During the hundreds of deals I’ve either supervised or personally done, I’ve encountered more than a few meth houses. This begs the question, how do you actually rehab a meth house? There are three major steps involved.
In this article, I’ll cover the steps investors need to take to identify and rehab meth houses to turn them into profitable deals:
What is a Meth House / Drug House?
As with most scenarios, I’d rather use an example from my personal experience to describe a meth house.
A few years ago – and in a bit of a rush – we failed to properly screen a tenant. Over the first couple months of the lease, we received reports that this tenant wasn’t taking good care of the property. But, we made a decision, and we allowed the tenant to stay, figuring that no more damage could be done to the property.
Fast forward another couple months, and the tenant just up and left in the middle of the night. When we arrived at the vacant house, we learned that the tenant had spray painted the interior and just left the place trashed, in general.
As we’d seen behavior like this before, we suspected that the tenant had been using the property to make drugs – cook meth, to be specific. Accordingly, we hired a professional drug inspector to complete an actual meth test, and we confirmed that the house had, in fact, been used to make meth.
Furthermore, the residue left from this drug manufacturing exceeded our state’s clean-up requirements (different in every state). As a result, before bringing in another tenant or selling the place, the law mandated that we clean the property to a certain standard.
With this story as background, broadly speaking, two categories of meth houses exist:
- Type 1 – an actual meth lab: My above house falls into this category. These are houses where tenants actually make drugs. As such, meth levels typically far exceed allowable limits, and the likelihood of significant, long-term damage is high, especially with the risk of explosion during the meth-making process. For investors, these properties pose tremendous potential risk.
- Type 2 – a drug-user house: Casual drug users live in and socialize in these houses. While these sorts of homes certainly have some level of meth residue, the levels won’t necessarily exceed state thresholds for clean-ups. These properties, though still risky, pose less risk than an actual meth lab for investors.
Signs of a Meth House
When trying to quickly find an investment property, investors should understand the telltale signs of a meth house. First and foremost (and a sign we saw in the above property), meth labs generally have stains that look like someone shook up a Coke can and sprayed it all over the ceiling. If you see this, chances are someone used the property to cook meth.
Additionally, finding trash all over a house may not guarantee that someone made meth there, but this level of disrepair often suggests some form of criminal activity.
For quick external indicators, investors can likely tell a meth house when they witness any of the following during a walk around a property’s exterior:
- Strange odors: Cooking meth creates extremely pungent odors that smell like ammonia or ether.
- Covered windows: To shield their illegal activities, meth makers often black out or cover windows to prevent casual passers-by from seeing inside.
- Odd ventilation systems: To rid the toxic fumes produced in the meth making process, drug makers often use strange ventilation systems (e.g. opening the windows on cold days or at strange times, rigged up fans, furnace blowers in windows, etc).
- Elaborate security: To protect their labs, meth makers often employ elaborate exterior security measures (e.g. “keep out” signs, guard dogs, video cameras, etc).
- Dead vegetation: The ingredients used to make meth are extremely toxic, and meth makers often dump the excess outside, killing vegetation around the house in the process.
- Excessive trash: Meth requires a lot of chemical ingredients – all of which leave behind a ton of packaging trash. People cooking meth often dump trash around a property, as they may not intend on staying there for an extended period of time.
While all of the above indicate meth making, the only way to actually confirm that a property held a meth lab is with a meth test. Potential buyers can either hire professionals or use a self-test kit, swabbing areas of the property and submitting them to a lab in a sealed container for testing.
If you even suspect that a property has been used to make meth, I highly recommend getting it tested. This upfront cost far outweighs the potential legal and health risks of unknowingly buying and renting out a former meth house.
Steps to Rehab a Meth House
After explaining meth houses and how to identify them, I now need to talk through how to actually rehab a meth house.
- Formerly, you needed to tear out and completely replace the walls, sheetrock, and carpets from a confirmed meth house.
- This onerous requirement often made rehabbing a meth house cost prohibitive.
- Complete the treatment process with a spray-down technique.
- You’ll still need to tear up and replace the carpets, but you can spray the flooring, walls, and sheetrock with a chemical solution that, once dried, removes the meth residue.
- Paint and refloor the property how you would during any other home rehab process. Depending on the size of the property, this meth spray treatment will typically cost you anywhere from $3,000 to $10,000.
But, make sure you work with an actual meth clean-up specialist, not some random contractor you find on Craig’s List. Local realtors typically have relationships with certified specialists and can help you find a reliable one.
Should You Rehab a Meth House?
So, does rehabbing a meth house make sense for you as an investing strategy? Before even considering this question, make sure you have all the information. In other words, once you’ve placed a house under contract, if you even suspect prior meth use, make sure to get it tested for meth residue during the due diligence period.
If this test comes back positive and above the state-allowed threshold, you should get a professional clean-up bid prior to moving forward with the deal. That way, if flipping the property, you can accurately factor this cost into your rehab budget (and potentially use it to negotiate a lower purchase price).
And, if you move forward with the purchase and clean-up, make sure to test the property a second time after the clean-up to provide yourself both peace of mind and solid legal protection.
You can find profitable deals with meth houses, but you need to understand A) testing requirements, B) state-specific clean-up and disclosure (i.e. stigmatization) laws, and C) costs associated with rehabbing these sorts of properties.
If you fail to understand these considerations, at best you’ll take a loss on a deal, at worst you’ll cause serious health damage to a future tenant.