Commentary: Foreclosure – The Human Element
We recently spent a full day looking at REOs for good candidates to fix and flip. Although we specialize in short sales, since Bill is a contractor, we also buy REOs to remodel and flip. We were examining these homes looking for opportunities to make a profit, but as we went through home after home, it was impossible not to get a sense of the people who lived there and the memories, hopes and dreams that were left behind.
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One home had a door jamb with dated height measurements of Tom, Matt and Sara. Way up about six feet was a line that said Dad. That same home had a mural of a rocket blasting off on one wall, and stars carefully stenciled on the ceiling. Another bedroom was painted pink with butterflies and flowers lovingly hand painted on. In the basement, someone had taken a lot of time to faux paint the walls, and there was a matching handmade shelf on the wall. Although it’s winter, you could see flower beds in the back with the remains of perennials someone planted.
In another home you could feel the anger, frustration and probably despair. Someone had taken a hammer to the walls, and there were big holes in the drywall. Curtain rods had been pulled off the walls, and doors twisted off the jamb.
In a third home, we surmised they had teenagers that were out of control. While the upstairs was OK, the walkout basement bedrooms had doors kicked in, holes in the walls, and graffiti. You could tell this wasn’t in response to losing the home, as you could see attempted repairs from previous damage.
And then of course you see homes that are smelly, dirty, moldy, and in such bad shape that you wonder how someone could live like that.
As we went through the homes, we were looking at needed repairs, costs, and potential value, and determining if this fit our criteria to make a profit. Every detail of the house and neighborhood was examined as part of an investment strategy. It’s not an emotional decision……..strictly a business. If we buy this home, remodel and repair and then sell it, can we make money?
However, it’s hard to ignore thinking of the people who lived in the home, and the hopes, memories and dreams that were left behind. People lived, loved, laughed, cried and dreamed in these homes. They were raising families, bringing new babies home from the hospital, helping kids with homework, struggling to make ends meet, and trying to live the American Dream. In some cases, they may have brought their problems on themselves, but in others a job loss, medical problems, or something else outside their control may have led to them losing their home. While this has created an opportunity for us to make a profit so we can live our dreams, it’s hard not to wonder where they are now and feel empathy towards them and their loss.