You will see this sometimes: a bright orange-colored notice stuck on the front door of a rundown home. It’s usually a notice of condemnation issued by the local county/city. It means that the county will demolish the home and sell off the vacant lot at auction. The government has the right to do this under a provision of the law called ‘Eminent Domain.’ Using this provision, the government can buy a distressed property that is causing a nuisance to the community. These are typically ‘blighted’ – deemed to be unfit and unsafe for human habitation. In a nutshell, the procedure is that the county will give you a choice: either you fix up the property, or the county will buy it from you (at a deep discount) and then raze it to the ground.
I recently saw one of these demolitions take place in my neighborhood on Little Road. It was a quaint little house that had been abandoned for a while.
If you are thinking, “Naah. That won’t happen to my vacant property.” You’d be surprised how often it happens. The county issues new condemnation notices every few days. I have met surprised property owners who are based out of state who didn’t even know their property’s condition. Once they receive the notice, they scramble to stave off the condemnation proceeding. It ends up costing a lot of money, time, and emotional aggravation.
Here are three ways to deal with a property that is either condemned or on the road to condemnation.
Sell It to a House Flipper
This is the easiest way to get out of a potential landmine. House flippers are adept at fixing up properties quickly. Many of them even have connections with the county and can secure time extensions while the property is being fixed up. A good flipper will be able to turn the property around within a few months. Though this option is the most obvious one, it is not always possible to opt for this. What if a mortgage on the property needs to be paid off and the house flipper is offering less than the mortgage balance? Fortunately, there is a solution to every problem. Here are two articles I’ve written that offer potential solutions.
Rehab the Property Through a Contractor (or DIY!)
If you have the money to invest towards rehabbing the property, consider doing it. You might be able to add significant value through the upgrades and sell it for a profit. Remember, the county doesn’t hate you (even though it certainly feels like it). All the county wants is that property should be safe for human habitation. If you are willing to work with the county, they will be willing to work with you. I have seen county officials give additional time to property owners who need it. Sometimes the officials may even waive off several fees that they have levied previously! It all depends on how you deal with them.
If you are the handy kind, you can even do it yourself with some help from your friends. This can save you a great deal of money if you have the skills and the time. However, I would caution you: don’t attempt it if you don’t have any experience dealing with projects that need extensive work. It is always better to hire professionals who know what they are doing.
Partner Up with An Investor
This is a creative option that most people don’t think about. If you don’t have the money to invest in the rehab, consider partnering with an investor who can put in the money for you. At the end of the rehab, you can sell the property and split the profits. This would give you more money in your pocket than selling it outright but less than if you did everything yourself.
Are you confused about which option is right for you? Each deal is unique. It would be best to connect with a specialist to review which of these options is a good fit for you based on a combination of your financial situation + your property.
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