As the competition heats up in many real estate markets, some real estate investors are opting out of the inspection clause, so their offers are more attractive to the sellers. In many cases, they are fortunate and do not run into serious issues with the properties they buy. However, it is not always that lucky. There are more and more homes that are contaminated with a variety of different toxic substances such as mold and meth. Meth is what the rest of this post is going to be targeting.Any third party seller is going to sell their property AS-IS, so they do not have to fill out the sellers disclosure that most real estate markets require. If they did fill this in, they would be held accountable for what they did disclose and what they did not disclose. Many of these parties have not lived in these properties and they have not done thorough inspections of the property, so they do not want to be held accountable for the properties issues. You will find that REO, bank owned, corporate owned, and estates will be the majority of the sellers selling properties AS-IS.Many people do not think that Meth is as common and big an issue as it is. Drug czar Gil Kerlikowske, head of the president’s Office of National Drug Control Policy, testified that “U.S. meth lab seizure has more than doubled between 2007 and 2010, and these labs pose a major threat to public safety and the environment.”
Here are the chemicals that are typically used to produce meth:
- Flammable and volatile solvents such as methanol, ether, benzene, methylene chloride, trichloroethane, and toluene
- Other common household chemicals include muriatic acid, sodium hydroxide, table salt, and ammonia.
- Meth-related chemicals not commonly found in large amounts in homes include anhydrous ammonia, red phosphorous, iodine, and reactive metals.
- Other hazardous chemicals can be formed during the “cooking” process.
As you can see that these chemicals are toxic and offer a lot of fumes from the cooking process. Here are the signs of a potential Meth lab to protect your investment and your property from catastrophic damage:
- A strong smell that might resemble urine, or an unusual chemical smell like ether, ammonia or acetone.
- Little or no traffic during the day, but lots of traffic at extremely late hours.
- Extra efforts made to cover windows or reinforce doors.
- Residents never putting their trash out.
- Lab materials surrounding the property (lantern fuel cans, red chemically stained coffee filters, clear glass jugs and duct tape).
- Vehicles loaded with trunks, chemical containers, or basic chemistry paraphernalia – glassware, rubber tubing, etc.
- Laboratory glassware being carried into the residence.
- Two liter soda bottles with residue inside of them.
- Stains in bathtubs and toilets throughout home.
- Inhabitants smoking outside due to fumes.
Here are some factors that need to be looked into in order to determine if any given property has had any past drug activity and known meth issues:
- Talk to the property’s neighbors.
- Contact the local health department and police for past issues.
- Buy a kit to test for chemicals.
Decontaminating a former meth lab can run anywhere from $5,000 to $150,000, according to experts. There are different remediation requirements in the real estate markets throughout the Nation. In some areas, it is going to be a heck of a lot more costly to rectify this issue than is others. The other factor is that if you rent or sell this property to someone without rectifying the meth contamination and they get sick, you stand the potential of getting sued. One other factor to note, it is not isolated to low income or depressed areas either, it is just as common in the suburbs as it is in the inner city. I just want to make sure that you know to do your due diligence to ensure you are making a wise and profitable real estate investment.