I recently received a comment/question sent to my email by a future customer who had read one of my blog posts on active rain. I wanted to post it here so others could get some insight into issues that need to be addressed when buying properties especially in urban areas. I asked the client to watch the posting for information that may be helpful to her.
Carla writes,
"Hello Mr. Stevens,
I saw your comments on Activerain.com. Here's a scenario for you, I would like to purchase this home at **** St. Detroit, MI 48224 - it has extensive fire damage. This is okay, as I would like to be able to renovate the home (upgraded wiring, plumbing....) the problem is I live on the west coast. I do plan to occupy the property once it is rehab'd.
The problem I have with most RE agents, they don't really want to give the information I need to make an informed decision, so I have repeatedly walked away from buying. I never get the answers to the following questions, 1) total cost to purchase property, such as special assessments through code violations if any, back taxes, what the actual taxes are, closing costs, title ins.... 2) where exactly the property is located, example, Indian Village...., 3) if the home is tagged for demolition, 4) if I purchase home that needs extensive repairs, since I am out of state, do I have to start rehabilitation of home as soon as title is transferred to me - or can I wait to start rehab, is there a time limit before code violations/citations are issued to me as new owner.
My question to you, is how much would it cost to insure this home during and after rehab? ***I would like to be present when rehab is being done.
Any and all help you could give is appreciated.
Thanks,
Carla"
My response,
"You have some great questions and it it good to see someone
approaching real estate in Detroit with some foresight and maturity.
Most investors see the sale price and they do not think about the
additional costs and hidden costs that come with a home needing rehab.
Is it OK if I re-post your question on active rain so others can be
made aware of potential problems when purchasing any real estate?
Finally, the answer to your question. How much are you buying the home
for and how much will you be spending on rehab? It sounds like a
contractor is doing the work, or are you doing the work?
Thanks for the email and I hope to hear from you soon.
Don Stevens"
I felt any feedback we could get could create a record of some great dialog and also help potential buyers become aware of the little things that need to be addressed when buying properties needing rehab.
