Distressed properties and abandoned houses can be a tremendous real estate investment that yields sizable returns. In fact, these properties tend to be highly undervalued relative to their actual intrinsic value and their abundance makes finding a profitable one fairly easy. Boarded up houses, in particular, are as common as well-kept properties in certain neighborhoods. But what exactly is a boarded up house? How to find the owner of a boarded up house? And is investing in a boarded up house a wise move? This blog will provide you with answers to all these questions and show you how to buy a boarded up house in a few easy steps.
What Does Boarding Up a House Mean?
Boarding up a house refers to the process of installing boards on the entrance and windows of a property in a way that prevents wind and other outside elements from entering inside. This is usually done in order to protect a vacant or abandoned property from squatters and looters. In some cases, boarding up a house can also be used to protect an occupied home from storm damage.
Now that you know what a boarded up house is, let’s go over the advantages that these alternative real estate investments can offer to a real estate investor.
The Advantages of Investing in a Boarded Up House
There are many pros to buying a boarded up house. Below is a brief overview of the main pros that you can expect from this real estate investment.
1- It is the easiest way to land a below market value investment property
Whether you are dealing with a bank or a private property owner, there is a good chance of landing a good real estate deal on a boarded up house. As you would expect, these properties are often a surplus or a liability to whoever owns them. As a result, they are more willing to offload the property as quickly as possible and less likely to hold out for a high price.
2- You can generate a high return on investment
Buying a boarded up house is the most effective way to make a quick profit. As long as you manage your expenses carefully, implementing a fix and flip strategy will allow you to generate a high return on investment. Moreover, you can also profit from the increase in property value by investing in areas with high appreciation potential. And if you wish to implement a buy and hold real estate strategy, fixing the investment property up and renting it out can also bring you a good return if the property is in a good neighborhood.
3- You will face less competition
The low price of a boarded up house is not only a function of the owner’s willingness to offload the property in a quick manner. In fact, a major factor is the relative dearth of buyers. This is due to two reasons. The first is that regular buyers are less likely to take the risk of buying a property that might require a lot of costly repairs. The second lies in the fact that obtaining conventional financing for distressed properties is not as straightforward as financing traditional investments. Consequently, the demand is mainly driven by cash buyers and a small number of experienced real estate investors who are looking for a high ROI.
Let’s now delve into how to find out who owns a property that is boarded up and outline the steps you need to take in order to purchase one.
How to Buy a Boarded Up House in a Few Simple Steps
Profitable real estate investing requires having a complete understanding of the housing market that you’re planning to enter. In the case of boarded up houses, you will typically encounter two types of properties: bank owned homes and properties that are owned by a private owner. Here is how you can invest in either option.
1- Identify the owner of the property
The first step of buying a boarded up house is figuring out who owns it. If a bank or some other business entity owns the home, then this process should be easy. However, you will have to do more digging if you are dealing with a private owner. In fact, finding property owner information often requires sifting through hundreds of public records. Fortunately, there is a more convenient alternative: Mashboard. This tool allows you to find out who owns off market properties in a matter of minutes. By simply imputing basic information such as the property type, address (optional), zip code, and city, the Mashboard will provide you with all the relevant ownership data including emails and phone numbers.
Start out your 14-day free trial with Mashvisor now.
2- Conduct an investment property analysis
Your next step should be to analyze a boarded up house for investment. This is critical for determining the income property‘s ability to turn a profit. There are several ways to carry out an investment property analysis, but the simplest option is adding the property to Mashvisor and using the investment property calculator. This tool runs a complete ROI and expense analysis in a few seconds. Moreover, it gives you access to sales and rental comps among many other valuable metrics. Other extra features of the tool include neighborhood analysis and optimal strategy recommendation.
Related: What Are the Most Important Metrics in Real Estate Investment Property Analysis?
3- Contact the owner
After assessing the investment property’s potential, the next step is to contact the owner. If it is owned by a bank or a business entity, reach out to them and inquire about how you can submit an offer for the house. If it is a private owner, use the ownership data that you have gathered from Mashboard and contact them directly to see if they’d be interested in selling the property.
4- Get a professional appraisal
Once the owner expresses an interest in selling the property, you should promptly hire an appraiser to determine the value of the boarded up house. This will allow you to make an offer that is in line with what the investment property is worth. In addition to this, conduct an inspection to ensure the property’s structural integrity is not compromised.
Related: Can a Home Appraisal Calculator Replace a Professional Home Appraisal?
5- Make an offer
The final step is making an offer on the boarded up house. The appraisal and inspection should give you a clear idea of what type of offer to make. Still, be ready for intense negotiations as the seller will try to get the highest price possible regardless of the condition of the house. Working with a real estate agent will help make this real estate deal much smoother.
As for foreclosures and bank owned boarded up house, the process differs depending on the situation. Generally, real estate investors acquire these properties through an auction. But in some cases, the bank will try to offload the house through a broker. Reach out to the bank’s assets department to check if such a deal is available.
Related: Find Out How Much to Offer on Bank Owned Property
The Bottom Line
If you’ve ever driven past a boarded up house and saw a window of opportunity that you weren’t sure how to seize, now you know the steps you need to take. As long as you stick to the guide above, investing in a boarded up house should go smoothly.
To start analyzing the best investment properties in your city and neighborhood of choice, click here.