A buddy and I have been discussing for awhile finding an investment property together. I have been a wall flower on bigger pockets, it's podcasts, and I am an avid reader of all things real estate. The plan was I would help finance and be a private money lender and he is a general contractor that together we would share the profits from a flip or he would buy me out for a rental. He has done a wide range of work and built several houses from the ground up. I believe in his skill and I can be handy as well just lack as much time. He found a what looks like a great deal. So today's big first is we checked out and analyzed our first potential property. It was a 3 -2 on an acre of land which had been on the market for over a year and had dropped in price from 105k to 79k bank owned repo. Some listings say it has a 2 care garage detached but no pictures. We drove out to the property which was very secluded, way off the beaten path, after a recent snow required 4 wheel drive to access. Waiting for banjos to start playing. When we arrived there were a few people with a camp fire over by the garage. Later found out it is the opening of deer season where he got his first deer of the year. After looking at the property the house is really in not that bad of condition. Mostly cosmetic maybe 10k to update. We couldn't believe nobody had bought it yet. What is wrong? Before we left we were greeted by one of the guys and turns out he is the previous owner. "Ya know you have to buy the lot next door before you can buy this one." Excuse me. "Well this house is built too close to our property line and you would have to move the house." Turns out he owned 2 acres of land and mortgaged the first acre with the house and defaulted on that loan. He says he is just waiting for someone to buy it so he can sue them. The two car garage is actually a metal garage on his property and he thinks he has an acre and a quarter on his side which if the house comes with an acre doesn't add up to 2. He wants 50k for his garage and the rest of the land which is high for the area but maybe worth it if he goes away. It would be the only way it would work. That for the last two years he has been giving the banks and realtors a hard time. The property is also landlocked by another owner. We were told there is a right of way easement but it is only 15 feet wide. The gentlemen while telling us his story said that he was grandfathered but an easement is supposed to be 30 feet and we would be trespassing. He had also mentioned that the house had lost its occupancy use a few years ago. Researching now to try and figure out why. Should have asked. Also trying to figure out from title about the easement. He gave us the low down on the well and septic and he really hates banks and realtors. Part of me is this is not worth the trouble but the investor\problem solver wants to solve it and sees a gain for doing so. I am considering once I have all the other facts offering the bank a low ball offer contingent on working a deal out with the prior owner. The bank hopefully will be happy to get rid of him. Then without the realtor talking to the guy to see what he really needs to just end the feud and go away. Unfortunately he may not really be willing to sell that he just enjoys sticking it to the bank and realtors and doesn't want to give him his hunting spot. I really think that if I can add the acre back to the property and get a good deal on the house that it doesn't need that much work. I know there are all types of people but the owner of this house would really be looking for an outdoor lifestyle that is remote and private. I am concerned about how long it may take to sell something like it. My buddy and I may have found a diamond and all we needed to do is solve a few people's problems and polish it up. What do you think? Any advice? Lessons learned? Additional questions to ask? Ways to approach the former owner?
