Need help with offer strategy for oil in back yard

[Taylor C]

Wondering about your thoughts on this one...

The property is a foreclosure. It hasn't been on the market long enough to have any price reductions.

* Listed at 75,000
* ARV 135,000-140,000
* 3bed/2bath brick - stripped to the bone - needs floors, bathrooms redone (missing sinks and toilets), kitchen redone, new heat pump, junk removed, holes in ceiling and in walls, painting

Figuring offering roughly 56k

The thing is, we found out from neighbors that the owner fixed cars and dumped a bunch of oil in the back yard. I don't believe the listing agents factored this into their BPO.

So my question is do you make the offer and mention this to the listing agent, or do you wait to hear back - if they don't laugh at the offer and then mention this?

Thanks

[Don Konipol]

In 1999 I purchased a property built as an automotive repair shop in which the owner had been dumping motor oil out back for the past 15 years. I obtained 3 estimates from registered environmental clean up companies. the bids were $45,000, $48,000 and $3000. Being suspicious of the low bid, I contacted the Texas Natural Resource Commsion, spoke with the director and bought him lunch. Over lunch he told me the the company with the $3000 bid was the best one, they just were completely honest. I submitted a low ball offer to the court - the property was in bankruptcy. The court wouldn't all the trustee to accept my offer. I then submitted a slightly higher offer with the 2 high bids for environmental cleanup. The offer was accepted. I ended up paying $125,000 for the property. I contracted with the clean up company, after they finaished and the property passed an independent environmental test I was billed $2250, or $750 below esitimate. I promptly leased the property to a tenant at $3000 per month triple net. A couple months later the tenant offered to purchase the property cash at the appraised value. We agreed on an apraisor who valued the property at $310,000. We clsoed the sale at this price. This was one of two killer deals I profited with investing in properties with environmental problems.