kill anything living inside the structure so be careful with it (remove plants, people, pets, etc). This will help with the general odor but it won't penetrate the wood to kill buried bacteria. This is usually not very effective with pet urine.

- If you choose to cover it with something there are only a few things available that will stop odor molecules from re-entering the room.  Paint, Kilz, stain, etc are too porous so odor molecules can find their way through.  The preferred coating is shellac. It's molecular structure is very dense so it works really well.  It's available online or Lowe's and Home Depot.

Good luck!