Im a newbie investor who came across this deal that the property was condemned by the state of Washington. The owner of the property is an out of state investor who rented the property to tenants that used it as a meth lab. They got busted and the state condemned the property. Because the owner is out of state, the state couldnt reposess the property. Im finding that similar properties in the neighborhood have recently sold for $260k - $290. I can purchase the property for $205k. So far I havent seen the inside of the property. It looks as if there is no structural damage. Im not sure but Ive heard that I need to do a hazardous material clean up and get some sort of certificate to lift that condemned status. Is that accurate? does anyone know how much that might cost? Any suggestions as to what steps I should take to assure that I can make a nice profit from this deal? Any and all advice will be greatly appreciated.
You would have to contact Hazmat. They could tell you the cost of the clean up. It usually consist of new carpet,sealed walls ect… Anything that could absorb the cemical must be removed. I know that is what they do in apartment buildings so I believe it would be the same. Hope this helps.
Walk…NO! RUN away. These are often environmental nightmares. Disclosure will always be necessary in the future. If you put tenants in or sell to a buy and they start getting sick, you’ve opened yourself up to problems that can be inconceivable!
And, BTW - 70 - 78% on a CONDEMNED property is NO GREAT DEAL to begin with!
KHasted is right: Even if you ripped the inside down to framing and replaced EVERYTHING, you’d still have to disclose the fact that it was used as a meth lab to the new buyers. With the 260k neighborhood, you would be lucky to find a buyer at 120k retail.
The only way you could make a deal out of this is to buy it for the value of the land only & completely demolish & rebuild the house.
That property is about as safe as a Superfund Site. Run away as fast as you can. Meth Labs are no joke, the chemicals are in everything and everything has to be properly removed and disposed. Even if you tore the house down and rebuild, the land itself could be contaminated. If they had a septic, that’s contaminated as well. They might have dumped the waste in a hole in the back yard and it leached in into the neighbor’s property! This could turn into an easy 200K clean up and that’s not even including the house to be built. Best advice here is to run away from this.
I am new to this business also, I’m finishing my first property in the next couple weeks. I am in St Louis which is probably legally different from Washington state but we have had several news stories lately about the “potential health risks” of moving into former meth labs. Judging by past issues like radon and mold, I would expect quick lawmaking to make selling former labs very difficult and expensive. For what it’s worth, I’d stay away unless you stand to make an absolute fortune or can turn it VERY quickly.
Even if you quick-turn it, you could be held liable as a previous owner. I’m taking a RE Agency course right now, and it discusses liability problems with contaminated properties.
The most important issue with these is the concept of joint and several liability. This means that the current owner, prior owners, and anyone else connected to the contamination are all responsible for 100% of the costs, both jointly, and individually.