Most real estate investors and real estate agents would agree that buildings or vacant lots that are clearly dilapidated, in disrepair, or otherwise undesirable are a lot of extra work and effort to buy and sell, and the They will pass up nicer properties. In some cases, this would be the right move, but often an unsightly lot or home just needs a little quick and inexpensive attention to get it back in salable condition. Having the wrong attitude towards unwanted properties can mean missing out on a big profit that will eventually be picked up by a smarter investor.
Many of these properties are vacant because the owners had been cited for code violations and did not have the desire or means to bring the properties back up to code. Sometimes they are houses that were inherited, but the new owners live out of state and cannot afford to travel to maintain the property. Be that as it may, the truth is that there is a lot of potential in this type of property.
In most areas of this country, code enforcement agencies do not patrol neighborhoods for violations. They generally act at the behest of their local governments, in response to neighbors’ complaints about a property. Once notified of a potential violation, code enforcers go to the site and inspect it. There are three types of code violations: construction, safety, and health. Building code violations typically include structural damage, broken or missing windows, broken doors, peeling or peeling paint, defective or missing exterior siding, etc. Safety code violations include missing handrails on stairs or balconies, broken steps, tree roots causing tripping hazards or falling trees, doors or windows that don’t close or lock, and improperly grounded outlets. Health code violations cover such things as pest or rodent infestations, standing, unmown grasses that could harbor snakes and rodents, standing water in yards caused by poor drainage, and severe mold.
If a property has code violations against it, the owner is notified and given an average of 30 to 60 days to remedy the problems. After the deadline, an inspector returns to the property and checks if the code has been met. Otherwise, the case is scheduled and brought before the local code enforcement board, which orders the owner to bring the property into compliance or face daily fines for each day of noncompliance after the deadline. If the owner still does not comply, the daily rates will apply. At this point, the code enforcement agency goes to court and transfers the court order to a lien against the title of the property. With this documentation in place, the county has the option of filing a foreclosure lawsuit against the bond. It is little known that violations against a property stay with the property until the next owner; this is called “running with the title”. That is, when a lot is sold, the new owner is responsible for making the property compliant.
Sometimes an investor will come across a property that is obviously condemned and needs to be demolished. In cases like these, the property owner is ordered to have the building demolished and the lot cleared. If they don’t comply, the county will hire a private company to do the work and then place a lien on the title of the property for the increased costs of demolition and cleanup. Even such a property has potential for investors, because the land is worth money to independent builders, low-income builders, and so on. These lots are also great ideas because they are already zoned for residential or commercial use, depending on the structure being demolished. Also, never overlook a vacant lot that is littered with trash, debris, and other debris. Most people shy away from such properties because they can seem intimidating, but sometimes all they need is a few dumpster loads and a lawnmower and they’re ready for sale again!
Real estate investors have great opportunities here. Whether the property has liens against it for code violations, is about to be demolished or is already demolished, or has demolition liens against it, all you have to do is contact the owner and see if they would be willing to sell the property (at a large reduction due to links). You’ll often find the most motivated sellers in these situations, because they usually live out of town and couldn’t care less about the property, or they’re just sick and tired of being hassled by the county and ready to ditch. of the property. property. Be careful, however, to make sure that before you bid on a property, you check with that district’s code enforcement agency exactly what violations exist against the property and what needs to be done to bring it into compliance. This way you can make an accurate assessment of how much money you will invest in the property to bring it up to code at the time of purchase.
Aside from driving around town peering through the overgrown brush to look for older homes, there are easier ways to find the properties in your area that have code violations or condemnation orders against them. Local agencies should be able to provide you with lists, or tell you where to go for lists, that include property addresses, names and addresses of owners, and information relevant to code cases, such as the nature of the violation(s). . This is public information and should be readily available.
So the next time you see an ugly old abandoned building, take a step back and look at the potential of the location, the land, or whether all it needs is a few tweaks.
I guarantee you there are investors out there who are just as capable as you are of taking a property like this and making thousands or even tens of thousands of dollars in profit on it; and they will beat you if they are a little more willing to do it.
