Neighbors felt ‘terrorized’ by hoarder
Taylor, who has lived nearby for years, notes that many homes in the neighborhood have recently sold for around $1 million, making this property’s $599,999 asking price relatively low.
And that’s what makes distressed property purchases so intriguing. Distressed real estate refers to property that can be purchased at a big discount because there’s something “wrong” with it. It could be the sellers facing a dire situation, such as a foreclosure, or a judge allowing a court-appointed receiver to put the house on the market, as is the case with this home on Mariner Drive.
This hoarder home has sparked strong interest from potential homebuyers, but most of the interest seems to be coming from investors. And while the house itself could be a good financial opportunity, the property’s history remains complicated.
Former owner, Lisa Golden, was arrested for trespassing just a day before the open house and was reportedly spotted later that day driving past the home. Shortly after that, Golden was seen filming people from the sidewalk across the street from the open house.
"I believe she's kind of mentally attached to that place," Taylor explained, acknowledging that even with new ownership, the home’s challenges might continue. "She's terrorized me to the point I had to get a restraining order."
Despite these challenges, the realtor remains optimistic. "We’re hopeful it will go into escrow pretty quickly," she said, though she did not confirm whether any formal offers had been made.
There’s no doubt that a house listed at a sizable discount compared to other neighboring properties is going to attract plenty of interest, but there are some considerable risks involved with buying a distressed property.
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Learn MoreWhat to know before buying distressed properties
For potential buyers, purchasing a distressed property like the one on Mariner Drive requires careful consideration of the pros and cons.
The pros
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Lower purchase price: The obvious advantage to buying a distressed property is that the purchase price is often significantly lower than that of regular properties in decent shape. With this house on Mariner Drive, the place is in such bad condition that the property has been listed at around $400,000 less than homes that were recently sold in the neighborhood.
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Less competition: For distressed properties, there’s often much less competition than there would be for regular real estate opportunities. Distressed properties are considered riskier purchases, and that often eliminates several potential buyers from serious consideration.
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Value-add potential: Distressed properties often require extensive renovations, repairs or even potential redevelopment. This work can increase the property’s value, giving the buyer or investor the opportunity to make a profit from capital appreciation or even rental income.
The cons
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Uncertain condition of the property: This is the big risk that buyers take on when they purchase distressed properties. These houses sold “as is” are often in very rough shape and it's not uncommon for buyers to discover hidden damages after finalizing the sale. Buyers purchasing distressed properties often budget for renovations, but hidden damages can lead to costly repairs that will eat into your budget or your profits.
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Legal/financial complications: Buyers who purchase distressed properties can sometimes face legal complications, such as liens on the house, outstanding taxes or title issues. These unfortunate situations can add both cost and time to the buying process and could even prevent some buyers from completing the purchase.
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Market volatility: The market for distressed properties is often more susceptible to economic conditions than standard real estate markets, which makes these kinds of homes a riskier purchase.
As you can see, there’s a lot to consider when buying a distressed property. While the lower purchase price and potential for value adds can be substantial, the tricky part is figuring out whether the pros will outweigh the risks involved with such a purchase.
Distressed homes can often be purchased at a discount, but buyers should make sure to factor in renovation costs, potential delays and other hidden expenses when figuring out whether the investment makes sense for them.
Investors who are planning to flip the house or lease it out to renters may be willing to take on more risk than buyers who plan to renovate and move in. But either way, buyers should hire a professional to conduct a detailed inspection in order to understand the full scope of the work required.
Buyers should also be aware of any ongoing legal battles related to the property. In this case, Golden’s history of legal disputes could add to the complexity of the purchase. Buyers considering this house on Mariner Drive would be wise to consult a lawyer to make sure there are no legal issues that could pop up after the sale is finalized.
While the Ocean View Hills hoarder home may be a great opportunity for the right buyer, it’s important to carefully evaluate the financial risks involved with such a purchase. With proper due diligence and a clear plan, buying a distressed property can turn into a rewarding project, but it's not without its risks.
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