Crazy Issues That Can Really Throw Off Your Cheap House Deals
Low priced homes aren’t always cheap deals. Watch out for these factors that can turn cheap houses into really expensive investor nightmares.
Trees
This California couple just got hit with a $600k fine for moving an oak tree on their property. In other cases storms have knocked down trees, that the city has hauled away before hitting owners with fines for not obtaining permission to remove them. In order to sell owners have had to get permits for removed trees, and plans and permits and plant new trees before they can sell or refinance. It’s not the kind of quirk you want to find out on the day of your scheduled closing.
Mandatory Renovations
From Sicily, Italy to Ohio, you can find homes for sale from as little as $2 to under $20,000 from the government. While there may be good deals to be found in cheap properties like this, many come with the requirement of investing over $10,000 in rehab within a very tight timeline. Or you lose it all. Make sure you know the details and can follow through before getting in.
Moving Costs
There are even free homes out there. The catch is that many need to be moved and can cost more to move than they are worth. That’s certainly the case with this inherited home in Minnesota. There are also many mobile homes out there for sale for under $20,000, but which may cost just as much to move and setup and renovate on a new lot.
Illegal Use & Code Violations
New investors are often fooled into buying properties that have major code violation issues. Often they slip through the cracks until after you close on them. This can be failing to have permits to block up a window or door, illegally separating rooms for Airbnb rentals, and garage conversions, as well as landscaping violations. In Estero, Florida, some homeowners are now being fined more than their properties are worth for simply failing to cut their grass. Those are six figure fines. If you have to go get permits and do construction to change a property, it could easily set you back over $10,000. A lot of these properties end up in foreclosure.
Holding Too Long
From freak blizzards to hurricanes, to rezoning, squatters, vandalism and changing market dynamics, there are many issues that can hurt investors to hold onto properties for too long.
On the bright side, investors who do their due diligence upfront can typically spot most of these issues and use them as great negotiation tools to bring down their costs. Using Best Transaction Funding, they can then be flipped instantly for great profits, without the risk of holding.
