Wholesale condemned property

[Iyana Williams]

I’m a rookie to wholesaling homes. However I’ve notice to homes that has been vacant for quite some time , I’ve even went the extent of contacting the owner . Luckily the owner has gained inheritance for both homes (house and a double wide trailer) and he then go on to tell me that the properties are about to be condemned because it’s in a flood zone. Could this be a deal and what will the risk be behind this ? I need help .

[Jim Goebel]

Hi Lyana

I'm sure this will depend heavily on your local jurisdiction.  I don't have a lot of experience with condemned homes but we had one under contract.  We didn't know it was condemned until getting close to closing and we ended up passing on the deal.  As explained to me, the process of something being condemned does NOT mean it needs to be demolished, at least in Des Moines.  It's basically a process by which the regulatory body lays out a list of things that need to be corrected.  They have a schedule/timeline under which if the stuff is NOT corrected, then the house IS demolished and there's lengthy process and courts involved in those decisions....  The house was already on the margin and would have been a tough sell from a reward vs. time invested, but the added list and regulatory attention we felt was just going to add lots of costs to the project....

In your case, it sounds like this is more related to the flood plain than anything else.

At least here in Des Moines the city ends up taking control of much of the flood plain land simply because of these kinds of issues..  It's un-buildable land and the perception is that it doesn't have much value.

When I say un-buildable -------

Someone of course can build on it but that may be different story than getting a bank to finance an asset, getting it insured, etc...  Just depends on what the situation is exactly there but perhaps a better word to describe this type of REAL estate may be unbankable.... not unbuildable.