Buying a condemned house. Bad idea?

[ChriswUfGator]

COJ will normally waive most or all of the code fines that existed prior to your ownership, just meet with the code officer for that district and ask them to get you on the docket for the next special master's hearing. They're actually pretty reasonable about it, just tell them what you're planning to do with the renovations, etc., and they'll generally make a kind of deal with you, where you do what you're supposed to within X amount of time and they'll agree to waive some or all of the fines.

But the taxes though, are a whole other story. 99.9% chance those aren't going anywhere. So if it's in arrears 3+ years, and the arrearage is enough to take a big bite out of the budget, then you may as well just find another place. They virtually never waive property taxes for individual landowners.

[fatcat]

I bought a commended house last year and fixed it and rented it. I am proud to say it can be a great cat condo if the real estate market is better.  This was my process, it may or may not be useful to you:
1. look up the unpaid tax on line or make a visit to Mr. hogan's office. You can insisted that the seller pays all tax he/she/it owes before/at closing. If buying from Mr. Hogan, include this in your negotiation.
2. visit the code enforcement on museum drive and ask for a copy of the citations. If you let them know you are the buyer, they will direct you to the officer that handles the settlement etc. Usually for a fee, you can reach a comprise with the city. You agree to fix it up to code within a year or two years. They agree to waiver or significantly reduce the fine.
3. fix and have it inspected.
4. Reinspecting by code enforcement after the building department and after all the permits have been properly closed.
5. enjoy.

[peestandingup]

Thank you all for the great feedback. I'm still waiting to hear from the city person in charge of the code violations on this particular structure. If I dont hear from them by Mon afternoon, I may just go down there.

The thing about the taxes too is that I feel that they're way way too high for the actual structure. The county has the market value of the house at nearly $70K. Yeah right. A $70K house that was probably abandoned 2 years ago, has been gutted & has so much structural damage that it might be bulldozed. So even if this place went to a bidding tax sale, someone would be insane to buy it for the overdue taxes + building code violations + the fee for the demo (if the city does demo it). I guess I'll see what I can find out.

P.S. I kinda dont want to say the address just yet from fear that an investor or someone else with some pull will try to go after it (I've had bad luck with this). Its not cause I dont trust you guys, but I dont know who else is gonna read these forums.

[Dan B]

I saw a very nice bungelow FSBO over on E 4th st, between liberty and Market today.

There is another nice one fsbo near the corner of 6th and Laura (on 6th, between Main and Laura)

[cindi]

i think the one on the corner of 6th and laura is under contract

[ChriswUfGator]

Obviously, YMMV, but I usually found the FSBO's were even more overpriced than the ones listed with an agent...

Half the time the reason they're FSBO to begin with is that no agent would take the listing at the price the seller wants, or their personality type is such that they want to squeak every last dollar out of the sales price and are too cheap to pay a broker's commission.

Either way, it's pretty tough to run across a good deal on a FSBO. Some of those people are really just nuts with what they want for the places, and you know you're in trouble from the get-go when they won't put the price on the for-sale sign. If it's a run-down FSBO, then there might be an opportunity to get a deal, but you're still better off buying directly from the mortgage lenders.

[Dan B]

My experience has been counter to yours. I have purchased two of the three houses I have owned, and sold one of them FSBO.

I have made out very well every step of the way.

Is it riskier? Yup. Agreed. That is where doing your homework comes in. Know the value of the home, and dont be worked above a number your comfortable with.

[mtraininjax]

Go REO, easier to get a good deal and you will know what you are getting into, FSBOs just hide the fact that owners get attached to their homes and 99% of the time don't know what the real value of their home is.

[ChriswUfGator]

Go REO, easier to get a good deal and you will know what you are getting into, FSBOs just hide the fact that owners get attached to their homes and 99% of the time don't know what the real value of their home is.

+1

That's been my experience, over the course of buying a few dozen properties. I think I had one or two FSBO's that actually worked out. The other million FSBO's I looked at were overpriced as hell, and the people were out of touch with reality and content to sit there for the next 20 years muttering "I only need that ONE buyer who 'sees' it...".

If you want a deal on anything, you don't have time for that. Go buy straight from the lenders, it's less work and you get a better deal. I'm telling you, most FSBO's are FSBO's because they're too cheap to pay a commission, or they can't get an agent to mess with the listing. Either way, you're in for trouble. REOs are definitely the way to go.

[Miss Fixit]

ChriswUfGator is absolutely right - there are a lot of overpriced FSBOs.  However, I wouldn't rule them out - sometimes experienced real estate professionals go that route because they know enough about the market to sell themselves and avoid paying the commission.

There are a lot of overpriced bank owned properties out there, too!

[samiam]

Buying a condemned house is not necessarily a bad idea My first house here was condemned and on the verge of being torn down. I saved it and I'm very proud of that fact. It will be here for another 100 year do to me

[avs]

My house was condemned when i bought it.  We renovated it and I wouldnt trade it for anything

[peestandingup]

Update. I got hold of the head code enforcement person & she said she was almost positive it was coming down. Top floor was collapsing, plumbing problems galore, raw sewage was inside the house, foundation problems, a couple crazy people were "squatting" in the house that had be forcibly removed, etc. Ugh, sounds like a nightmare. But I have heard of worse places getting fully rehabbed, so I dunno.

She said what would happen is that if the property did sell at the upcoming tax sale, then whoever bought it would be responsible for the demo cost & everything else. And if it didn't sell, it would have a lien put on it. So either way, whoever buys it is screwed sounds like it.

Oh well, I tried. Shame the city cant work out a deal with me on it. If anyone knows any other tricks, I'm all ears.

[Dan B]

Can you post the address?

[buckethead]

ChriswUfGator is absolutely right - there are a lot of overpriced FSBOs.  However, I wouldn't rule them out - sometimes experienced real estate professionals go that route because they know enough about the market to sell themselves and avoid paying the commission.

There are a lot of overpriced bank owned properties out there, too!

Good one, Miss Fixit!

Turns out; Banks want to maximize profits and minimize losses!

(just like individuals)

I AM NO REAL ESTATE INVESTMENT PROFESSIONAL!

a little disclaimer there, But if I were to buy a condemned property to rehab, I would look to purchase it for the value of the land. Rehab to a condemned property costs more than new construction in almost any scenario. Where much of the structure is intact with a healthy portion of the square footage in livable condition being the exception.