What could possibly go wrong?
It’s a truism that you can make great money doing what others don’t want to do. No one wanted to buy the ex-drug den that was up for sale, so I bought it.
I had been looking for a rental property to buy for months, yet nothing worthwhile was available. The property market was red hot and buyers were paying way more than what I considered to be fair value.
I had been relying on the internet to find some good deals. As that wasn’t working, I decided to go out and look for myself. The disadvantage I had was that I was looking for property in a town 200 miles away from where I lived.
Why look for property so far away? It’s a place I lived in for many years and knew well. That meant I was less likely to make a mistake when buying.
I see so many new landlords that buy rental properties in places they don’t know come unstuck. What looks like a great deal on paper can be the most awful deal in reality.
That meant I needed to go visit the town every weekend until I found a property worth buying. As I had a 9-5 job, I had to pick up a rental car after work on Friday, drive 200 miles, stay in a hotel, and spend the weekend checking out properties. Then drive home again.
It sounds like I was working 7 days a week, but it was fun. I love looking at properties for sale, even when I’m not planning to buy. You never know when or where you’ll spot a great deal.
I made a few appointments in advance and made the real estate agents aware of what I was looking for. It meant I got to see a few properties before they were listed, which is often a great way to find deals.
I did this for around 4 weekends until there wasn’t much left to see. I was almost at the point of giving up but pushed on.
I came across a very small estate agent outside the city center. I’d never heard of it despite months of research. This shows the benefit of getting out there yourself and looking.
Anyway, back to the estate agent. They only had around 20-30 properties on display. Every one of them had a sold sticker, except one. I mentioned earlier that the property market was red hot at the time. It’s not the best time to buy but you can still find deals if you put in the work.
The one property still for sale didn’t look in great shape, although that can be a good sign. It wasn’t the type of property I wanted and wasn’t in my preferred area either. I was looking for a house but this was a 2-bed apartment. The estate agent said it was a steal at the asking price. He persuaded me to go see it.
When we got there I was surprised to see needles still left in the living room. The place was a mess. The owner lived in another part of the country and just wanted to get rid of it ASAP. He wasn’t interested in cleaning it and making it presentable. This is another great sign for a buyer. A desperate seller will always take a lower price.
What struck me though was that the apartment was in pretty good condition, apart from the mess. That could easily be cleaned up. I spoke with a neighbor and he told me all about the previous tenants and the drug problems. He seemed like a nice guy. He also mentioned that his neighbors were looking forward to getting some decent tenants living there.
I concluded that the neighborhood was pretty decent and that the drug problems were a one-off. The out-of-town owner probably had no idea what the area was like, so must have assumed he’d bought in a really bad area.
I put in a low offer and the owner accepted right away. He probably rejoiced that he finally found someone insane enough to buy this former drug den.
A few weeks later the place was mine. I got a local builder to clear out the trash, paint the place, put in new carpets, and fix some damage to the kitchen.
He sent me before and after photos. You’d think they were different properties. It’s amazing what a lick of paint and new carpets can do to transform a place.
I rented the place out for a year and then sold it.
It sold for more than double what I paid, including the builder work.
If you see an ex-drug den for sale it might be the bargain you’ve been looking for. Do your due diligence though. It could also turn out to be your worst nightmare.