Sinkhole Homes

[Gulfman]

Being LL's/investors in an area of Florida prone to sinkhole attacks, we've always stayed away from having any interest in sinkhole properties, whether they were repaired to suit the engineering report(s) or not.

In other words, that was a nice way to say I'm a complete dummy/idiot with my head in the sand (sinkhole) regarding those type properties. My other half keeps pestering me to look into purchasing sinkhole impacted homes due to the extremely low apparent price(s). I'm about ready to give up and investigate the possibilities. :SM124: Or, just give up entirely on the thought of pouring money in a "hole".

My concerns relate to overall insurability, rental insurance availability and lender skepticism related to these type properties. Obviously, future appreciation expectations and saleability are an important factor also.

Do any of you have any experience you'd be willing to share regarding sinkhole properties and/or the obstacles facing a dummy?

Thanks........Gulf

[Dan Auito]

Gulfman, I didn't realize you where in Hudson? I was south of you in Clearwater, now I'll be north of you in Inverness. I too had thought about just this thing but lower Pinellas isn't so prone so never had the opportunity.

I need to get John Schaube and Ernest Tew to pipe up on this, also the University professors just love to discuss this type of thing. How to remedy that lack of limestone below?

Gulfman, I think lenders being the lenders they are would run for the hills unless maybe you only financed 50% of fair market value even at that, who would insure it? an appraiser would certainly note it but also put his disclaimer on his appraisal that said he is not a soil engineer and isn't qualified to judge subsoils.

Back to square 1, as always Gulfman you rarely ask the infamous stupid question (if ever!)

Well if you could get these properties for a song and just rent them out to eternity never intending to sell them who knows it could be one heck of a niche! Just count on positive cashflow while forgoing replacement coverage homeowners insurance, only some kind of liability rider, I think I remember an insurance co offering sink hole protection (extra) but that was on houses that haven't already sunk!

O.K. folks who has further insights here, not that I had any in the first place. :SM062: :SM006: :SM032:

[Aldo]

If I had any clue what Dan was talking about, I'd probably agree with him. He's probably forgotten more about Florida than I'll ever know (except that Leesburg is really cool place).
Here's a thought. Have you ever considered house-swapping? I'd like to winter in FL and I'm sure you'd have no problem with WI summers. While you may have to worry about sinkholes year-round, our biggest related problem is pot holes in the streets during snowbird season.

Think about it. If I was wintering in FL, I'd be a snowbird. If you were wintering in WI, you'd be a Happy Bird.

[Gulfman]

Yep Dan, I would think lenders would shy away also. We're going to chat with our banker and insurance agent in the near future on the subject, just inquiring if any others on the board have any experiences on the subject prior to doing do.

I've looked at a few sinkhole properties whereas the soil disturbance had not affected the structure "Yet". Absolutely gorgeous homes selling for peanuts due to the sinkhole issue. Of course, if it remains a peanut, it'll always be a peanut.

We'll see, hopefully some of your contacts will chime in. Thanks.

[Dan Auito]

Pay the peanuts fill in the holes around them and rent'em up for serious cashflow, will them to your nieces and nephews in 2050! :thumbsup:

[CharleyB]

Gulfman;
I work in structural engineering for a living and have some knowledge of geology.
When the limestone begins to degrade it very likely will continue. If the house has begun to sink the chance of it continuing is very, very high. With the ever increasing population in Florida and hence the increasing demands on the aquafer I suspect that this problem will worsen.
I recently read an article by an environmentalist in Colorado in which he lumped all the "zones" [flood zones, earthquake zones, mud slide zones, wildfire zones, etc.] into one catagory: STUPID ZONES.
If you know the problem exists, stay away.
Just my two cents worth.
All the Best,
CharleyB

[realestate]

If I had any clue what Dan was talking about, I'd probably agree with him. He's probably forgotten more about Florida than I'll ever know (except that Leesburg is really cool place).
Here's a thought. Have you ever considered house-swapping? I'd like to winter in FL and I'm sure you'd have no problem with WI summers. While you may have to worry about sinkholes year-round, our biggest related problem is pot holes in the streets during snowbird season.

Think about it. If I was wintering in FL, I'd be a snowbird. If you were wintering in WI, you'd be a Happy Bird.

I'm with Aldo, whats a sink hole?

[Just Information]

I have spoken with a few investor friends of mine and they invest in properties with sink issues and have had great success.

I for one would not suggest this as your potential for loss is great - I few articles that you may find of interest are at:

http://www.sptimes.com/News/072001/news_pf/TampaBay/Sinkholes_thwart_home.shtml

http://community.lawyers.com/messageboards/message.asp?channelId=21&subId=&mId=597289&mbId=31

http://www.designconnection.com/links/realestate.asp

[Gulfman]

Thanks JohnMichael for the links and comment.

I agree wholeheartedly, the potential for loss is great and I'll be sure to eliminate those peanut thoughts from my peanut sized brain.

Some investors may risk a few dollars in the sinking sand but this kid likes the firmer ground.

Thanks again...Gulf

Dan, if you read this, thanks for the email reminder....BTW, I had my shirt off today while working outside. It's so so tough to work in Florida. :sun:

[Dan Auito]

aaahhhrrrgggg, don't you go rubbing it in Gulfster. I'll be back there tossing sand in no time. If its 90 degress and 90% humidity I'm in my mecca. It'll take a month just to thaw out from this Alaskan adventure!

Now that I'm old and retired at 42 I'll probably do more business of finding good deals, managing projects and helping others here than I will be slinging paint brushes and drywall.

I don't want to have to cut grass either but then I do have these two kids and two horses for that! :tongue:

One thing I do like doing is breaking out the chainsaw and cutting back old growth around properties that have been neglected, it really changes the whole appearence of an over grown home in the matter of less than a days worth of hard labor, Good therapy too! (You know, a manly mans power tool and all) :smiley3:

Gulfman, one last thought on those sinkhole homes, what have you found out about the owners of these homes? Maybe you could acquire them "subject to the existing financing" and rent'em up. If the place eventually caved in then you could just give them back!
This isn't the best solution to the owners but I think you would probably pay that cheap price off long before you ever had to give it back due to some cave in. If it did cave in at least you would have an out while in the meantime paying the current owners while it still commands rent.
Just a thought maybe it will trigger something else or just convince you further that your wife is absolutely crazy as if you didn't already know that! After all she did marry you didn't she. :rolleyes:

[Aldo]

Hey, realestate, I isn't as dumb as ya tinks I is. Them sinkholes is where da water goes down then da tenants try to heat dere places by leavin' da hot water runnin'. I knows cuz I ketched 'em one time.

Geez, did I really say that?

[nplsdvr]

Hey CharleyB!

In reference to the "Stupid Zones", Dave Barry wrote an article about Florida, hurricanes and flood zones. Flood zones are designated on your driver's license. Not many residence know it. If you look on your license and it says "Florida" you're in a flood zone.

:SM007:

[CharleyB]

I certainly get your point.
Hopefully your NOT in a STUPID ZONE.
CharleyB