The house next door was abandonded!!

The house next door to mine was recently abandoned by the person living there. After catching the owner outside Sunday while working in the yard, she told me that it was her sister living there. Her sister just up and left moving to another part of the state, but not before leaving the house in complete disarray.

The owner was a very nice lady offering to walk through the house with me and boy was it disgusting! The roof is falling apart, the yard is trashed, there are rotten window sills, rotten support beams on the back patio, rotten cabinets and sub-floor in the kitchen were the sink was left to leak for years, rotten food all over the bedroom walls (a food fight that was never cleaned up I guess??) and everything and I mean everything is original in the house (built 1971). So without an inspection I am thinking I should do a new roof, central air, new carpet, new windows, lots of cleaning, hardwood refinishing, paint throughout, landscaping, a new kitchen including appliances and some structural repairs to the back patio.

I told her that I was hoping she was planning to clean up the property because it is a huge eyesore for the street, especially right next to my house! She told me that she is not in a position to do anything with it since she doesn’t have the time or resources and is actually in the middle of a new purchase with her husband. She said that she would like to just sell it as is to get rid of the burden. So I asked her to give me a few days, and I would present her with an offer, and she agreed. We did not discuss any pricing then because this is my first time doing anything like this and I wanted to research a lot before I got any numbers floating around in her head. So that brings us to now… a few days after reading a LOT of articles on this site (thanks!)…

The tax assessment for 2007 was $177k. I have no cash to bring to the table for this deal and I am actually in the middle of a refinance of my second mortgage at the moment (should close in 2 weeks). I am looking at HML’s and at 70% of the ARV (my estimate: $124k), minus the repairs (my estimate: $30k), it seems like without having any money to bring to the table I would not be able to offer her anymore than $94k.

Am I missing something? Because I have a feeling she will laugh in my face when I offer that low of an amount.

HML might be your best chance. Bid low and walk if she refuses. DO NOT FORCE A DEAL. The HML will not allow you to pay more than what you should. So if you bid too high then the deal WILL NOT go through. So this is easy, you bid low and hope she accepts.

If $177,000 is the ARV, then the max bid would not be $94,000.

177,000 X .65 (70% is difficult) = $115,050

  • 30,000(repairs)
  • 6,900 (closing costs 6%)
    = $78,150

Max bid $78k. This bid is allowing for zero mistakes. It doesn’t even include carrying costs or rehab surprises. A safe bid would even be lower.

Tax assessments are rarely accurate, get a good local realtor to give you comps that will help you more accurately pinpoint ARV.

Rich is right. Tax assessments are usually low, which is a good thing when it comes to paying taxes. I would find an appraiser that you can partner up with. Create a relationship so that you can use him/her to get accurate data and maybe discounted appraisals.

Great advice, thanks guys!

I was pretty much thinking the same thing, that either she takes the deal or she doesn’t. I am not in a position to do this other than having it 100% financed, so I would not feel comfortable going after it if I didn’t think that the HML could cover it all.

About the tax assessment, I should have said I was using it because it was so much lower than the comps (I live next door in the same style/size house). Comps in the area have sold within the past 3 months for just under $200k. Using the tax assessment allowed for a little bit of buffer for me while I played with the numbers :stuck_out_tongue:

By the way, the house has 2.5 baths, 3 bedrooms, office & finished basement. If I do get an accepted offer for around $80k, should I rent or sell? What is a good way to determine when renting is feasible?

UPDATE: I got a call back from my real estate agent and he has agreed to meet me at the house in the morning to do a walk through and help out a bit with the negotiation since this is my first time. The owner agreed to meet us with a key to let us in. So I will sit down with the agent afterwards and draft an offer. Wish me luck!

I’m just curious how the real estate agent is going to get paid.

Are you going to pay him a flat fee for representing you or is he going to make you sign a buyer’s agency agreement? It’s probably worth it to use the agent if he’s experienced and it sounds like you’re going to need help on this one. See what kind of a rolodex he has on people like roofers, contractors etc.

The agent will get the 6% when the house sells. That is his driving purpose for helping me out… that and he is a long time friend of the family :stuck_out_tongue: I hope he can recommend some contractors too, because otherwise I will be cold calling from the phone book to get some of the work done, and that makes me a little nervous. (A lot of the work though, I have done on my own house and would use the same reputable contractors I used personally).

The meeting is in an hour, so I will let you guys know how it goes. Thanks again for the support.

6% will result in the seller getting even LESS then what was earlier stated. If the seller didn’t have a Realtor then it was a mistake on your end to bring one to the table.

You can use your friend to sell the place, but tell him you’re NOT using him to buy it.

Well I just finished meeting the owner’s husband and my agent at the house. We walked through and made notes of repairs that would be necessary before the house could be resold. Here are a few of the things we saw (keep in mind this is not a professional home inspection, so there very well could be unseen things to add to this list)

  • All the paint is stained and dirty.
  • Water damage found in the kitchen, living room, master bedroom windows, utility room cieling (falling in), and in the floors of both upstairs bathrooms.
  • The carpet is completely trashed and needs to be removed.
  • The back patio is sagging and does not feel safe to walk on.
  • The back patio’s support beams are rotten at the base and the concrete they sit on is crumbling away.
  • The basement/garage area has a lot of mold.
  • The hot water heater needs to be replaced (rusting out at the bottom)
  • Cracks were visible in the foundation.
  • There are multiple broken windows, including the large picture window in the living room.
  • The roof is coming off in places and needs to be replaced.
  • The gutters are coming away from the house, rusting, and are severely malformed in places.
  • Then there is the trash removal and landscaping that would be required before the house could sell too.

So after we walked through and took notes we talked to the owner’s husband in the front yard about a possible offer. My Realtor asked, pretty bluntly, what they owed on the property and the he replied, $169.5K! Supposedly the owner’s mother had some medical problems before passing away and the owner took ALL of the equity from the house to pay for it. The husband said that they were just hoping to break even, but there is no way that they can sell that house without loosing a significant amount of money.

The house was previously owned jointly with the current owner, her sister and her mother. The mother died a while back and the sister that was the one who trashed the house over the past seven years and was paid off when she left town. I understood that they paid her off so that the older sister and her husband could handle selling the property without having to include the other sister in any of it.

I also ran a report on the property address from and it resulted in 32 civil judgment records against an elderly man, from the mid nineties, all of which were medical bills left unpaid. I do not know if these were charged off in a bankruptcy or if the man has passed away or what without doing a full title search. The total amount of all the judgments listed on this report came to $48,133, so that doesn’t leave me with a good feeling.

So, there is no chance that my offer of $75K is going to be accepted, but I am drafting it anyways. I plan to include a list of all the problems that I saw as well as estimated cost for repairs on each. I will explain in the offer letter the many factors that go into making the offer so low including financing costs, repair costs, real estate transaction fees, and my profit margin.

I don’t think this is the right property for me to get started with. I will keep my eye on it though and still put in this offer for $75K, besides, it is right next door. Who knows, she may have a trust fund from her mother passing that could cover her negative equity (almost $100K). Either way, I feel her pain, because she is in a very bad position with that property if she really owes $170K like she says.

Thanks for all of the help guys, I will keep looking!


The 6% would only have come in at the sale of the property. Anything he did to help out with the offer and buying it was for free as a friend. We had already discussed that. Good advice though, thanks!

Good idea. It will be good practice.

Well I was thinking that I could find a simple offer letter for my state via google or searching these forums but I am not finding anything. Even when I search through my local government sites, I still do not see any? I am searching for “offer letter” or a variation therein. I am putting off bothering my Realtor friend until I exhaust all search options which is where I am almost at now. I must be missing something.

Can anyone offer any advice on a better way to find either an example offer letter for my state or a form?


Try your local real estate board. Mine sells forms to the public for $1 per form so you should be able to get an offer form from them.

To make the offer, you typically need the offer form, the contingency form, the lead paint form, the pre-approval from the bank and a copy of the earnest money check (no offer is valid without it).

You could probably get away with not having the lead paint form, federal law requires it, but if you go further, I’m sure the attorneys would make you sign them.

Even though you will probably not buy the house, you did EVERYTHING you needed to do if you were going to purchase it. That’s the best part, so many people say they are going to get into real estate without actually doing it, that’s what separates people who are successful and who are not.

They aren’t going to be able to sell that house for more than $150K, and if they do, it will be to some idiot who thinks they can flip it. Keep an eye on the house, you wouldn’t believe what some people would do to get out of debt, desperate sellers are the best people to buy properties from.

Good luck


Thanks for the compliments and the advice. I will definitely be keeping an eye on the property to see what she ends up doing with it.

Thanks again… and I have this thread bookmarked so I will update later to tell you guys what she ends up doing with it if anything.

Great story!..I’d love to find out what eventually happens to this house…

Like you said, keep an eye on it…Maybe it’ll turn up in foreclosures later?