If you are looking at a home I always recommend talking to the neighbors if you can. We all have those gossipy neighbors, but in real estate that may be able to help you out. A chatty neighbor may be able to tell you more personal or practical information about the property than you would know otherwise. They may just tell you that you’re dealing with toxic waste.

I just got a call on a home that the owner (who is also an investor) claimed to have an ARV of 170k. All he wanted was 32k. He was honest that it needed a total gut rehab. I figured even if I had to dump 70k into it in rehab this would still be an awesome house.

So I get there and its in an up and coming area of Indianapolis. Right away there are two red flags. Across the street is a condemned boarded up house. The home next door had grass that hadn’t been trimmed all year, termite damaged siding, and a sign that stated “Trespassers will be shot. Survivors will be shot again.” While I have seen that sign before (and laughed at it), I believed it on this home.

Inside the home was equally rough. Soft wood floors, trash, spiders, water damage, cracked plaster, a closet screwed shut (I don’t want to know why), and a strange chemical smell. I walk into the backyard, and there is a large black tarp partially buried into the ground. I notice the neighbor watching me so I walk over and introduce myself, wanting to find out as much info as I could. Like I said, neighbors know A LOT.

What happened with the home?

The previous owner was a hoarder. He had over a dozen cars (none of which ran) strewn around the property. He had added onto the home 4 times. (which explained the sloping floors.) Remember that strange chemical smell and tarp? Well, he used an old kerosene tank in the basement to heat the home, choosing to ignore the rusted out bottom. The tank ruptured leaking dozens of gallons of kerosene into the basement. According to the neighbor, it was over ankle deep. The damage was extensive, and he couldn’t afford to have the kerosene professionally re-mediated. Fortunately for us, the previous owner was resourceful. He used boxes of cat litter to soak it up, then dug a hole in the backyard, filled it with the litter, and covered it. If that doesn’t sound like a toxic waste EPA nightmare…

Given the most likely abandoned home next door, kerosene spill, and derelict home across the street, this is a no go. And while I may have eventually realized this without talking to the neighbor, it sure saved my time finding that out from the beginning.