Rental Property Investor · Pittsburgh, PA · Member since 2019 · 530 posts · 511 votes
So I have a land contract in place (being cancelled due to terms violation) on a low-end cape cod. No big deal other than tenants like to not pay. It was a rental prior to the land contract.
When it was a rental, the tenants had a history of flushing hygiene products and clogging the sewer. I had it thoroughly snaked by a pro who found multiple clogs and removed them. No problems in 3+ years since.
Well evidently there was a backup. So instead of perhaps calling a plumber, land contract husband, who is a GC, decided he would tend to it. Now this might now have been an issue, except he went on vacation for 3 weeks leaving his dogs inside. So the neighbor called animal control. I gave permission to enter. Aside from the filth (they usually were organized but always had a stray soda can or Hi-C container laying around from the kids) they evidently fell off the wagon since last fall when I was last inside. Roaches and filth everywhere. But the kicker, husband decided to dig up the sewer?!?!
So code enforcement was called (and me). So now the house is not inhabitable because there is no sewer. Lovely!
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
4y
@David Lee Hall, III
We have bought a lot of defaulted land contracts over the past few years and have since stopped as they are too much of a headache. Between issues like you have, grass cut violations, other code enforcement violations - with your name on deed and a land contract borrower in there it still falls back on you as county sees it.
We had one with no plumbing because they wanted to renovate but had no renovation experience so they were using buckets. What’s worse is they had kids. It was awful
I have one right now where person refuses to mow the lawn. It’s in cuyahoha county so they fine us $400 every time…
Yep the joys of land contracts. This is also the stuff you don’t see on tv about what happens when you give people a chance.
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Yep, that's the first time I've seen that.
FYI: land contracts fail about 80% of the time. If they can't get a loan through the bank, there's usually a very good reason. I hope you got a large downpayment.
If you're doing a land contract, you have to take a huge down payment. Large enough to handle the worse-case scenario (many missed payments, major damages) and still turn a profit. 10% would be the bare minimum.
Had my contractor look at it that is licensed to handle the sewer issue. Problem is this is rust belt territory. It is a $40-50k house on an alley on a 1/3 size lot. Damage is $60-80k for repairs. Either the neighbor is going to buy it or it will be turned over to the city for demo. Not worth a $450-500/mo rental to fix. I could talk to my insurance and see if they would accept a claim, but given the value/repair #, it might be considered a loss. That call will happen Wednesday.