Stigmatized Property...Help

Hello everyone,

A relative passed away last year and left a stigmatized property to myself and 2 other siblings. One of the siblings is living in the home temporarly and paying rent to the other 2 siblings, as this will end next month. It’s an older ranch home (built in the 70’s) and has had no upfits or renovation. The previous owner was a heavy smoker as this is evident throughout the home. The neighborhood where the house is located is not good and carries with it a high crime rate and drug related activities among the surrounding homes.

The tax value is around $69,000, however, as you might imagine it’s considered a stigmatized property and reduces the value considerably. An investment company saw the house and offered a flat $25,000 as-is, which I think they will sell to another investor, probably flip the property and sell for a profit.

The other 2 siblings want out of the ownership and are willing to take whatever is offered. Me, on the other hand, have considered buying the other siblings out using the $25,000 purchase price, putting a new roof on the house and painting the interior/exterior in hopes of selling it and making a little more profit. I’ll need to make a decision fairly soon.

I really don’t know the best way to handle this situation and I welcome any suggestions or input that you may have to offer.

Thanks in advance for your advice :).

Please give us your definition of a “stigmatized property”…


Perhaps, I should say the neighborhood is stigmatized. The owner died in the home of natural causes, not due to murder or suicide.

A year or so ago a gang fight happened in front of the house that killed approximately 5 teenagers. Last year I witnessed a car across the street whereby 4 people got out of a car, opened the trunk and pulled out 2 AK-47s and entered that house. There’s drug activities (crack) usage among a good percentage of the adjoining neighbors.


Me? I’d take the $25,000 and run with with. Others may be braver than I.

I buy these props. and although many friend/assoc. think I have brass ones (not shiny atleast) I am usually greeted well by the neighbors. However I have run into people in some of the homes (mostly homeless) but I would be careful with how you approach these types of homes. I have a checklist I use generally. Let me know and I can give you some ideas as to what I do if you do end up buying.
Get a vest and let us know…


Thanks so much for your advice and consideration in sharing your checklist, ideas and suggestions :). As you’ve probably gathered, I’m have no clue as to where to begin this endeavor, or not. This website has been very beneficial to me and thought this would be the best place to share my concern with this type home.

Thanks in advance for time, it’s very much appreciated :).

u could either take the quick money or, rehab it, hold onto it for cashflow (i’m assuming u own it free and clear), refi to pay off your relatives and collect cashflow.

Assuming you each have 1/3 ownership, you should offer your siblings $16,666.67, not buy them out for $25,000 (because this would be split 3 ways). Then, since you are on this site and they presumably are not, you want to start making money in RE. You can either then sell it to another investor or rehab it. Obviously, if you flip it to another investor for $25,000, you are breaking even so why bother - just take the first $25k offer. However, if you flip it for anything more than $25k, its your profit. Win-win situation you ask me.

I work with inner city properties all the time. Not that big of a deal.

[light-hearted rant] By the way, it is totally legal to pull 2 AK-47s out of your trunk and enter a house… for most people. Just like most people are legal to drive, and but a small minority are not, most people can legally own AK-47s depending on the person and locale. A firearm is the only consumer product protected under our constitution.[/light-hearted rant]
8) 8) 8)

Back to your regularly scheduled forum discussion… If this is a good deal, you should be able to find an investor to flip it to with just a little legwork.

Good luck.


I can’t thank you enough for taking time to respond to my topic ;D. Yes, the payout to the siblings is as you’ve said, and my cash flow would allow me to do this.

I’ve given much thought to the situation (“It’s driving me crazy”!) and have realized a couple things. First, the property is located in another state, about 2 hours from where I currently live so I don’t see this to be a major problem yet. The property value has dropped as my previous email explains. One option for me would be to invest enough cash to bring the property to a minimum standard then rent it out using a property management company. The home and others around it are not in the best of shape. I think there are a few Section 8 tenants as well. Considering expenses versus monthly cash flow there’s profit to be made. From here, I’d like to continue renting it for about 2-5 years. I’m not too worried about tenants putting holes in the walls if you know what I mean?

On the other hand, using the same line of thought with bringing the house to a minimum standard, I could do this and then sale it but I don’t think I would make too much profit on the home right now. The market appears to be taking a downward spin where real estate is concerned.

With the rental idea in mind, I figure I could take advantage of cheaper renovation rates with builders and contractors as they’ve slowed down considerably. Right now, the home conforms with other neighborhood homes, so major renovations would not be a factor right now.

I’ve researched and found there’s a plan currently in place to clean up the neighborhood within the next 2 years. Perhaps holding on to it right now and collecting rents would be the way to go?

I value your opinion as I’m sure there’s other factors out there I haven’t considered. Please share your thoughts when you get a moment :).

Thanks again ;D

Section 8 is great, if you find good, deserving tenants. The federal government pays on time (for the most part) and if you find the right tenant, they often will take care of your property better than a regular tenant because they are too afraid to lose their Sec 8 voucher.

Low-to-moderate income properties are some of the best cash flow deals out there. I know a couple of people that get $200+ PCF per door, per month consistently. That’s pretty good cash flow and pretty good cash-on-cash return if you have very little into the property.

Good luck with it whatever you decide.