When NOT to Make an Offer

When NOT to Make an Offer

A Horrible Example

The picture in the listing sheet showed an unkempt lawn, but the front of the house looked quite normal except for a corner of the roof that appeared to have been sawed off. It had 3 bedrooms and 1 bath, with a double attached garage and a basement. The asking price was $84,900. The buildings in the immediate vicinity, mostly houses, looked only so-so, not a good sign.

We met the agent at the property, who extracted the key from the lock box. It had a nice new screen door. When the front door opened, we discovered that the faint high-pitched squeal we had noticed from the front porch was an intrusion alarm in the living room that had been alarming for an unknown period of time.

There was no furniture, except for a semi-installed unit of shelves that somehow opened into the bedroom through a hole in the wall behind one of the shelves. The house was built in the 20's, and the walls showed the original lath and plaster because the lower parts were deteriorating and other parts had been cut into for various reasons and left open. Some walls were thin paneling and home-made shelves had been mounted in most rooms. But the living room flooring was nice-looking hardwood, and a fireplace insert was in the fireplace, with a forced air furnace behind it in an enclosure off the hall.

The kitchen floor sloped down towards the alley, as did a sort-of-enclosed back porch. The cabinets had a commercial look to them, like they were never intended to be in a kitchen. Home-made scrolling decorated the tops of the wall cabinets. A staircase led to the basement, the light in which was an extension cord through the floor of the bedroom above and didn't work. The basement was unfinished and rough, but that wasn't important because only a midget could have gone down the stairs. It completely lacked headroom, having waistroom at best, requiring one to creep down or up facing upwards on hands and knees.

The bath looked decent, but a closer look showed several large chunks of porcelain knocked off the non-original tub, and the modern basin showed broken "marble" by the drain. There were 4 light switches and bright lights, as if to grow plants...

The electric wiring was a complete disaster. The electricity to the "laundry area" on the back porch consisted of an extension cord poked through the wall. Most visible fixtures and wires had been modified, and there is no way to tell what circuits went where.

The windows appeared to be newer, but they had been installed backwards, flange on the outside but the glass farther outside. Two of the double panes were cracked or broken. The current owner was FNMA, but there is no way the house could have passed any inspection for the loan, which was fairly recent.

The garage was below the level of the house, since the lot sloped, and the two doors were hung on a rail and rolled on wheels. The back yard fence lay on the ground. And the listing photo was accurate: somebody had sawed off a corner of the roof.

Before we entered the house, the agent said it would be a good buy at $75,000, but initially we were thinking more like $60,000. Then, every room we entered drove our price down until it became "unsuitable at any price," to misquote Ralph Nader. This was even more apparent as the noise level from the surrounding parcels became more noticeable. The entire house would need to be redone and when completed would not be worth the cost due to the poor neighborhood and the inability to attract a decent tenant.

This is about the most abused house I have ever seen, much less one on the market priced as if it was ready to move into. But at least it didn't damage the quality of the neighborhood.




Wow, it sounds like this was a big messed up property. Another investor may have a different perspective on it and may see the property as a great opportunity.


"If you cannot do great things, do small things in a great way.”
Napoleon Hill quote


What is the value of the property? What about the value of the land?

This would make a huge difference on how the property is handled. If this is a 20 cents on the dollar property...I like it.


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I can relate cactusbob!

I viewed a property in almost identical condition, had great woodwork (an old colonial)but much of the house was TRASHED! The bank is asking $69,000 for it and the only thing worth saving aside from the woodwork was a GREAT stained-glass window in the dining room! I ran out of the place like my butt was on fire! Laughing out loud



Life's a Dance you learn as you go...GET HAPPY FEET!

"Most of the important things in the world have been accomplished by people who have kept on trying when there seemed no hope at all." ~Dale Carnegie


Thanks for that visual!!!!!!!LOL Been there, done it, and probably ran out quicker than you. Just another part of the REI process Bob. There is plenty more to look at......Jan

Land Value under Horrible Example

nstreet's comment about the land value is a valid consideration. This area is fully developed and there are few vacant lots that have been on the market. I'd estimate that the lot may be worth about $15,000, if the building were removed. Then you would have a nice vacant lot in one of the worst neighborhoods in the general area.

As it is, the total property value is not likely to exceed $5,000, for the reasons described. The new asking price is reduced to $72,500.