Finding that perfect deal that meets all the rules is already so difficult, but there are some problems properties have that no investor can fix.
I thought I would make a list of some of the things that get me to pass on a property, no matter what the price is:
- Busy Streets
This is a judgment call, but if you have to risk your life to pull out the drive way, it should be a pass. The worst is a corner lot, of two busy streets. No investor can fix the busy street to a house.
- War Zone Neighborhood
When you are first getting started in a part of the City it is important to drive by the house at night. Most of the neighbors are home and you can see what the street really looks and feels like. No investor can move the house from a good neighborhood to a bad one. Your house will be vacant for a lot of the time you are working on it. If it’s in the wrong spot, it is going to get vandalized.
- Mobile Home at the Price of a House
A wholesaler tried to sell me a mobile home on a lot, for the price of a house yesterday. The sad part is she laughed when I asked her if it was a mobile home, so she didn’t even know. A rectangle layout, with a raised foundation and a 2/12 pitch. Banks don’t like these properties, owners do not like these as much. People make a lot of money in mobile’s, but s0metimes REO agents list them as houses, and use comparable sales of standard houses.
- Bad Additions that Cannot be Removed Easily
We are used to removing un-permitable, unsafe additions. But sometimes the homeowner has gone so far, that it is not cost effective to do anything with the property. I was in a property about a month ago, they converted the house to a duplex and split the house right down the middle and put a kitchen on both sides of that wall. We’ve seen that before, but they also converted the garage to living area and made some additions off the back of the house. I would not take this property for free, because it costs so much to get back to a livable condition there is no profit left.
- Former Meth-lab/Drug House Properties
In California, you have to disclose if you house has been involved in a meth-lab anytime in the past 5 years. I am sure there are people who specialize in these type of properties, but I would be very hesitant to get involved. They’re difficult to sell and there are a lot of disclosure requirements I am uncomfortable with it.
Everything else, I love to buy!