We recently received a call from a seller who had two properties they wanted to show us. The seller was very honest on the phone that the houses were in bad shape. In fact, one of the houses was already condemned by the city.
However, at We Buy NKY Houses, we say that we will buy houses AS IS, because that’s what we do! So, we met with the seller’s property manager to walk through the properties. Unfortunately, what we saw when we showed did not warrant us to make an offer on the site. In reviewing the location and other houses that had sold and were for sale in the area, the numbers just wouldn’t add up.
When Donating A House May Make Sense
To make the necessary changes to the houses for a tenant or home buyer, the construction costs were going to be pretty high. But on top of the rehab costs, there were mandates from the city where different items needed to be repaired, such as concrete steps and sidewalks. Again, when we added it all up, there was just no way our business could make a profit in buying these homes.
Profit? Yes, profit.
While we buy houses from people with cash to help solve a problem, our business also needs to be able to make a profit. We are not a charity. We are a for profit business. So, the numbers need to make sense in order for us to buy your home and then either rehab it ourselves or potentially sell it to another real estate investor who will do the house flip.
Needless to say, the seller was saddened to hear that we would not make an offer on the house as we would be upside down the moment we bought them, no matter what the price. However, we offered a suggestion, “perhaps you should donate the houses to the city,” we mentioned.
The seller thought this was an interesting idea. They knew that other real estate investors would probably have the same reaction as us, and they certainly couldn’t market the homes retail. So, they explored what it would look like to donate a house to the city.
What are the big advantages of donating the house to a city? Here are three:
I. No More Property Taxes
Once the property is off your hands, you are no longer responsible for costly property taxes. Immediately, you are saving money by not having to pay these any longer.
II. Write Off The Donation On Income Taxes
Not only are you not paying property taxes any longer, but you can also write off the donation on your taxes. This will save you even more money come tax season depending on your income bracket.
III. Peace of Mind
Old, worn down houses can be like a constant drip on your peace of mind. You always know the problem is sitting there, and it’s getting worse every day. Donating a house allows you to free up that mind space and no longer have to deal with it.
If you need some more instructions on how to proceed, here’s a great article on what to do when donating a house.
Helping Any Way We Can
A week or two after speaking to the seller about donating the house, we heard good news that they had moved forward with the plan and the city was working with them. They were very grateful to be moving the houses and experiencing the above mentioned benefits.
At We Buy NKY Houses, integrity is a BIG deal to us. If we are able to buy your house for cash in a way that all parties are happy, great. If not, we are going to be completely honest with you. We will NEVER try to pressure you or push you into doing something you are not comfortable with. We are in the business of helping people and solving problems. If that means we can’t buy your house, we still want to give you help any way we can. That may mean referring you to a real estate agent because we believe you can sell your house for more money. Or, in this case, it may be recommending that you donate your house to the city.
