Dissecting A deal early on… - Posted by Myles
Posted by Myles on October 22, 2003 at 15:44:34:
I recently drove by a big 6 family that was boarded up. The exterior is in slight disrepair, and apparently it was fire damaged on the inside. I’ve phoned the Board of Health, the Fire Department, and the Building Department…and none of them have any record of the building being condemned or structurally unrepairable.
I looked up the owner and found that the property was purchased for $38,000 in 2000, but no mortgages are on the property. The taxes are one quarter late, with the next quarter payment due on Nov. 2nd.
To me, this looks like something worth contacting the owner about, so I can see the extent of the interior damage. Houses like this go for $200K + in the area.
My first question is…with extremely bad credit and a few thousand in funds, I’m wondering what my options may be. Let me speak hypothetical for a moment. Let’s say I speak with the owner and he’ll carry a mortage, and after figuring fix up costs, the numbers tell me this would be a profitable deal. Would I try and seek out hard money for the fix up? If that’s a possibility, I would have to sell the property to pay off the short term loan for repayment. Although this hypothetical deal would be profitable, the rents in the area are also pretty high, which would make this property a great income producing property year after year. No one I know (friends or family) could help with financing the fix up, so are there any other options to keep and hold the property if I could never get financed for a loan based on credit?
There is one big “if” on this property, and I’m wondering if anyone else has had experience with zoning laws. The area/plot was originally zoned commercial, but somehow was able to be used as a dwelling for years until recently. It has been (more than) two years since it was dwelling occupied, and is now considered an abandoned dwelling, and automatically reverts back to commercial only as it was originally zoned. (This is what the building dept. informed me) They applied for rezoning for residential use, but were denied in 1999. (must have been previous owner) They could not tell me if the new owner has re-applied, and you can only apply every two years on a particular property. If I could make this deal work, I could always do a “subject to” to make sure it could be used as a dwelling, but I’m not sure what the zoning boards use as circumstances in approving this. It does have residential homes across the street and to it’s right for a few miles. Anyone have any experience with a situation like this?
Thanks to all.
Myles