Question about prospecting on abandoned properties
I'm a complete novice to all real estate, but I'm curious about what I've seen recently and wasn't quite sure what terms to search for. I'm talking about abandoned commercial buildings in downtown urban areas being bought by out-of-state investors who bring grandiose visions of how they'll revitalize them and do all sorts of wonderful things.

But then they never do anything including pay taxes and the buildings fall into further disrepair. My questions are what why they are doing this. Pure speculation that the area will improve or something and they just give up quickly? Hubris meeting reality? Some other incentives?

Also, how do they get away with all the unpaid taxes? From Googling I see that one can form an LLC for each property that would limit personal liability. Is that what's probably going on? And are these absentee investors somehow benefiting financially from acquiring such a property in this manner? If so, how would that even be possible?
[{"id": "cms9h2c", "text": "There are a million reasons why an investor would hold off on redeveloping.  Some of the main reasons are as follows:\n\n*waiting until market conditions improve or an anchor tenant is secured\n*unable to obtain the necessary permits/variances for the desired development\n*the original budget for the development was inadequate and the costs are significantly higher than anticipated\n*investor doesn't have enough cash to fund the equity portion of the development\n*the property is involved in a lawsuit\n*unable to acquire all of the parcels needed for the new development\n*environmental remediation is necessary\n\nAll of these things can lead to a situation where the developer cannot obtain construction financing for the project.  For most developers, no financing means no project.\n\nWith regards to allowing the buildings to fall into disrepair, would you buy new windows for a building that you planned to demolish in two years?\n\nI am not sure what kind of taxes you are talking about.  If you mean real estate taxes, that is generally a terrible strategy for any owner because the town can put a lien on your property for unpaid taxes.  If the lien is not paid back (with interest), many states auction off your lien to another party that may have the ability to take possession of your property (for the cost of your unpaid taxes plus the cost of the lawsuit).\n\nI am not an expert on legal issues, but it is my understanding that LLCs limit personal liability; however, the investors in the LLC are still indirectly financially responsible for the property.  If the LLC has no assets (other than the property) and can't pay its contractors, a lawsuit could end up forcing the LLC to sell the property in order to pay the settlement with the contractors.  Alternatively, the investors could put more money in the LLC in order to cover the costs of the settlement (hence the indirect financial responsibility).\n\nIn the end there is no real financial benefit from buying a property that doesn't make money.  The most likely situation is that the investors are still trying to get the permits/approvals needed to move forward with the planned developments.  This can take years for major projects.  ", "replies": [{"id": "cmsttsz", "text": "Awesome, thanks. Yes, I think in some of these cases it is a case of waiting for some sort of financing (and maybe historic tax credits for choice older properties) or possibly hoping to demolish and rebuild. I just found another article about one building that interested me and it did say that the owners were unable to find an anchor tenant, as you note.\n\nThe taxes I was talking about were property taxes. There were a couple of buildings in my city where the owners were a couple hundred thousand behind and just not making payments. But the reaction from some people almost made it seem like they were snake oil salesmen somehow benefiting from screwing the city over, which I found hard to believe, so I thought I'd ask here. Thanks again.", "replies": [], "depth": 2}, {"id": "co2bpw4", "text": "Also, a quick update on one of the stories that inspired my original question: the property owner is in federal prison. So that explains a bit of my confusion, I'd say.", "replies": [], "depth": 2}], "depth": 1}]