Investing in real estate can often mean stepping into unpredictable situations. For Tommy Merhout and Daniel Moore, walking through a severely distressed property wasn’t just a tour, it was an opportunity to strategize. What may look like an unfixable mess to one person could be a solid chance for another to profit or even establish a home. Here’s what they uncovered during their inspection and the advice given to approach such a property.
The property in question? A house riddled with challenges: missing copper wiring, water damage, trash piles, and a collapsing addition. Yet, beneath the flaws, there was potential—if handled correctly.
The Initial Walkthrough
From the moment they entered the house, it was clear this wasn’t a typical property. Mold was evident, copper theft had occurred, and the electrical breakers were missing. The floor had soft spots in some areas, though Daniel noted the subfloor was relatively solid. Trash throughout the interior only added to the negative appearance.
Structural issues were obvious in the house’s addition. This part wasn’t original and showed signs of severe decay, including improper roof construction that caused leaks, rotting wood, and potential termite infestations. Even the backyard had its quirks, with overgrown brush and peculiar sounds reminiscent of an “exotic animal” hiding nearby, adding to the property’s neglected aura.
Still, Daniel’s takeaway was clear: while not ideal for traditional investors, this property had untapped potential for the right buyer.
Understanding the Market Context
In this neighborhood, retail home values hover from $100,000 to $120,000. Buyers often compromise on condition to secure a property in their preferred location. Nearby communities like Diamond Hill, Riverside, and North Side offer cheaper options, but they lack the appeal of this property’s location. This house offered an opportunity for potential buyers to establish roots in a better area at a similar price point.
Daniel emphasized that many owner-occupants in the area don’t rely on financing. Instead, they save cash over time to make outright purchases. This cultural mindset significantly affects how fixer-upper properties like this are perceived.
Why Traditional Investors May Pass
This isn’t a property that will attract your typical real estate investor or flipper. The combination of structural issues, trash piles, and a heavily damaged addition makes it unlikely to generate the kind of margins investors crave. Additionally, scraping the property to sell the land alone isn’t financially viable. Land comps in this area range from $14,000 to $15,000, far below the current purchase price of $27,000.
As Daniel pointed out, bulldozing the structure would only burn through additional funds and limit resale opportunities. But leaving it intact opened doors to owner-occupant cash buyers looking for something they could turn into their dream home.
Who’s the Right Buyer?
The ideal buyer for this property is a family who’s used to hard work. These buyers aren’t daunted by drywall replacement or roofing projects. Most likely, there will be construction workers or tradespeople within the family who can tackle repairs on weekends.
For this audience, it’s not about the cost of hiring contractors but about access to affordable building materials and their ability to do it themselves. Many of these buyers are drawn by the prospect of owning a home without the burden of loans. The opportunity to customize it over time makes the property’s flaws manageable, even motivating.
Cleanup and Initial Repairs
Before listing, some cleanup is essential to improve the house’s appeal. Daniel recommended the following:
- Trash Removal: Renting a dumpster for $600 and hiring a cleanup crew could clear out the piles for around $2,000.
- Brush Trimming: Cutting back overgrown trees and bushes would make the house more accessible.
- Minor Fixes on Siding: Replacing damaged wood siding and reframing areas could be completed for about $1,500 in materials.
These low-cost efforts would significantly enhance visibility and create a clearer vision for buyers. There’s no need to invest in full-scale renovations. The aim is to spend minimally while presenting a workable blank slate.
Addressing Key Problem Areas
The most significant issue lies in the collapsing addition. It was an unoriginal extension, and poor workmanship doomed it over time. The roof leaked, wood rotted, and the structure eventually gave way. Fixing this area would require tearing it down and rebuilding. Yet, the rest of the home showed fewer concerns, with much of the original structure offering a solid foundation to build on.
Mold, subfloor repairs, and potential termite problems need further inspection. These issues, while not minor, don’t necessarily overwhelm buyers who are prepared for sweat equity and willing to rebuild.
Pricing Strategy and Marketing
Given the house’s condition, Daniel advocated for pricing it at $40,000 as is. This figure would attract the right type of buyers: motivated families who see value in a fixer-upper. The idea is to keep it below the market comps for an immediate pull.
The property should also be marketed aggressively. Key strategies include:
- Listing on the MLS for maximum visibility.
- Bandit Signs placed strategically in English and Spanish, targeting local buyers.
- Craigslist and Facebook Ads to generate interest from a broader audience.
This combination creates wide exposure while tapping into communities seeking affordable ownership opportunities.
Why Demolition Isn’t the Answer
Bulldozing the house may seem like a straightforward solution, but it comes with significant drawbacks. The cost of demolition could reach $7,000-$8,000, putting the total investment well beyond what the property is worth as raw land.
Instead, the strategy focuses on presenting the house as a fixer-upper and letting potential buyers decide on demolition if they choose. This way, the seller avoids draining resources while still making the property attractive to those willing to rebuild.
A Different Approach to Selling Low-Income Properties
Daniel shared insights gained from his experience in low-income real estate markets. Conventional 70-cents-on-the-dollar formulas often don’t apply to properties like this. Instead, it requires creativity and understanding cultural and economic factors affecting buyer decisions.
Low-income purchasers—particularly those with “mattress money”—are willing to take on fixer-uppers as long as the price feels fair. They’ve worked hard to save cash and are ready to transform a space into a home on their own terms.
Key Takeaways
A trashed property doesn’t necessarily mean a lost cause. With the right cleanup, pricing, and marketing strategy, homes in poor condition can attract buyers looking for affordability and opportunity.
This house may not suit traditional investors, but it’s a perfect fit for cash buyer families who value ownership and are eager to renovate. The focus here isn’t on flipping—it’s about creating a viable starting point for buyers willing to put in the work. By cutting unnecessary expenses, tapping into cultural demand, and being patient with the sale, sellers can still profit from seemingly hopeless properties.
