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Vacant Properties (Tips and Info)
| | Monday, November 03, 2003 @ 04:00 PM EST
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Contributed by: Chris Youngblood
Chris Youngblood Properties
Read more archived articles about Buying
Here is some info on Vacant Properties by me as requested by another member..
Drive your area!! Drive new-to-you streets and different neighborhoods all the time!! Look for propertys that are vacant, and when you see one, STOP!! (U-turn in the middle of the road type of stop)
Keep a notepad in your car in which you note the address, some details or features about the property, condition, neighborhood, size, etc.. You'll spend 10 mins walking around
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the home and taking notes on each vacant you find.. Longer if you get lucky and the home is unlocked (I go inside many vacants and inspect the interior when I can get in, though you run the risk of police involvement for theoretically trespassing. I have never had that happen, but many times I talk to neighbors that are nosy and wondering who and what I am and let them know my interest as well as ask them the story behind the home, neighbors are very helpful and informative).
You'll want to take your notepad to the courthouse assessors office (OR to the local title company) and obtain the property assessment, owners names and mailing address, and the amount of the existing loans on the home (recorders office at courthouse)..
Now that you know the financial info on the home and have seen it, you know at this point if you want to buy it, if so FIND THE OWNERS (this can be trying), talk to neighbors!!! Use the phonebook.. Call family members with same last name, etc..
Buy the house!! Vacant propertys make good sub-2s and are good potential lease-op's (if your a lease-op type of person if so I reccommend you read my post on "Delay In Filing of Deed").
I personally like to meet with owners in person, if they live locally GO SEE THEM it's time consuming yes, but deals only are made in person, I have had owners many times take my offers on the first contact and we close a few days later (signing of contract, deed or note, etc.).
My best three deals, oh wow, that's tough question many were good, but what comes to mind more is the horror story(s), I purchased a vacant rehabber that turned out to be a no-go, the expense, permits, etc. would have exceeded the value of the property rehabbed.. (this property was classified as "uninhabitable" by local gov, unbeknownst to me).. Beware of anything that is a major rehabber (structual work) and ALSO (other horror storys) verify that there are NO outstanding citations by the city/county that the property is uninhabitable, (some owners tear these posts down) and should you buy a house with an uninhabitable status by the gov. you will spend much heartache and money to try to get that resolved.. These problem propertys can be had for much better prices, but be sure you go into the deal aware of the problems you need to resolve and what expense you will incur..
On vacants those are some of the more serious problems that can bite ya in the butt.. But for the most part vacant properties are previously inheritated, seniors now in a senior home or with family, owners moved away, investors who don't care to manage the property and are lazy, rentals not filling, etc..
On vacants for the most part I prefer sub-2s if there is an existing loan, and if the seller has substantial equity I'll give them a note with monthly payments, if seller has little or no equity I give balloon notes to the sellers for 6 year term with early payoff discount of 33% in 3 years, and if I get a hell of a deal I'll cash sellers out at a substantial discount for their equity and take deed with a sub-2.. For the most part on most of my deals, I won't touch the deal unless I take deed to the property.. I don't care for land contracts or l/o's.. I prefer having deed knowing the property is mine and not have to worry about an owner changing there mind or backing out or dissappearing, or the owners debts resulting in liens being filed against the property, etc. Though you could always have a 3rd party (contract services such as many title companies provide) do the servicing and hold the executed deed for you, you would still run many risks in any deal in which you do not take title (deed).
Also be sure to have offers with you when you go visit owners and if you get real slick get a son/daughter, friend, neighbor, employee, etc.. to do some work for you and get them state licensed as a notary!!!! Take them with you, it's always nice to get deed and documents signed and notarized on the spot while the anvil is hot and you have struck your deal..
Chris
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