Category: Blog

We just bought this house from a very nice woman who unfortunately was given short notice that her late taxes had led to a foreclosure by the County. We were able to close the sale just before  the tax auction guillotine came down, buy her a nice house in Old Fort and leave her with $46k in cash.

It’s a 3/1 brick house on a full basement, badly outdated kitchen and bathroom, and generally cosmetically challenged. We’ll add a second bathroom, upgrade the first, then blast out the kitchen wall and make a much larger, nicer kitchen. We’re excited about this project!

Use 531 JSR pics…

My very first investment purchase was a cute little 900 ft.² house on .6 acres of land very close to West Asheville. The house looked a bit rough, and per our initial inspections looked like it may need a fair bit of work in several different areas. As it turned out, not only the house, but the neighborhood was rough, and we had issues with repeated theft and vandalism during the rehab process. We also suffered the late realization that most of the large lot was not usable, since a small creek was piped under the front yard, and building was not allowed there.

Utilities were not on when we inspected and purchased the house, so we did not realize that the plumbing leaked- almost all of it. Our plumber dubbed it the Garjanguator 2000 and charges us $4700 to replace it all. Electrical and HVAC all needed substantial work as well. We also, despite a thorough inspection, missed a major foundation issue that was hidden in an extremely tight area of crawlspace, and required tearing out the floors, subfloors and joists to repair from above, then rebuild.

At this point I was over budget, completely out of money, and hadn’t even started with the major cosmetic upgrades which I had planned to use to add value to the home. I started working overtime at my contract job, stopped paying my quarterly income taxes, maxed out my Lowe’s card and my regular credit card, and finally completed the project six months after starting what was originally planned to be a six-week cosmetic upgrade.

Insult to injury came when the home appraised for $111,000, $36,000 less than what we had in it. I had no choice at the time but to take the resulting loan, leaving my entire life’s savings wrapped up in a project that ended up paying us about $2700 per year after mortgage and rental maintenance expenses- less than that same money would do in the stock market.

Battered but undaunted, I took out a home equity loan as well as a personal loan, and started looking for another house to buy. The market was very competitive at the time, and I could not find an affordable home to purchase. I did however find two homes sold together, in a decidedly subprime area of Swannanoa, one of which resembled my first purchase, and the other of which resembled a creation by the famous Dr. Seuss. The leaning chimney was affixed to the house with two coathangers strung together (pic here if I can find one- maybe in inspection report), and a large section of the foundation had been washed away and replaced with a huge pile of mulch.  In this case, the seller and I were both aware that the homes needed extensive work, and we started with a price that left us only $7,000 in the hole after appraisal, but with a remarkable, if decidedly funky, outcome.

Despite improvements, this project was far from smooth. Our main contractor at the time, who we no longer work with, delayed his start by a month, and ran into several logistical hurdles which put us two weeks from our lease start date with no running water, no closet, no kitchen, and an electrical system that would not pass code in Bolivia. As a result, I found myself jack hammering up the concrete slab at 1130 on a Friday night, hoping and praying that we could run a new sewer line, refill the hole with concrete, re-floor the entire downstairs, then coordinate the electrician and plumber to work overtime on the weekend so our tenants could move in as planned on Monday. Needless to say, I no longer sign leases until after projects are complete!

All of these issues pale when compared to the stress inflicted by indecisive lenders, who have oftener than not flailed at the last minute, leaving us twiddling our thumbs at the closing table hoping they will come through as promised. Banks are the number one source of stress for real estate investors, and I’m very happy to be gradually becoming less dependent on them.

More recently, we purchased a home that seemed structurally fairly sound even on careful inspection, but smelled so strongly of pet urine that the odor was notable from the driveway when the door was open. We quickly dubbed this the stinky house, and the name stuck- and stuck… Hundreds of hours of labor, 15 gallons of Kilz, New flooring, new trim, and 7 gallons of Pine-Sol failed to remove the powerful odor. We ended up having to start over, rip out the new floors we had put in, rip out the subfloors, and replace many of the joists which were literally rotting at their junctures with the subfloor, soaked with pit bull pee. Insult to injury came on this project as well, when the adjacent building lot we had purchased with the house failed its perk test, making it worthless. This project was another loss, but as the famous rock band Heart says,  “what the winner don’t know, the gambler understands”

It’s a good thing I’m a gambler, and a good thing that the wins mixed in have kept me afloat to weather the losses. I’m happy and proud to still be standing, and still buying homes.  ?