Currently in the real estate investing market place there is an overwhelming presence of bank owned properties. Everyday these properties are sitting on the market overpriced and untouched. The condition of these properties varies so much. I have never seen so many properties modified incorrectly by the previous owners without permits. Permits and inspections are so important to make sure everything was done correctly. You simply now you have to fix everything and tear down everything else not permitted. If you have ever had to fix something after someone else tried to fix it you will understand what I mean. It takes so much more time an effort to correct these problems besides the added expenses. I have encountered so many of these properties. I would like to share a few encounters I have had recently in the past month.
I took pleasant ride with my realtor to a potential investment property in working class part of town. We arrived at cute little three bedroom two bath starter home. When looking at it from the outside it appeared to be in fair condition overall. The outside needed minor landscaping and the garage door had a discolored panel. As I walked in to the front I notice something seemed weird. The door opened the wrong way and the door jam was cracked and poorly repaired. The door seemed to have been only a few years old. As I walked in to the house it didn’t seem too bad. It only needed so far carpet and paint. There were a few holes on the walls that needed to be repaired. I was amazed when I turned into the kitchen everything was in good condition not even a broken door on the cabinets. I took a few steps forward and turned to my left. A beautiful nicely done addition was added to the house. I walked up one of the windows and decided to open it. I began looking at track of the window and behold the old window frame was still there. They installed the new windows without removing the old frames. I was curious if all the windows were done like this. I went from room to room every single one was like this. Now a fairly large expense was just added on top of this potential project’s offer. Both of the bathrooms needed to be completely redone. I mean there was rust in the tub and shower. The vanities were broken and smashed in. The master bath room was the most interesting. They installed siding over the window on the outside, but left the window. I didn’t put an offer on this property I just planned on waiting until the bank was willing to move on the price.
My realtor gave me a call and told me she had just received a new REO property from the bank and that I should check it out. The house was located in the older part of town. As I arrived at the house a contractor was there getting an estimate for my realtor to give to the bank. The outside looked in pretty good condition besides of a couple of modifications that needed to be fixed. I stepped into the house and looked around and walked right back out. The house was completely covered in mold. I mean everywhere the floors, walls, and ceilings. I ask the contractor if there was mold like this throughout the house. He just knotted his head and laughed. He told me that he was just estimating a sixty-thousand dollar minimal job cost before me. I just walk away from this house and didn’t walk back.
Be careful out there and if you are making offers without seeing these properties make sure you have your inspection periods. I just found out the house with mold had a cash offer two and a half times larger than mine would have been if would have offered. That person was so lucky that the offer was rejected.
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