Since the crash of 08 the mid west has been littered with abandoned “shell” properties.
What is a “shell” property??
It’s exactly like it sounds, a shell property is a home that has been stripped out of everything of value in the interior and all that is left is the floors, walls and roof of the home!
With a countless amount of these properties currently available for next to nothing can you or should you try to invest in these??
The answer depends on your exit strategy. Years ago this is all I invested in and I have invested in a few this last year as well. All have lead to profits for me! Here are examples of a few deals I have done. I’ll share how I purchased these homes, how I conducted my marketing and the exit strategy of each one.
This was a 3 bedroom 1 bathroom home located off St Clair on Cleveland’s east side. This deal was presented to me by a motivated seller that wanted it sold ASAP! She found my contact information off Craigslist.com where I was running “Cash for Houses” ads. She was motivated to sell because the city had stopped by the property and hit her with several violations due to its condition. This sent her into panic mode! She drove downtown,pulled all the necessary permits to begin the rehab of the property and panicked again as she did not have the money to rehab this home! She really wanted out and I could tell when she contacted me!
I drove to the property to take a look and I knew why she was so motivated. It was a dump! Her asking price was $4,000 so when I called her I asked her to try to sell to someone else as she would get a better offer then what I would pay her. She insisted I make her an offer so I told her $900.00 she quickly blurted back $1,000.00 and it’s yours!
I wrote the contract and gave her $1,000.00 for the property.
I now was the owner of this hot potato property that I needed to sell. Without wasting time I shot a walk through video, took several pictures of the property along with a written description and began to market to my network!
10 days later a friend sent me a cash buyer for $2500.00!
This was a tiny 2 bedroom 1 bathroom home on Revere ave owned by an out of state owner that let vandals get the better of him!
He purchased the home for $4500.00 and began to rehab the home to hold as a rental. Every night after his contractors left, vandals would break back in and undo all their hard work. He was done and wanted out. He contacted a friend of mine and was willing to sell the home to him for $1500.00. My buddy was bragging to me about the great deal that had just come across his plate so I took it upon myself to check it out.
Everything was good on the exterior! New roof, new windows nice front porch. The interior did need work but if it was properly secured it could be a home run! I contacted my friend that was in position to buy this home and asked him to sell me his contract for $500.00. He agreed, I took title and paid him the agreed upon $500.00 fee.
I boarded up the whole house and brought in the crews to rehab this home. A few weeks later it was finished. I hired a property management company to screen and place tenants and I now hold this cash flowing property in my portfolio to this day!
I am currently working on this deal. This is a shell property that has come across my plate a few times already but I was unable to successfully negotiate the price low enough.
My friend June contacted me about it, negotiated a purchase price of $1350.00 and the seller agreed!
Here is our strategy for this home:
1) Shoot a video walk through
2) Take countless photos
3) Write a detailed description
4) MARKET LIKE CRAZY UNTIL SOLD!!
This will be marketed for a fast cash sale targeting investors but we will also offer financing for this deal and hold the note on this property.
This listing will be marketed on:
When your deals are priced right and you market like crazy your deals will sell!
MARKETING IS KEY!
Abandoned shell homes may not be an investment for you but there are buyers everywhere that like projects!
Try networking with investors that like these properties and find out what they typically pay for them.
Next make ridiculous low ball offers on these properties until one sticks
Get a signed purchase agreement from your motivated seller and sell your contract to your “shell” investor and get paid!
People may argue this but when you take a dump property off a motivated seller and put it in the hands of an investor that will bring it back to life EVERYONE wins!
The seller eliminates a headache!
The investor gets a great deal!
You get paid!!
And the city gets a violation filled, tax delinquent eyesore off their radar
If you have invested in shell properties please share your experience with me!