# Buying a Remediated Grow-Op



## techsoul

Hello

My wife and I have found a house that is a remediated grow-op for a good deal in a nice neighbourhood. The place was busted in 2005 and has since had 2 different owners. The current owner is a police officer and his family have lived there for 5 years. Apparently the grow-op was busted shortly after it was setup but I don't yet have details on the level of damage that occurred during that period. I would estimate the house is priced $50k below comparables in that neighbourhood after just going through a $30k price drop. The house has been on the market for 2 months (which is an eternity in Calgary) and the seller has already purchased another property (they are very motivated to sell). We might be able to get this for below asking price.

The basement was stripped to the cement foundation - with all insulation removed. I didn't notice any mold smell and I'm fairly sensitive to these things. The upper floors were reno'd around 3 years ago and everything was done to a really high standard (not just lipstick). 

Obviously the former grow-op stigma is having an effect on the properties attractiveness in this fairly high-end neighbourhood. This house is likely at the very bottom of the range for this neighbourhood and appears to be in really good condition.

Questions:

Am I crazy for considering this?
Will the grow-op stigma fade over time? If I hold the house for 6 years it will be 15 years post-grow-op. Will people still be scared of it?
What should we watch out for when performing the home inspection? We still likely put conditions on air quality and mold testing...
It is possible to get details on the police report from when the grow-op was busted? I'd like to know how many plants were found and how long it was in operation before being busted.
Any other advice?


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## carverman

techsoul said:


> Hello
> 
> My wife and I have found a house that is a remediated grow-op for a good deal in a nice neighbourhood. The place was busted in 2005 and has since had 2 different owners. We might be able to get this for below asking price.
> 
> The basement was stripped to the cement foundation - with all insulation removed. I didn't notice any mold smell and I'm fairly sensitive to these things. The upper floors were reno'd around 3 years ago and everything was done to a really high standard (not just lipstick).
> 
> Obviously the former grow-op stigma is having an effect on the properties attractiveness in this fairly high-end neighbourhood. This house is likely at the very bottom of the range for this neighbourhood and appears to be in really good condition.
> 
> Questions:
> 
> Am I crazy for considering this?





Yes and No. The important thing is mold and what damage has been done to the attic (where they would run the ventilation pipes from the basement, the condition of the walls and attic.
You would need to hire a home inspector first and don't take any chances on this even if it seems like a bargain listed lower. To repair any serious damage (black mold and other environmental
issues( could easily run you up to $50k.



> [*]Will the grow-op stigma fade over time? If I hold the house for 6 years it will be 15 years post-grow-op. Will people still be scared of it?


Well that's a difficult question, the house would need environmental assessment probably before you put it up for sale, so the real estate agents can show the potential buyers, that
no harm can come to their family while living inside. If you don't disclose and the buyer finds out later, you could get sued.


> [*]What should we watch out for when performing the home inspection? We still likely put conditions on air quality and mold testing...


Mold, air quality testing for sure..house has to pass a clean air test. Attic needs to be checked out thorough for black mold on the roofing plywood and maybe the insulation as well.
Wiring inside has to be checked out by a qualified electrician, or have the seller produce an electrical safety certificate.


> [*]It is possible to get details on the police report from when the grow-op was busted? I'd like to know how many plants were found and how long it was in operation before being busted.
> [*]Any other advice?


*Be EXTREMELY CAREFUL BEFORE COMMITTING. * The other thing you need to find out before putting any offers on it and ordering any inspection prior to buying,
will the mortgage company give you a conventional mortgage for it.

Strictly my opinion here...I am neither a real estate agent nor do I play one on TV


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## Mortgage u/w

I am a full-time mortgage underwriter and also a certified part-time home inspector.

1- Mortgage insurers will not insure these types of properties unless a full reno and decontamination performed. They require before and after tests/results such as air quality, inspection and police reports. They consider these properties on a case-by-case basis but are more reluctant to financing them.
2- Best financing option is conventional mortgages (20% mininum down-payment) but still, you are limited to the number of lenders who will proceed. Point #1 criterias will still be required.
3- Once property is tagged grow-op - always tagged grow-op. Even if busted for 1 plant.
4- You'll need the real estate agent or current owners to provide you police reports and air quality test results (before and after renos). You'll need to know what the set-up was; venting through walls? roof? window? How many plants? did they lay plastic sheeting with earth or pots only? 
5- Get yourself a reliable home inspector who's done this before. One advantage I see is the basement is stripped so any damage is apparent. The attic is extremely important to inspect. Electrical - make sure the main line has not been tampered with. Hopefully all this has been dealt with since 2 homeowners have already lived in the property - but never hurts to be extra vigilant. 
6- air quality tests are a must.


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## hystat

all this stress to save $50K? nah, move on. $50K goes nowhere these days if a mold related issue or other serious problem is discovered.


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## marina628

With so many options out there why would you even want to risk the liability and potential health of your family.


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## carverman

marina628 said:


> With so many options out there why would you even want to risk the liability and potential health of your family.


Very true Marina. Not only would the buyer have issues finding a mortgage but maybe home fire insurance as well. I pity the landlord that rented that place out to a grow-up not suspecting, because they not only ruined his home ( home owner insurance doesn't cover any repairs if a crime has been committed on the premises, (read your homeowners policy for the exclusions), so the landlord would have to come good for the cleanup out of his own pocket. 

It's one thing to do a cleanup of sorts and rent it out, but another thing entirely when the house goes up for sale and future resales too.

I'm not sure if an owner has to disclose legally ..(maybe a real estate agent can answer that? ), but once it has been labelled a former growup home, 
getting any future buyers interested in it is going to be a tough road.


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## techsoul

marina628 said:


> With so many options out there why would you even want to risk the liability and potential health of your family.


That may sound easy, but try finding a good value long-term family home for under $500k in Calgary in a decent neighbourhood. You can't. Perhaps I should clarify and say - I can't. 

Thanks everyone for their feedback and advice - much appreciated!

Remember that this home was remediated 9 years ago. Lots of homes have had a history of flood or water damage - none of those homes carry the same stigma. I find this odd because a remediated grow-op and a remediated house with water damage carry similar risks. I'm pretty sure I've only lived in one home (out of 8) that didn't suffer water damage at some point in its history. At least this home comes with a history of remediation documentation, reports and air quality tests, something that a water damaged home wouldn't come with.

We've been searching for a home for over 6 months with nothing but lost bidding wars to show for it. Most of these home are showing up as rentals for insane prices (over $3000 / month) by speculators (grrr). The rental market also exposes my family to these same risks, but no one (health authority or governments) seems to care about tenants health. I find it disgusting that you can rent a former grow-op with no notification to the tenants. How many renters would request an air quality tests performed before renting a house? Likely no one.

I'm fascinated that people are so terrified of grow-ops. Part of my intention with this thread is to find out if anyone would be willing to buy this property in 10-15 years. From what I can gather, no one wants to touch these houses for fear of unknown risk. The phrase “Be fearful when others are greedy and greedy when others are fearful” comes to mind. Perhaps this is an opportunity for those of us who aren't as fearful. At what discount does the risk become worth it? If not at 10%, how about 15% or 20%?


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## techsoul

carverman said:


> Not only would the buyer have issues finding a mortgage but maybe home fire insurance as well.


Is that true for a remediated grow-op? I understand that would be the case if it was for sale as-is, but after remediation, I wouldn't suspect that I should have problems in these areas. Can anyone clarify? Mortgage U/W, I'm looking at you... 

Also, from my reading, a seller doesn't need to declare the property as a former grow-op once it has been remediated and inspected. The history is public information and a buyer can easily find this information themselves. However, if asked directly about its history, the seller must answer honestly - if they answer at all. It would be great if someone knowledgeable could confirm this for me.

Thanks again!


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## nobleea

techsoul said:


> Also, from my reading, a seller doesn't need to declare the property as a former grow-op once it has been remediated and inspected. The history is public information and a buyer can easily find this information themselves. However, if asked directly about its history, the seller must answer honestly - if they answer at all. It would be great if someone knowledgeable could confirm this for me.


I'm not sure. I know that if a homeowner knows of asbestos in a house, they have to disclose to future sellers. However, if they knew there was asbestos, but then had it removed, I don't think they would have to.


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## hystat

techsoul said:


> try finding a good value long-term family home for under $500k in Calgary in a decent neighbourhood. You can't. Perhaps I should clarify and say - I can't.


I don't get what that has to do with this topic. 
so remediatied grow ops are over $450K and non grow ops are over $500K. 
It's still 50K. Or was your number inaccurate? Maybe with bidding wars on non grow ops it's 75 or 100K to be saved? That's different than 50. 50 is the number where I say "simply not worth the hassle". 
In 10 years, 50K will be a shiny object you wish you had ignored.


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## MoreMiles

techsoul said:


> That may sound easy, but try finding a good value long-term family home for under $500k in Calgary in a decent neighbourhood. You can't. Perhaps I should clarify and say - I can't.


You are not throwing money away when you buy a house... You get it at a discount, you will have to sell it at a discount later on anyway. There is no free lunch. If there is, why would this current post-remediated seller needs to sell you at a discount, even after 9 years later?

You can get 30% less now when you buy. You will get 30% less when you sell... unless you lie and hide. Then you open yourself to lawsuit, including ill health side effects and damages to compensate for those ill effects. Lawyers love to help asbestos house buyers... They would love to help your buyer too if you lie.

So really, there is no free lunch.

Most people here will not go for it. It's like a survey. When you need to sell, you have to go with what "most people' think and not what you think. So if no one here is interested for your idea, why would you believe you will get an overwhelming number of buyers that will buy it from you later.

It's the same reason why Detroit houses can be bought for $10,000 or less... It's all about supply-and-demand. There is simply no "demand" for a grow-op house... so you will not have bidding wars or above-asking offers. You will get low ballers... exactly the same way you are thinking, trying to buy from you for even a cheaper discount. 

That is my opinion.


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## techsoul

jacofan said:


> How do you know the reno was "done to a really high standard"???
> 
> Sounds like to me that you are trying to talk yourself into buying it.


Your right, I have no justification for that statement. The reno's appear to be of a high standard, but I don't know for certain. Considering I lack alot of details on the history



jacofan said:


> If you can't afford to buy a home, you shouldn't. Rent instead.
> 
> Your emotions about being able to afford a home are clouding your judgement. It's hard to fight emotions isn't it?


That depends on your definition of afford. I can "afford" a home well above $500k if I'm willing to compromise on my desire to buy with 20% down and without risking my ambitious medium-long term investment goals. The bank has lots of nearly-free money available, if I'm willing to take on a higher debt load, but I don't want to be stuck holding a ridiculous mortgage when these rate normalize. 

The rent vs buy dilemma is rooted in the high cost of rent compared to the cheap cost of borrowing money. Renting a home of this quality is likely a $3000+ monthly expense. Even with financing, tax and regular maintenance considered, we can buy the home with significant monthly savings. 

And yes, its hard to fight emotions. Especially when I'm trying to plant some roots for my growing family. I'm tired of moving every 2-3 years. It is very stressful on my family when our lease is up each year and the landlord keeps saying, "I was planning to sell this year, but I'll let you sign a 1 year extension". We're hoping to be a bit more permanent when my children start school in a couple years. 

Housing emotions can be difficult to rationalize - hence me looking for an objective perspective on this site. I appreciate everyone's opinions and advice - thanks!


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## techsoul

MoreMiles said:


> You get it at a discount, you will have to sell it at a discount later on anyway. There is no free lunch. If there is, why would this current post-remediated seller needs to sell you at a discount, even after 9 years later?
> 
> You can get 30% less now when you buy. You will get 30% less when you sell... unless you lie and hide.


Absolutely, I recognize this fact, but a discount now gets me into a neighbourhood I otherwise won't be able to afford or justify. Given the state of the resale market in my target price range (low inventory + bidding war insanity) I will likely just keep renting until the housing market normalizes. *cross-fingers* for higher interest rates to bring sanity to the housing market as I continue to save and invest for the next 5+ years :apathy:


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## techsoul

hystat said:


> I don't get what that has to do with this topic.
> so remediatied grow ops are over $450K and non grow ops are over $500K.
> It's still 50K. Or was your number inaccurate? Maybe with bidding wars on non grow ops it's 75 or 100K to be saved? That's different than 50. 50 is the number where I say "simply not worth the hassle".
> In 10 years, 50K will be a shiny object you wish you had ignored.


Those were loose numbers and estimates. I need to do more research before I can get an accurate sense of the current discount in dollars or percentages. Point taken tho - the discount is not likely worth the effort unless I'm buying for land value.


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## techsoul

MoreMiles said:


> That is my opinion.


Thanks for your opinion. I sense a common theme in this thread 

I think we will likely pass on this house. We will watch it for a while and see what it eventually sells for... or maybe throw in a low ball offer for fun in a few weeks, hehe


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## carverman

jacofan said:


> I would run away from it as fast as I could. Unless you get it at 50% market value... I feel the same way about "rebuilt" cars. Not worth the risk.
> 
> 
> *This home will likely be a Holmes on Homes gut job in a few years. * The stigma with grow-op homes is huge. In BC, no one wants to touch a ex-growop home. It's only worth the land value and salvage returns IMO.
> 
> Run as fast away as you can and quit telling yourself that it's a good deal. 50% off comparables is a good deal. You could burn through $100k in no time if a tiny mold problem left over grows over a couple years to a huge problem....



I saw a "Holmes on Homes" segment on TV about a former growop home that he was called in to inspect and remedy Wiring was all messed up..had to call in one of his electricians to rebuild the electrical panel and run new wires, where the wires had been compromised. 
They had run these big 6 inch vent pipes through closets from the basement right up to the attic to the roof vents for moisture (black mold) venting, and the smell of course, which is very distinctive odor when these plants are growing. 
Holmes had to call in environmental people to spray the roof boards with some kind of mold destroyer and the insulation in the attic had to be removed and new insulation installed. In the basement the floor joists had to be decontaminated from black mold. Don't remember what other work was involved to restore the growop, but it was significant.


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## donald

I keyed in on 'police officer and his family' this should tell you at least something(this would tell me it might be OK,you don't know the history but he or she did & you can bet it likely checks out,why would a officer who has access to files/people in the department not have a concern buying it?with a young family?maybe because it was a short lived/small grow out that caused no damage and it just has the stigma perhaps?you think a officer wouldn't know the details before buying?)
I prob wouldn't buy it but maybe just maybe it is a diamond in the rough-just because it is listed 50k under market does not equal selling price,you might get it for 100k under market or lower


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## carverman

donald said:


> I keyed in on 'police officer and his family' this should tell you at least something(this would tell me it might be OK,you don't know the history but he or she did & you can bet it likely checks out,why would a officer who has access to files/people in the department not have a concern buying it?with a young family?maybe because it was a short lived/small grow out that caused no damage and it just has the stigma perhaps?you think a officer wouldn't know the details before buying?)


Just because he's a police officer, doesn't mean he knows about environment issues with mold etc inside a home. If it was a medical marijuana grower, that might be different, but I would expect
even then the smell of marijuana being consumed on a regular basis inside the home..leaves residue (just like tobacco smoke) and a smell that is very distinct. Carpets, if they haven't
been replaced already would more than likely have to be replaced. A low ball price is always attractive, but I would pass on it. I just don't like having health surprises after living in it for a few months or years. 

You may remember, Donald, the UFFI foam problems with health and the cost of removing this dangerous chemical insulation that was foamed in between the walls.
It did cause health problems and made the house(s) where it was installed practically UNSALEABLE or going for a very very low price as the owners either had to remove it complete (extremely
expensive if it was between brick and inside walls) or take whatever was offered for it.
UFFI (Urea Formaldyhe Foam Insulation) became a curse for the unlucky homeowners that paid thousands to get it installed and then TENS OF THOUSANDS to have it removed.
Every real estate for sale listing had to have the owner warrant that UFFI was either installed and removed or never installed. 

Non Disclosure at time of sale could lead to a big lawsuit as the effects of the out gassing on health was PERMANENT to a lot of people, sensitive to this gas it gave off.


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## Mortgage u/w

techsoul said:


> Is that true for a remediated grow-op? I understand that would be the case if it was for sale as-is, but after remediation, I wouldn't suspect that I should have problems in these areas. Can anyone clarify? Mortgage U/W, I'm looking at you...
> 
> Also, from my reading, a seller doesn't need to declare the property as a former grow-op once it has been remediated and inspected. The history is public information and a buyer can easily find this information themselves. However, if asked directly about its history, the seller must answer honestly - if they answer at all. It would be great if someone knowledgeable could confirm this for me.
> 
> Thanks again!


Once the declaration of 'former grow-op' is known, all lenders' and insurers' ears perk up. As I previously mentioned, it IS more difficult to get financing and insurance but not impossible. Lets take the lender I work for as an example, once we know its a former grow-op, we steer clear regardless if remedied or not. Other lenders do it with strict conditions - see my first post. And mortgage insurers also do it with strict conditions. 
To answer you're question about resale: as long as the grow-op is known, people get scared and move on. Someone like myself that understands and can determine the situation is remedied will not be afraid.....but the rest of the population will be afraid thus reducing interest in the property. 
I suppose that after so many years that pass by for which the property is well renovated, one can 'omit' to declare the former grow-op.....after a few resales, no one can determine its past unless the renos were poorly done and research is done. Lenders will never question it since it is not declared and financing will be a breeze. As a seller, you are obligated to declare.....but many get away with it especially when the grow-op was very minor.
The question is, who is the seller willing to 'omit' that declaration?


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## carverman

nobleea said:


> I'm not sure. I know that if a homeowner knows of asbestos in a house, they have to disclose to future sellers. However, if they knew there was asbestos, but then had it removed, I don't think they would have to.


Yes, I believe that is true, as long as the pros do it.


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## carverman

If the house has been a grow op for a period of time with a lot of plants and air evacuation systems, black mold could be present INSIDE the plasterboard where it can't be seen without pulling the plaster board off and examining the underside of the board.
A coat of paint over the walls from the outside does not stop the mold once it is established..it can still grow from the humidity in the house. If you breathe in the spores from the
air in the house..well read this...

Here are the effects of black mold on health...
http://moldgeek.com/black-mold-symptoms/


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## nobleea

techsoul said:


> That depends on your definition of afford. I can "afford" a home well above $500k if I'm willing to compromise on my desire to buy with 20% down and without risking my ambitious medium-long term investment goals. The bank has lots of nearly-free money available, if I'm willing to take on a higher debt load, but I don't want to be stuck holding a ridiculous mortgage when these rate normalize.
> 
> The rent vs buy dilemma is rooted in the high cost of rent compared to the cheap cost of borrowing money. Renting a home of this quality is likely a $3000+ monthly expense. Even with financing, tax and regular maintenance considered, we can buy the home with significant monthly savings.
> 
> And yes, its hard to fight emotions. Especially when I'm trying to plant some roots for my growing family. I'm tired of moving every 2-3 years. It is very stressful on my family when our lease is up each year and the landlord keeps saying, "I was planning to sell this year, but I'll let you sign a 1 year extension". We're hoping to be a bit more permanent when my children start school in a couple years.
> 
> Housing emotions can be difficult to rationalize - hence me looking for an objective perspective on this site. I appreciate everyone's opinions and advice - thanks!


You are looking to buy at the worst possible time. The market is always hot in spring. Look again in Nov/Dec and while prices may not drop that much, you won't have to deal with so many bidding wars, etc.

Points made about buying and selling at a discount are worthy. I have a car I bought as a rebuilt. Professionally done and it was written off due to cosmetic damage (doesn't take much when the insurance companies are involved). Bought for probably 25% cheaper. Will sell for 25% less as well, but because cars depreciate so much, that selling discount is insignificant. I've had no problems in the 100K that I've owned it.


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## MoreMiles

Mortgage u/w said:


> The question is, who is the seller willing to 'omit' that declaration?


The OP says that the seller is a cop. Why would he commit a fraud and jeopardize his career for you? You don't really think a cop will lie under oath (ie statutory declaration) for you, do you?


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## Mortgage u/w

MoreMiles said:


> The OP says that the seller is a cop. Why would he commit a fraud and jeopardize his career for you? You don't really think a cop will lie under oath (ie statutory declaration) for you, do you?


My statement is figuratively speaking and assuming future sellers of the property. Why would I be talking about the current seller if the declaration has been made already?? Regardless if he's a cop or Barak Obama?!


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## techsoul

Mortgage u/w said:


> My statement is figuratively speaking and assuming future sellers of the property. Why would I be talking about the current seller if the declaration has been made already?? Regardless if he's a cop or Barak Obama?!


To clarify, there is nothing in the listing denoting it as a former grow-op. I found that out by searching online and asking the selling Realtor.


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## Mortgage u/w

techsoul said:


> To clarify, there is nothing in the listing denoting it as a former grow-op. I found that out by searching online and asking the selling Realtor.


It may not be written on the listing....but the seller will be obligated to fill out a vendor's declaration if an offer is made and accepted. He will surely divulge the information on that form. 

If he doesn't and you go along with it, then its at your own risk. You accept the house as is. When you resell and you too do not declare it, its still a risky move because just as you found it, the next buyer can too. You can always put the blame on the previous seller.....but if the courts can prove that you were aware, then you are on the hook.

Heck of a chance to take IMO.


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## carverman

Mortgage u/w said:


> It may not be written on the listing....but the seller will be obligated to fill out a vendor's declaration if an offer is made and accepted. He will surely divulge the information on that form.
> 
> If he doesn't and you go along with it, then its at your own risk. You accept the house as is. When you resell and you too do not declare it, its still a risky move because just as you found it, the next buyer can too. You can always put the blame on the previous seller.....but if the courts can prove that you were aware, then you are on the hook.
> 
> Heck of a chance to take IMO.



Yes...
There has to be an environmental air quality assessment done on the house. Mike Holmes (Holmes on Homes) called in the pros on a grow-op, he practically gutted and rebuilt due to electrical and black mold issues. The environmental company had to tape up the house, pressurize it and read the air quality for mold spores in the air with sensitive equipment.

Without a certification of air quality safety, one would be nuts to buy a former grow-op, but that is their money, their health at risk and their business of course.


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## techsoul

carverman said:


> Without a certification of air quality safety, one would be nuts to buy a former grow-op, but that is their money, their health at risk and their business of course.


I have a certification of air quality. The house passed without issue.


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## Mortgage u/w

techsoul said:


> I have a certification of air quality. The house passed without issue.


I think if you are planning to live in it and have intentions of renovating (such as the unfinished basement), I think it is a good deal. You are buying below market value, renos will increase value, and you are making use of the property in the meantime.
The air quality test coming back positive is a good sign.....property has been through 2 owners so I'm sure the grow-op effects are gone. I would still perform due diligence and proceed with a good inspection.


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## techsoul

Mortgage u/w said:


> I think if you are planning to live in it and have intentions of renovating (such as the unfinished basement), I think it is a good deal. You are buying below market value, renos will increase value, and you are making use of the property in the meantime.
> The air quality test coming back positive is a good sign.....property has been through 2 owners so I'm sure the grow-op effects are gone. I would still perform due diligence and proceed with a good inspection.


This was my original thought, but the negative reaction I've received here and otherwise has largely scared me away from this opportunity. I also saw the property sales history and it took a long time to sell the last two time. One of the reasons I don't like housing as an investment is the lack of liquidity. The current owner might be trying to reduce their risk by selling when the market is hot. Even now, the place has lingered for almost 2 months.


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## carverman

techsoul said:


> This was my original thought, but the negative reaction I've received here and otherwise has largely scared me away from this opportunity..


Not to worry, there are always buyers out there that maybe willing to turn it back into a grow-op. With the new laws that make "grow yer own for medical reasons" illegal,
new opportunities may "crop up" again to cash in.:biggrin:


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## Mortgage u/w

techsoul said:


> This was my original thought, but the negative reaction I've received here and otherwise has largely scared me away from this opportunity. I also saw the property sales history and it took a long time to sell the last two time. One of the reasons I don't like housing as an investment is the lack of liquidity. The current owner might be trying to reduce their risk by selling when the market is hot. Even now, the place has lingered for almost 2 months.


I would not take it negatively......Its simply constructive advice. Obviously 'grow-op' is not a favorable term when talking about properties. People are very cautious or simply run away - but its only because they either do not fully understand it or don't want to bother with it. 

As long as you are aware and understand all the drawbacks, then it should not stop you from proceeding. As a Mortgage Underwriter, I handle a lot of mortgage loans......and former grow-ops are common. I can conclude that there will always be a buyer out there. Sure there are less buyers....but the same can be said about a house next to a highway, railroad, or a house that is outdated and requires repair. My mantra: every house will sell and be sold....just a matter of matching the right buyer to the right house.


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## Fain

You will get alot of negative comments on this forum for alot of speculative purchases. . .I say go with your gut and buy the thing. 10% brains 90% balls, thats how business is done.


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## Just a Guy

I think you'll get negative comments from any topic on this forum. That's not a bad thing, as it can point out issues you may not have thought about. Just because a lot of people are negative, doesn't mean they are correct though.

I remember all the negative comments I got from people when i started my own business, when I bought my first rental, when I started investing in stocks, when I bought a bigger house...it's the way people are when you do something out of *their* comfort zone.

What you need to do is learn to filter the real advice from the opinions and emotions. 

If you can get this place at a low enough price, you may be protecting yourself against future issues and resale. If you think you can't get it for that price, which makes you comfortable, then walk away. Remember there is a broad definition in the term grow op...some are bad, some aren't. Hard for anyone on this forum to give you a valid opinion since none of us actually know the property. All we can do is give you opinions, and maybe something to think about when you look and negotiate for the property.


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## donald

I disagree fain-90% balls and 10% brains is a recipe for disaster(I have done a few 90% balls financial and business moves that in hindsight was such idiotic(the lastest involving real estate and some business jobs I should of knew better)
It's important to act(I started a business at 26 by the seat of my pants and I loved the challenge of it and I am celebrating my 10th year but I got to say....
The correct way is 90% brains and 10% hard work(if you use 90% brains than you can reasonable come to the conclusion that 'balls' does not come into it,might look like it from outside observer's but it is not the case.
However!the irony is you only learn these things by making mistakes(real world mistakes,not text book mistakes not theory mistakes but actual living it mistakes)If the op did in fact buy this coin laundry he might make a go of it and it can be a good investment but the beauty is if he failed(that failure will make him smarter going forward,a failed business or situation is far more valuable imo than any business course at any university.
It's a conundrum lol having said that I would side with caution/thinking/analizing because than when the 'surprises' of this that and the other show up you having a working template and thought out stragies before set out going in,you know what I am saying(getting your capital to start anew is not easy)


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## chaudi

It is the same in any house with a 'water event.' Water events can be caused by many things including leaky roofs, basement and high humidity levels from sup pump and yes grow ops.
It is hard to say because sometimes there is wood in the structure that can turn slightly rotten (dry rot) that needs to be removed like a cancer. But they might have just covered it up. Bet you never worried about that leaky roof water event back in 1992 for 5 year when the water ran down the whole house because grandma was 'asleep' for those years?
Biggest damage is probably to the roof that often can not handle the high levels of humidity anyways. If people vented the grow-op properly it might not necessarily be a problem at all. Nobody likes mold buds...

btw, if you are thinking of buying a house 'as is' which had a water event go and inspect the house in a hot humid day in June/july. You can smell all the mold then. This is the only time! Wood joists and beams, roofs etc will smell fruity, dry wall has a certain smell.


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## globalmacro

We were in a similar situation one year ago. We did proceed and bought a remediated home. No regrets one year later, the only problems we have found have been typical house problems, but so far (knock on wood), no problems related to remediation. We got the house for close to $50 below the list from when we had our eye on it and about 80-100K below market value of comparable homes. Love the neighborhood and the house. 

Now it should be said we did significant due dilligence, but it sounds like something you would do as well. I have all the reports, environmental and air testing, sign off from structural engineers etc. etc. Lots of pictures and information showing the place completed gutted and rebuilt essentially from scratch. I'm willing to bet the stigma fades over time, it would be interesting to know how much that property sells for compared to the comparables in that neighborhood. You might not get a 100% market price but it might be a 10% discount instead of a previous 20% discount. It's true though that you just sell at a discount which is fine since you bought at a discount even if it's the same %. Remember, you make your money when you buy, not when you sell. Also, if you decide to not sell and simply rent out the place, well you can rent it out for close to market value but you paid significantly less, making your return relatively attractive. 

I cannot stress enough how much due diligence you have to do. This particular home was professionally done, with Alberta Health Services signing off on the remediation, professional environmental and engineering firms involved etc. Plus it was a bank selling the property, not a private owner, so I'm sure they wanted it done correctly to avoid future problems. Either way, everything aligned quite well and like I said, it's only been regular house stuff since we bought it. It took a lot of work and I was nervous at first, but in the end I feel better about this purchase than buying a bungalow from the 50s where you haven't been able to check behind the walls etc, where there might be hidden water damage. This place was gutted and rebuilt professionally, so you know all the details. 

Also, everyone told me I wouldn't get financing from a Tier 1 lender. Well when I went through the process I had two Tier 1 banks fight over me and I got one of the most competitive rates out there. Insurance was also no problem. 

Just food for thought. In the end it's a very personal decision and should be based in objective research as to the quality of the remediation, the house, and your 'exit' plan down the road.


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