The term “Grow Rooms” is used to describe the use of certain sections of a residential property to produce a controlled substance. Drug houses have a significant impact on the available number of defective homes and off market deals.
Homes with defects are vital because they allow our negotiators to use condition adjustments to lower the appraised price below market. Location of these properties vary, however production facilities in upscale neighborhoods are often chosen to conceal its operation from law enforcement.
Florida recently passed legislation (SB 8A), medical use of marijuana for individuals with specific debilitating diseases or comparable conditions. The first medical marijuana dispensary opened November 2017 in Palm Beach.
The largest indoor grow houses are usually hidden in plain sight, in big houses relatively removed from neighbors, with manicured yards and polite, quiet residents. – Lt. Bobby Goggin, Volusia County Sheriff
A byproduct of legalization in some states has been the increase of home pot growers. Authorities say that since 2010, over 700 pot grow houses have been busted in Central Florida. The production of marijuana in residential properties causes structural damage as well as patent and latent defects to homes.
The Orlando Sentinel reported that “The largest hauls came from Orange and Volusia, where more than 6,000 plants were confiscated in each county since 2010.” If asset forfeiture or seizure does not occur by the Drug Enforcement Agency (DEA) or local law enforcement these homes can be sold.
At resale, these defects likely will not meet any of the criteria of safety, soundness and sanitation needed for most forms of financing. This decreases the number of contracts offered to banks. Moreover, due to the damage these home possess it causes the offers to be lower. Condition adjustments occur when needed repairs are subtracted from the market value. The need for remediation and remodeling creates an opportunity for buyers as the size of this adjustment is very subjective.
Production of Marijuana/Methamphetamines on Site
The property leads I produce concentrate on marijuana and methamphetamine (meth) grow facilities. The manufacturing of these two drugs produces large amounts of damage as well as make the structures unstable. Some operations are housed in trailers or storage facilities. But the ideal homes were discovered in unassuming houses in suburban neighborhoods.
In order to produce a closed growing environment, the growers have to artificially produced sunlight and warmth. They accomplished this by sealing all the windows with plywood and using high amperage horticultural lamps.
Bank asset managers have difficulty discerning the true costs of remediation and remodels.
“Grow houses can use two or three times as much electricity as an average residence,” said Lt. Bobby Goggin of the Volusia County Sheriff’s Office. “Bypassing the meter means residents don’t have to pay for extra power and don’t raise any red flags with the electric companies because of extraordinarily high usage. Residential grids are ill-equipped to handle the amount of electricity needed for a large grow house, and the taps can be done sloppily, often causing fires.”
The light that is given off from the lamps (in a sealed room) produces massive heat. So air conditioning systems are installed in between rooms to regulate this heat. Multiple holes are cut into the ceilings and walls for ventilation. This ventilation into the attic causes excessive moisture. Moisture produces mold and rust.
Rewired electrical circuits, mold that develops in the attic and is carried through the home in poorly installed HVAC systems creates an unstable property. Remediation usually must take place were mold and mildew is found in the drywall and attic. Due to the condition of most drug houses, overtime they become uninhabitable and unsafe to live. If you can re-mediate and remodel these homes they are great ways to purchase property below market value.