Abandoned Houses in War Zones: Golden Goose or Fool's Gold?
Hey guys, Sean Flanagan here.
I recently heard an interesting question about doing abandoned house deals in ‘war zone’ neighborhoods…
“I have enjoyed your training very much. I have spent six hours and found two abandoned houses in the Columbus, Ohio, area. To get more to look at, I will need to go into areas where I hear shootings and, just in general, not safe areas. I went to Springfield, Ohio, recently and found 51 abandoned homes in one hour. So much to look at, so little time. I have just started on this exciting journey.” —Grover J., OH
Well first off, three cheers for Grover! Man, I love to hear from people like you who’re moving solidly forward and making progress with abandoned house profits in your own area.
Now to Grover’s question…I do have a couple of specific thoughts I’ll share based on how I run my own real estate biz.
Your Money or Your Life
Let me be clear: I typically stay out of war zones personally, and pretty consistently shy away from areas with visible gangs, shootings, or just things I see that make me feel nervous or yucky. The best abandoned house deal in the world isn’t worth being mugged, harmed or maybe even losing my life.
Besides this, working with abandoned houses in those areas can be pretty tough in other ways too.
You often can’t find good contractors, buyers or profit margins for your fix-and-flips, and they can even be hard to wholesale for more than a nickel.
So, pretty much common-sense here:
Avoid going in areas where you feel uncomfortable or personally at-risk.
I know some investors who seem to thrive working deals in war zones where I don’t like to go. If an abandoned house lead happens to come my way, I won’t hesitate to try and wholesale that bad boy.
So yeah, if you already know solid people with a track record in war zones, then it may be worth considering. Also, you could always unearth specific, recent cash transactions in that ‘hood (but from afar via the MLS, not by putting yourself at risk) and see if those buyers might be interested in another. That’s always a handy trick for one-off deals.
Trying to find a cash buyer for one-offs in the ‘hood is one thing, but farming an area for abandoned houses like I teach is quite another, and something I don’t do in war zones.
Yep, another small exception. 🙂
It just so happens I’m a little familiar with Springfield. I’ve actually taken my kid to wrestling events there, and as far as I could tell, it’s a pretty decent area.
BUT!—If Grover’s eyeing a sketchy area, and he really wants to farm it for abandoned houses like I’m known for doing, he could just hire someone locally (like from Craigslist) to be a ‘bird dog’ property scout.
This can be an easy way to get someone else who’s comfortable with that area as your surrogate ‘boots on the ground’. Just make sure in your ad that you mention (i) the war zone area and (ii) what you’re willing to pay for their services.
And a very critical, final piece I want to emphasize with this type of deal…
Exit This Way
I can’t stress this enough:
Know your exit strategy for every deal before you get into it—especially in war zones.
My #1 Rule: Only put houses under contract that you have an exit strategy for. And this is especially key if you go the route of having a property scout help you.
The last thing you want is to waste your time or money paying someone to mine abandoned houses in shady areas for you, only to find later that it’s too dang hard to move houses in those sketchy areas.
So, if you’re aiming to farm a war zone for abandoned houses to wholesale, then always either:
- ‘Shake the tree’ in advance for local cash buyers already buying in that area.
- Mine another area where you already know cash buyers.
Identify your exit in advance, just like every stewardess on every airplane tries to help you do. And it just makes sense, doesn’t it?
Abandoned Houses Can Be Gold
Grover said he scored 51 abandoned houses in Springfield in just 1 hour. Solid results, Grover—keep doing what you’re doing, man!
I often see newer investors who are struggling to connect the dots doing deals. And this business certainly has highs and lows as you’re getting started.
If that’s you, just know every wildly successful real estate investor had a learning curve too. We all fail forward at first. Just keep trying—keep moving forward. Put one foot in front of the other. Keep at it, and good things will start happening. You can do it.
“A river cuts through rock, not because of its power, but because of its persistence.”—Jim Watkins
Anyone else have a war zone experience? Or maybe you even disagree with me? I’d love to hear a quick comment from you below.
Hoping your abandoned profits adventures are awesome,
(NOTE: Want a killer source of deeply discounted houses? Learn the insider secrets to profiting huge with abandoned houses Sean discovered through years of trial & error.)