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Unique Housing Opportunities
The housing market can be good and bad for all types of different people. Some people look for deals via bankruptcy and other avenues. Another option for finding a property to purchase and or invest in are building code violations. Another term for it is housing court. Depending on where you live it may not be called housing court. You have to do a little research but they are out there in every city/state.
In courtrooms across the country judges enter orders that find property owners for failing to maintain their properties. Some judges even enter orders requiring the property to be demolished, with the substantial cost of the demolition charged to the property owner.
I am not saying go out and ask every property owner if they are up to code, but often properties being demolished are salvageable and valuable.
If you are a savvy real estate investor that does his/her research you would also understand that those same properties are still subject to court fines and orders of demolition, but they can still provide tremendous opportunities for you.
When properties fail to meet the code regulations, the owners are notified of the violations and possibly fined. And if the problems persist or become worse, the properties may have to be demolished. There are a significant number of properties that end up in Housing Court because of death or financial distress of the owner. These properties may become vacant, poorly maintained, or just a nuisance to the property owner.
I cannot stress this enough. Information equals opportunity. Housing Courts represent a tremendous opportunity because they make distressed properties and their owner's information readily available to real estate investors.
Again, depending on where you are located it may not be called Housing Court. But in most jurisdictions there are special courtrooms and times set up to hear code-violations cases. Like with foreclosures, spending time in Housing Court could help you determine a property's case status. By attending Housing Court you can also gain valuable information about the owner. Check with the court clerk for a list of court cases that are to be heard that day.
If you have the court schedule ahead of time, it might provide a real estate investor the opportunity to view the property and prepare an offer prior to the court date. Depending on the jurisdiction you might also be able to obtain the court file which should contain the property owners name and phone number, and possible list of violations charged against the property. This list will give you some ideas of what repairs need to be done to the property. It will give you time to consider all your options on the table. If the violations are easy to fix, then you might decide to proceed, but if they are not you can move to the next property.
An owner whose property is subject to increasing fines and possible demolition is sometimes willing to sign over the deed to the property. The owner avoids being responsible for the cost of the fines that are being assessed
This sounds like a great idea to do right? Of course it is! But be smart, with any real estate purchase, make sure that you are capable of taking on all of the needed repairs and still be able to make a profit before agreeing to purchase the property. Taxes will be due, possible association fees, and other restrictions may come up.
If you are able to make an agreement with the owner, you may still need to prove to the judge that you have the resources to bring the property back into compliance.
Be smart, do your homework. Research any property that you like thoroughly. Always have the property inspected from top to bottom. And if you do it right, you might be able to walk away with a nice property at below cost or little cost to you.