Need opinions on an occupied “dump” - Posted by LK
Posted by LK on June 15, 2006 at 21:33:16:
I hated to call it a dump, but couldn?t think of a better term that fit. I have a contract for $15,000 on a 1200 SF 4/1 SFR that is occupied at $350/mo rent. Contract is contingent on septic inspection and structural inspection. The house is awful. Uneven, filthy floors, holes in walls and ceiling, primitive bathroom/kitchen, bad plumbing, bad wiring, leaking roof, etc, etc. The house needs to be torn down, not rehabbed. With $35-$40K in repairs the house may be worth $75-$80K. Tenants have been in house 4 years making minor repairs and want to stay. They would like to buy but don?t have a down payment.
From a preliminary investigation, I can see the septic system has problems, although the owner stated that she spent $4000 on repairs recently. So, with that said, I can walk and probably will. I may use the septic problems as a negotiating tool to get the price down.
My first thought on the deal was continue renting for $350/month to pay off the purchase price and at least have a free and clear lot.
The problem for me is the liability and maintenance of renting such a bad property. If I did a contract for deed it would take away liability and maintenance but leave me with a dump if I get it back.
I know the consensus here will probably be move on, but I like a challenge. On a side note, there is a vacant lot adjoining this property (both .5 acre each) that I can get for a good price. This would give me 1 acre in a fast growing area with new subdivisions being built close by.