REO properties encroaching on lot

So I found two REO properties (1415 xxx st and 1419 xxx st), both of which are prime candidates for a rehab. I made an offer on one of them, but today the realtor came back and informed me that there is a third lot (1417) that has been adjudicated in between the two that BOTH have built additions on. If I bought 1415 I would have to knock down the addition. Long story short I now want to buy the adjudicated property from the city and BOTH rehabs. I don’t mind buying both as I expect to make around 100k on the whole deal in only a few months, but I need some advice on ways that I could avoid having to tear down either addition when I make the purchases. I have a meeting with a local real estate attorney, but would like to learn a little more about it before meeting with him.

Thanks as always.

Can you get the city to re-plat the three lots into just two lots thus removing the encroachment?

I’m curious, what did the RE attorney have to say on this? :huh


If you can purchase the lot in between, all you have to do is a lot line adjustment.

Not so easy: If you can’t buy the lot, and the additions on both houses have been there a very long time, you might be able to do an adverse possession.

Me; I’d do the deal only if I could buy the lot and one or both houses. I would go and look for something else to buy if I couldn’t purchase the lot. But that is because I never want to buy myself a lawsuit when there are other properties available to buy.

Go to the courthouse and talk to the people there to determine who their “favorite” surveyor is. That is, the one they like. Go to the surveyor and ask about the procedure to subdivide the lot. Ask the surveyor about how to get approval. He’ll know the right people. There will be a cost but not really huge. Then buy the house and lot subject to planning and zoning approval. Then push thru subdivision of the lot. Then tie 1-1/2 lots to one house and the same to the other. The law suit goes away. You don’t venture any money if you can’t execute your plan. Minimal risk. Great potential profit. It’s do-able.

One question I would ask the building permit people. How in heck did the builder get a building permit for the house or the additions?

My lawyer recommended that instead of trying to buy the property from the city (who would take their time and probably charge me the amount of the taxes owed), I should contact the owners of the property directly and deal with them. Most likely they have been receiving letters from the city for years now about back taxes and would probably like to get rid of the hassle. The problem is that I don’t know who they are.

Should I run a skip tace or is there another way to go about this? I have their tax ID number, but the property is still in the name of the deceased owner (according to tax records).


what state is it located?

I’m in Louisiana. I actually just spoke with a private eye who says he can find the new owner and contact info for about 90 dollars. This seems reasonable, but what do I know…Is it?

PI’s do have access to personal data sites that the ‘average Joe’ does not. If it’s a deal you really want to go after, then $90 is pretty reasonable IMO.

As Matt says, if it’s a property that works for you, the $90 is just part of the cost of doing business…


The more I think about it, the more I’m convinced that there is something you don’t know about that property. HAS THE PROPERTY ALREADY BEEN SUBDIVIDED? That would have been the only way the builder or remodeler could have gotten a building permit to build those additions. You have to go down to the permit office to find out how they did it. I was a builder. The builder in a subdivision does not just ignore permits or building inspectors.
To find out more about the houses and the owner of the empty lot, use the directory, the address cross directory, and call the neighbors to find out if they can help you find out what’s going on. You only need one “chatty” neighbor to learn things that nobody knows about… like where is the owner of the empty lot.

$90 seems like a small amount compared to what it might cost in marketing to find 2 more deals that could net you $100k.

Taxes have not been paid on this lot since 1993. It appears that the structure was demolished in 1997 (still unpaid on the tax bill) and then the additions were built in 2005.
The lot is simply not very large or desirable for a builder which explains why there was no house built on the lot during this time.

At no time was the permit process adhered to while building the addition, but this being New Orleans my lawyer expects subdividing the property with the existing additions to be fairly easy to do. If it turns out to not work I am purchasing the lots subject to it, so that’s no biggie.

Right now my lawyers PI is finding the possible heirs to to someone who died 7 years ago who inherited the property from 15 years deceased owner who is still on the tax bill. Assuming I find the owner’s, my lawyer will take care of having them donate the property to me (since it’s worth much much less than 15k and if I buy it through the city it will show up on their credit reports) and I will subsequently pay off the 15k in back taxes to the city while purchasing both properties it is encroaching on. It this doesn’t work I’ll just buy it from the city, but this would take longer)

It will cost me 17k (15k taxes, 2k lawyers) to get this property tracked down and purchased and closed on. Right now the houses are on the market for 42k each, but nobody can purchase either of them without knocking down the additions! Except me…

What should I offer here? I feel like I have aces since :

A. The end of the year is approaching
B. These houses can’t sell unless someone does what I am doing(nobody is) or knocks down the addition (changing 5br 2ba and 5br 2.5ba into a 3br 1ba and 3br 1ba. +new walls)

I’m thinking to offer 50k for both with a letter reminding them of the encroachments. Is this legal? Also do you think this is a legitimate thing to do?