Many people in recent years have found their calling in house flipping. From young people looking for extra income to retirees growing their nest egg, buying low and selling high is a good way to earn money. But do these homes have to be minor fixer-uppers? They don’t, and some thinking outside the box can help you make the most of less conventional opportunities. Consider condemned and problem properties. You can buy a condemned property or abandoned home, and under the right circumstances, it can be a very good investment opportunity. It’s important to stress “right circumstances” because some condemned properties will never be worth your time.
What Is A Condemned Property?
A condemned property is one that the local authorities have judged as unfit for habitation. Municipal inspectors will condemn a property when it degrades to an unsafe and unliveable degree, usually after abandonment. In London, the process begins after a home has been vacant for 30 days.
Whatever the reason for the label, you’ll usually find condemned properties at a steep discount. A word of warning before we go further: these homes will need a lot of work. Condemned or abandoned houses are not for first-timers, and they present challenges even for seasoned real estate investors.
Finding And Working On Condemned Properties
Finding condemned properties to buy and flip can be a lot of work in and of itself. Rarely listed as properties for sale, in most cases, you have to have a connection to find the owner and a path for legal sale. You might have to go outside the traditional channels, including how you pay for the property. Some sellers may only accept cash, and you might only find private lenders willing to support the sale.
That’s not to say you should turn away from these types of properties. If the market is heating up in an area containing a condemned or abandoned home, the time could be right for turning it into an investment opportunity. Bringing a condemned or problem property up to code, however, could take a lot out of your budget. It won’t be one or two simple upgrades – the home will need plumbing, HVAC services, electrical work, and more services.
If the bank has foreclosed on the property, you could run into more obstacles. In Canada, lenders must price any homes in foreclosure at fair market value. They are often sold by power of sale, meaning the lender can sell the property outright without needing permission from the courts. This means condemned properties don’t always present a good opportunity for flippers, especially if they are doing the work alone.
One solution that makes the process easier is joining a property investment company. This way, your money funds the renovation of opportunities like condemned properties, and you don’t have to do the major work yourself. If you have a lead on a condemned home, get in touch with a property company and make the most of the opportunity! Contact us to learn more.