There is a property in Waco I want to put under contract. It is red-tagged for demo. This action was initiated by the code enforcement office this past August. The owner lives out of town and has done nothing so far to stop this from happening.
The property was built in '56, is about 2000sq.ft.,incl. a 300sq.ft. covered fr. porch with a double detatched garage plus
almost 5.7 acres of land. The prop. sits just off of the loop where the road is being widened and the land value jumped $20,000 from '04 to '05. The total value of the prop. in '04 was $29,946 now it is $50,079. I have not yet contacted the owner. If the property is demolished by the city, won’t the owner be liable for the cost? I have thought about making an offer on the house alone & having it moved, but I have no where to put it yet, plus I’d really like to make a deal for the whole prop. incl. acreage. I am waiting to hear from the code compliance office about the details of what must be done to the property to bring it up to code. In order to stop the demo on this prop. I, or whoever becomes the new owner, will have to go before the Building Standards Comm. and request time to do the repairs required by the code office.
Has anyone here ever had any success in doing such a deal? If so, I need your help! I am pretty new at this, so be kind!
The widening of the highway is going to bring in lots of new construction, which is already happening on the other side. If the owner is willing to negotiate with me, this could be a good deal. I am going to do some comps in the area so I will know the full potential for anyone interested in this.
Thanks!
Gail
flippergirl,
Seems you have done alot of work already. I too tend to spend alot of time working numbers, how to sell the property, what repairs need to be made and in what order, etc.
BUT, the one thing you mentioned that you haven’t done is… CONTACT THE OWNER. 
We as new REIs spend too much time analyzing deals than actually getting the deal under contract. You may find that this owner is not at the address listed anymore, has died, or could care less about the property and would rather see it demo’d.
IF you can get ahold of the owner then by all means tell him you’ll give him $100 if he’ll just sign the property over to ya. SERIOUSLY! He obviously has no contact with the house or he would know of it’s condition so giving him some token amount like $1,000 coudl be a windfall to him. Heck even if the house in it’s current condition would appraise for 100k still offer him $1,000 just to test to see if he even knows the value of it. (my guess he doesn’t)
Hey, thanks for the speedy response!
The reason I haven’t contacted them yet is because I want to have all my ducks in a row first. I would like to hear from someone that may have already gone through a deal with a red-tagged house. I guess I want to make sure it is worth even attempting. There is a lot of “red” tape to go through with a deal like this. It is my understanding that there are no guarantees that the commission will grant a request to allow repairs to be done. For this reason, whoever I will assign the contract to will have to deal with this issue.
When I do contact the owner, I will definantly make the lowest offer I believe they will consider.
Thanks for your help!
Flippergirl 
Just a side note/laugh…
Don’t offer them a price YOU think they will consider. In this case you will want to offer them the price THEY will consider YOU crazy.
This form of investing should not be undertaken if you are new to the game of investing.
Most cities and counties require licensed and bonded contractors to do all the repairs.
You will also have to deal with county and or city engineers as well.
After the repairs are completed, you normally will have to apply for an occupancy permit.
Costs are normally great, but the profits can be as well.