Fixers are to be found via numerous avenues. Sometimes I get word of a pocket listing, every now and then I find a gem on the market! Most opportunities arrive from a wholesaler (who obtains properties and sells them off market to investors). But one day, I found a potential opportunity right across the street.
A woman lived in the house for decades with a partner I had never met. She had passed away during Covid and left the house to her partner. I knew they spent part of the year at a property in the south - so it didn’t phase me when no one seemed to be around. Last winter, a construction crew appeared to be working - I figured it was a big remodel. An old dishwasher was sitting on the porch - presumably to be taken away at some point. But it just kept sitting there and sitting there - until I ventured to peek into the window and was shocked to see a completely gutted house! I immediately decided to write to the owner and see if he was interested in selling to me.
After my letter was returned with “ no return address”, I decided to investigate further - where was the owner living? Using my sleuthing skills, I was able to determine an address in South Carolina. I then sent a letter about my interest in purchasing the property as-is. I did not hear back.
As the weeks went by, I saw a notice on the door. It was for a trustee sale a few months away. I figured the owner had no idea about this debt and wanted to make sure he knew that he would lose the house if he didn’t pay up! I was hoping to offer him a sum that would provide a generous nest egg and pay off his debt.
When neighbors who had been away during their own remodel resurfaced, I was able to learn more about the owner. He was very reclusive, was not confident in his ability to speak English - and therefore never answered his phone. I also learned that the crew working on the home was because of a massive leak from a burst pipe - which is why all the drywall was removed.
I decided to seek his real estate agent in South Carolina - and she was eager to assist me in helping him, given the circumstances. I also wrote an additional letter to him in both English and Spanish, along with the copy of the trustee notice. I was ready to help him get through this without losing his asset. The agent tried to reach out to him via phone and text without any luck. She figured the only way to communicate would be to visit his home.
She ended up sending her assistant to his home to relay the message and see if he had received my letters. The house looked like it was in extreme disrepair and she was worried about the owner. She knocked several times and no one answered - but dogs were barking wildly. She felt that something might be wrong, so called the police for a well-check. Unfortunately, several police cars showed up and the neighbors thought it was a shoot-out! The whole thing ended up on their local news! And he never came to the door.
I was gearing up to send a certified letter that he would have to sign for, when the agent reached out in a panic. Apparently, he had been caught stealing electricity and water (his property was rural) and when he resisted arrest, he was tazed. And now he was in the hospital unconscious. The authorities were trying to connect with his family - and the agent was hoping I could help. In speaking with neighbors, I found that he had an estranged son who lived in Cuba and that under no circumstances would he want to hear from him. Sadly, I was unable to help.
He woke up eventually and made it home. I offered the agent a referral if she could get my message about a purchase to him. The auction date was now fast approaching and I really wanted to do right by him.
At the same time, I began researching how I could bid at the auction. It involved hiring a company that would show up with multiple cashiers checks to accommodate bids up to my max. The fee would be 3% of the purchase price. There would be no guarantees that there would be no other liens, taxes to pay; I felt trepidation about the unknown. I was also going on vacation so I decided that it wasn’t meant to be.
A week or so after the auction, I saw that it was sold for $125,000. I reached out to the owner and they were already in contract to sell it! After a few weeks, I found out that it sold for $280,000. Note that neither of these parties had even seen the house, much less stepped foot inside.
I reached out to the new owner and left a message. The next day I got a text from a listing agent saying they were preparing to list! I really wanted to buy it off market and was awaiting a response to see it. I needed to walk the house to see the layout and what needed to be done. Then I get a message from a wholesaler saying they are not going on the market - but that they are just going to open it for investors. I pleaded to let me see in advance - and to consider an offer to cinch the deal. Their list price? $375,000.
I want to remind you that this is a GUTTED house - it needs literally everything done (except the roof! that was newish). I ran the numbers and texted my offer - a little over the list price. All day I was given the run around and finally, I was told they were going to hold their open house and see what offers they could get.
The next day at the open house, I watched dozens of investors tour the home. The host whispered to me “we want you to get this house, but we couldn’t cancel since so many people had told us they were coming”. I hung out just to see what was up. Usually, these things are 30-60 minutes - but this one dragged for TWO hours while I panicked about all the interest.
The emotional energy I put into trying to buy this house was strong. The neighbors are all incredibly worried about what a random investor might do. I knew I would create a beautiful property that our block would be proud of. But at the end of the day (as I kept putting higher and higher numbers in my spreadsheet), they had about 20 offers and someone offered $500K. I could no longer compete.
The disappointment weighs heavy on me - the greed gone a little wild, promises broken and so many people making SO MUCH MONEY for doing absolutely nothing. And here I was trying to do right by the owner. It’s going to be ROUGH watching work begin across the street from me for a house I had tried so diligently to purchase. Let’s hope they don’t create a homogeneous, builder-grade home devoid of all personality. That would be the biggest tragedy of all.
Lessons learned:
Auctions may be a viable option for me! I am now set up to make purchases if a deal crosses my path.
I was able to find a new source of funding, which will be helpful moving forward.
I realized I’m confident enough to attack a project on a much larger scale.
Perhaps I was being too conservative when I did not outbid the highest price? Time will show what the house sells for - and who knows? Maybe I’ll get to list it.
Here’s to hoping an amazing new project presents itself in due time!
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