Found Nice Fixer Upper, But There Is 1 Problem...
I found a nice rehab in a nice part of town, but the property has been condemend by the city. So my partner calls her contact at the city building, and asks what the deal is with this house. He tells her that all that is wrong is some cosmetics, eletrical and other minor things. They are going to tear it down cause the neighbors keep complaining and it is effecting there property values as well.
Can I be a hero here and fix the property up and re-sell for a sizeable profit or let the city tear it down? And if it is possible (being that I get it for a good price) should I go through the owner of the property or what??
Thanks for any and all advice!!
Chris g
Seem as if you are not getting the whole story on the move to tear down.
Well the first step is to figure out how far along the city is in condemnation proceedings. Next step is to try to find the owner and see how much they are asking for the place.
Oddly enough sometimes ok houses get torn down just because there isn't anybody who's interested in stoping the city.
You also need to ask what your towns proceedure is in these cases. They could get a demolition order from the court, knock the building down and still not own the land. Usually in those cases they file a lien for the cost of demo. Sometimes you can buy the lien and foreclose and end up with the lot.
You maybe able to do that even before demolition. If the court has levied fines (and they almost certainly have) you could buy the fines and foreclose on the property. But you have to convince the city not to tear down the building in the meantime.
This is what I call the floating jigsaw puzzle kind of deal. Lots of pieces, all moving all the time. Time matters. You need to get your hands on as many of the pieces as possible and nail them down then you can work on the other pieces. But any one piece is enough to start putting the deal together.
Thanks for your replies!!
Also, I forgot to mention...it seems the owner was 2 months behind on his mortgage payments.
I don't know if this will complicate things or make him more inclined to sell.
I think I am going to try and find the owner. That maybe the best way for me to get a deal from this property.
Any more advice...
Thanks again....
Chris
You have to go through the owner. They must understand that when the city pushes down the house they will charge them about $4000 (in my area). Ask if they will consider deeding over the property to you. If you can work it out you will stop the city and work on stopping the foreclosure. Then you run around like a crazy person finding out what is wrong with the house, will the city give you time, what are the terms of her loan, and are there any other deliquent monies owed.
If it could be a nice rehab in a nice part of town the owner is certainly not very interested in solving their problem. Make it real easy for them.
Take the other advice on learning about the city's process.
Figure out what the mortgage is. There might not be enough money in it for you to do a deal unless you get the lender to discount.
John
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There are investors who only look for those types of properties. SOme buy directly from the city. It is in the city's best interest for you to buy and fix it up as this will improve their tax revenues as well. I would try and talk to the owner and then see where the city is in the process. IF you have a contract with the owner and present a plan to the city for "swift" renovation they should have little problem with a "stay". IF they did I could probably get one through an attorney for 90 days and get the work done before it went to a hearing.
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Hey all...
Thanks for all your advice. I will def. look into everything mentioned here.
BTW - whoever sent the PM to me, I cannot access it because I have not uprgaded my status here. Email me at **Please See My Profile** . Thank anyway for your message
Thanks again...
Chris
The deliquent mortgage may actually make things easier (shoulda mentioned it in the first place). Contact the lender see if you can buy their note at a discount. Maybe you can do that as simply as making up the deliquent payments and getting them to assign you the note. Talk a lot about the deteriorated condition and code violations and the demolition order. If necessary bring comps on vacant lots.
Once you have the mortgage, go to the city, explain you just bought the mortgage and ask them to forebear on the demolition til you can foreclose. Ask for a corporation counsel attny to accompany you to foreclosure court to ask for expedited service due to the deteriorated condition of the property.
If the mortgage gives you the right to do so you can begin your repairs and add them to the mortgage balance (almost every mortgage contains language giving the mortgage holder the right to do this). Make sure you hire a contractor to do all work (best is if you incorporate a contracting company, hire yourself to do the work and then charge top dollar for the repairs).
Using the mortgage and the deteriorated condition argument getting the foreclosure done should not be that difficult.
Voila, renovated house in your name.