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Questions and Answers / Buying property in a known bad neighbourhood

« on: June 08, 2013, 05:29:49 AM »

Hi everyone,

As my name states I am new to tax sale properties and looking to make my first purchase. Currently I have my eye on a property that is located in a neighbourhood that is generally classified as bad. It does have a couple good things as well. I am however concerned about a few things, some of which just may be unnecessary exagerations of my over active imagination. I have listed below things that concern me. I hope the seasoned investors can give their input.

• current owner/tenant causing enough damage before they leave that the repairs cost more than what I would be able to sell it for once its repaired
• tenants/current owner refusal to leave
• possible high retrofit costs that again would cost more than what I could sell it for
• • current owner/tenant get mad over the tax sale of the property and return to cause us harm or damage the property while under renovations
  • • theft and damage during renovations since no1 will likely be living there
    I also want to ask about taxes I pay when I sell this property. I would like to buy and sell more properties but I am just getting my toes wet and learning the ropes. I read in another forum about 50% cap gain I have to pay. I am not sure what that means and pretty much confused about about the taxes. Should I be incorporated or just buy normally. I don't know if I will be buying another property this year. It all depends on the property cost and availability and if I make money off of this 1.
    
    That's all I can think of at this moment. Appreciate your help.