The real estate market is heating up again, and that means that many investors are looking for properties that they can make a profit on. Unfortunately, with so many people looking to buy, a lot of inventory is overpriced and hard to access. When a good property is found, it seems like it’s immediately purchased by someone else, making this a frustrating time to get in on real estate.
What if you could find property for sale before anyone else had the chance to look at it? Identifying homes that are about to go on sale is a great way to minimize your upfront costs; often homes can be purchased without paying realtor fees. Finding homes that are about to go up for sale can be tricky, though. After all, how can you tell what is going to happen in the future? Several investors have found a solution to this by looking for abandoned homes.
Abandoned homes are actually properties that do not currently have a resident. In many cases, they’re in disrepair, but oftentimes the homes can be made livable again with a minimal amount of time and investment. Buying these properties, however, can be tricky. If you’re interested in buying abandoned houses, consider these steps.
Determine the ownership
Every property has an owner. Figuring out who that owner is, however, can be tricky. Fortunately, most counties today have online searchable records, which means finding the name of a property owner can be much easier than it used to be. Use the address of the property to look up the legal owner, who should have at least their name listed.
Simply because there is a name listed doesn’t mean that person will be aware they are the legal owner of a property. In many cases, properties are abandoned because the owner is unable to care for them. This could be because the owner is sick, the owner has died, or the owner has financial issues that prevent him or her from taking control of the property.
Sick Property Owners
Property owners that are physically unable to care for the property are often the easiest cases to deal with. If they cannot take care of a home, they might be grateful to have someone else take what they see as a problem off of their hands. Be aware, however, that this is not always the case. Plenty of investors have encountered property owners who could not care for their property, yet refused to sell under the notion that they would be able to take care of it in the future, or that their children or other relatives would want the property some day. In these cases, it can be helpful to remind the property owner of what they could do with the cash from a sale.
Deceased Property Owners
Theoretically, a deceased person’s property should pass on to their heirs. If a person’s estate is still going through probate, the property cannot be sold. This is usually the case if the state is trying to determine who the heirs are, the location of the heirs, and/or there is a dispute over who should inherit the property.
In all of these cases, it will be next to impossible to purchase the property until the property has left the probate process. At that point, it could be purchased from the heirs. While the wait can be long, most states have a time limit of no longer than six months for a property to be in probate.
Financial Issues
This is a very common scenario, and unfortunately it can also be one of the most difficult to deal with. Properties could be abandoned because the owner cannot afford repairs, local authorities are requiring repairs or improvements that the owner cannot afford, or the property could be stuck in a legal dispute. To purchase a property like this, start by contacting the current owner and researching any liens or other judgments made against the property.
Throughout the process, remember to think of the costs of a prolonged legal fight, and compute whether or not the property still makes financial sense. In some cases, these properties can be great investments, particularly if the owner is willing to sell it quickly just to end the legal or financial problems he or she has with the property. In other cases, court battles over a property can drag on for years, making it nearly impossible to turn a profit. Be careful not to let someone else’s problem property become your problem.
