GROW OPS

patriciacw

Inspired Forum Member
REIN Member
I was looking at an attractive older building. But my real estate agent pointed out it was probably a grow op. First one I`ve seen. Looks like he`s probably right.
Should you never ever buy a property used as a grow op?
One wall in the basement is chalky white... probably moisture residue.
Can I quietly deal with this... or is it all too danger zone?
One worst case scenario I read about was that some "hoodies" may try to break in after one moves in to recoup any left-behinds.

Your thoughts and input are appreciated.

By the way, does anyone know how to insert one`s photo?
I always appreciate it when others do that.
 

RobMacdonald

New Forum Member
Registered
The problem is that there really are no standards developed by the government on the remidiation of grow-ops. I`ve dealt with clients that have bought these types of properties, but the financing is very difficult. Most lenders will require a substantial equity position and the property must meet very stringent air quality testing.

You really need to be cautious and know what you`re looking at.
 

NorthernAlex

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Registered
QUOTE (patriciacw @ Dec 16 2008, 02:24 AM) ......By the way, does anyone know how to insert one`s photo?....



Hi Patricia.

To add a photo

- go to MY CONTROLS
- left hand side you will see the menu which includes PERSONAL PROFIL
- there you will find CHANGE PERSONAL PHOTO

CU,
Alex.
 

Dan_Eisenhauer

New Forum Member
Registered
As a property manager I have had personal experience with a grow-op, Patricia. Rob touched on it, but did not go into detail.

Grow-ops often have hydroponic watering of the plants, meaning a drip watering system. They also have a large number of lamps over the plants. This is what causes the heat that can be seen with Infra Red cameras.

The combination of the heat and water make for an extremely humid environment, with no evacuation of that humidity. The vapour gets into the walls, the attic, etc. Depending on how long the grow-op was there, mould begins to grow and air quality deteriorates for normal habitation. It is this ongoing threat to health that causes lenders to have heart attacks when they learn it was a grow-op.

This does not even talk about repairing the damage caused to the building by the deconstruction that occurs when installing the system... the holes in the walls... the tapping into other electrical lines... the rigging of plumbing systems, etc. It is no wonder so many grow-ops go up in smoke. (pun intended).

To remediate a grow-op building/apartment, it should be stripped to the studs throughout, and checked for mould. Obviously, if mould is present, it needs to be treated. In Vancouver, the home owner has to jump through major hoops in order to get a new occupancy permit after the unit was used as a grow-op, even though the owner may be a completely innocent third party. It takes months to reoccupy here.
 

Jack

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Registered
If you know a dealer that wants to expand his/her R&D facilities, and if said dealer will give you a healthy proportion of drug-dealing revenues generated by the property, suddenly you`ve got a cash cow on your hands!

Do it!
 

invst4profit

New Forum Member
Registered
Although there are definitely difficulties, as pointed out, for the right investor grow-ops can be big money makers. The key is in knowing what you are doing and of course getting the property at an absolute rock bottom price.
If it is a past grow-op that has now been renovated and approved to live in use it`s past as a negotiating tool to purchase below market. If it is to be used as a rental concentrate on high positive cash flow rather than anticipated appreciation.

The smell of a grow-op is the smell of money if you aren`t the one smoking it.....
 

patriciacw

Inspired Forum Member
REIN Member
[quote name=`patriciacw` date=`Dec 16 2008, 12:24 AM` post=`45413`]

Reply to Rob Macdonald

[Most lenders will require a substantial equity position and the property must meet very stringent air quality testing.]

Hi, Rob,

What would you consider a `substantial equity position` in these situations...on average? What percentage down?

What agency in Ontario would typically conduct the stringent Air quality testing? Is it a private or gov`t agency?

Thanks for your comments.

Patricia
 

patriciacw

Inspired Forum Member
REIN Member
[quote name=`RobMacdonaldCMT` date=`Dec 16 2008, 02:12 AM` post=`45416`]
Reply to Rob Macdonald

[Most lenders will require a substantial equity position and the property must meet very stringent air quality testing.]

Hi, Rob,

What would you consider a `substantial equity position` in these situations...on average? What percentage down?

What agency in Ontario would typically conduct the stringent Air quality testing? Is it a private or gov`t agency?

Thanks for your comments.

Patricia
 

patriciacw

Inspired Forum Member
REIN Member
[quote name=`Dan_Eisenhauer` date=`Dec 16 2008, 10:44 AM` post=`45455`]


To remediate a grow-op building/apartment, it should be stripped to the studs throughout, and checked for mould. Obviously, if mould is present, it needs to be treated. In Vancouver, the home owner has to jump through major hoops in order to get a new occupancy permit after the unit was used as a grow-op, even though the owner may be a completely innocent third party. It takes months to reoccupy here.


Thanks, Dan!

Great input. More clear than what I was finding online.

Cheers,
Patricia
 

patriciacw

Inspired Forum Member
REIN Member
[quote name=`NorthernAlex` date=`Dec 16 2008, 07:17 AM` post=`45430`]Hi Patricia.

To add a photo

- go to MY CONTROLS
- left hand side you will see the menu which includes PERSONAL PROFIL
- there you will find CHANGE PERSONAL PHOTO

CU,
Alex.

Hi, Alex,

That was helpful! I`ve progressed to the extent of adding the photo to be seen only when you click on my name... and the Member Profile then pops up with the picture.

But I still haven`t figured out how to get it visible on the left sidebar when you post... the way others seem to be doing. Got any added input to take me the last lap?

I`m such a visual person, I love to see who I`m talking to, and want to extend the courtesy to others.]

Patricia
 

BigKen

New Forum Member
Registered
I have appraissed residential properties in the Calgary/Area for the last 10+ years and based on my experience with grow-ops the best advice I can think of is NEVER EVER BUY ONE
 

zimnicki

New Forum Member
Registered
QUOTE (BigKen @ Dec 17 2008, 01:51 PM) I have appraissed residential properties in the Calgary/Area for the last 10+ years and based on my experience with grow-ops the best advice I can think of is NEVER EVER BUY ONE


Here in winnipeg there a number of grow ops, but i dont know anyone that would want to get into that. Sure it would be a great investment in the long run, but you would have to tear down the whole house (inside), but to each there own!

like some other guys have said, just stay away, but any great investor would say "why not, just do it!" only way you`ll learn!
 

Mike Milovick

Inspired Forum Member
REIN Member
I would never touch them. Think about your exit strategy and disclosure issues - or non-disclosure. Think about operating issues going forward re: mold, electrical etc.

Or your tenants when they are approached by the neighbours. "Did you know you are living in the grow op house?" Or your tenants when they decide to sue you for "respiratory issues."

High likelihood your insurance company won`t touch them either.

Why buy something with this type of stigma when you can pick up a non-encumbered property elsewhere?

Mike




QUOTE (patriciacw @ Dec 16 2008, 02:24 AM) I was looking at an attractive older building. But my real estate agent pointed out it was probably a grow op. First one I`ve seen. Looks like he`s probably right.
Should you never ever buy a property used as a grow op?
One wall in the basement is chalky white... probably moisture residue.
Can I quietly deal with this... or is it all too danger zone?
One worst case scenario I read about was that some "hoodies" may try to break in after one moves in to recoup any left-behinds.

Your thoughts and input are appreciated.

By the way, does anyone know how to insert one`s photo?
I always appreciate it when others do that.
 

invst4profit

New Forum Member
Registered
Why buy something with this type of stigma when you can pick up a non-encumbered property elsewhere?

Mike




The reason to invest in real estate is MONEY.
Why invest in this rather than a non-encumbered property- MORE MONEY.
The only difference is risk and as we all know the higher the risk the greater the expected return.

Everyone has there own specialty and every investment has it`s own risk level. If you ask Joe average on the street if they would be comfortable buying a $300,000 property and become a landlord what would there answer be?
If a individual were educated in this specialty field of renovation, as members on here are educated in rentals, thereby eliminating/reducing the risk why not?
 

dplummer

Inspired Forum Member
Registered
As a remediation contractor I have remediated grow ops for banks, home owners & have even bought some for my self. They can be very profitable if you know what your doing. Here in Ontario I think you`ll find most banks will not loan money on them until they`re remediated. Low cash offers work great. From my experience houses have had no problem selling after remediation. There are a number of quality consultants to perform air testing. Not cheap.You can pm me if you like & I`ll try to help.

Doug
 
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