Commentary: Foreclosure – The Human Element

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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.

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.

About Author

Bill and Jackie Patterson are Nationwide Short Sale Investors. Both licensed Realtors, they have an eclectic background including development, construction, apartments, and restaurants since 1980.


  1. Yes there is something to be careful about. As investors we must not forget that many times something that may just be another deal could have recently been a family’s hopes and American Dream.

    Focus on helping those in foreclosure not just the profits.

    • Jackie Patterson on

      Thanks for the reply. We’re always excited to find a great fix and flip opportunity, but I struggle thinking of the family whose life was shattered. As my husband reminds me however, we did not cause the foreclosure, and we are helping the market when we take a distressed home, fix it up and get it back on the market at a retail price. (Hopefully making a BIG profit!) At least when we work with short sales, we take comfort in the fact that we are helping them with an exit strategy that is better for their credit and will allow them to get back on track quicker.

  2. Jackie, I wrote about this subject on my own blog last summer. In 2009, I had to do a short sale on the only home my little girls ever knew because we were broke. Through the process I learned a lot. Most importantly, that home is where your family and stuff are. The memories are portable. My wife, daughters and I quickly adjusted because the people inside the four walls, the pictures, the blankets, toys, furniture, books, dishes, and treadmill (I should have left that at the old house) were all the same.

    We miss certain things about our old house. The pool tops the list. The park within walking distance is another. But, these are features. Our new neighborhood has features too that my girls love, like the tunnel we ride our bikes underneath on the way to the nearby park.

    Your child may have handprints on the front steps and their dog buried in the yard. Maybe they learned to walk in the living room or ride a bike in the driveway. The good news is you can bring these memories with you, along with the Time magazine collection and treadmill that weighs 900 lbs.

    Great post!

  3. Jackie Patterson on

    Thanks, Marty! We work with lots of short sales nationwide, and my heart always aches when I hear the stories. Knowing that we are helping them get out of a bad situation and back on their feet helps alot.

  4. I learned some history of our current project….
    My contractor is freinds with a previous owner (not the last one). He told me a story of how they got into trouble for bringing “one more” car project to the house. He pointed out some shelves in the garage they built over 25 years ago.
    When I look at some of the “attempted repairs” as you called them, I wonder “what were they thingking”.
    Thanks for sharing

  5. Great article!

    It’s always refreshing when an investor can — without compromising their business decisions — keep a firm grasp on the human element of this business. Too many investors never take the time to consider that this business is based on people, and keeping that perspective not only keeps us human, but also gives us the mindset that ultimately allows us to succeed in this business.

    We picked up another REO last week. When my wife and I drove up to the house to look at it for the first time, she said (with a very sad demeanor), “Awww…this is where Antonio used to live…”

    She told me about how when we used to drive by this house last winter (while working on a couple others in the area), there used to be a big sign out front that said, “Congratulations Antonio! 2010 High School Football Captain” (or something along those lines).

    Every time I go to that house now, I think about the fact that there is a real person named Antonio and his family who lost their home and likely had to rebuild their life…

  6. Great article, Jackie and Bill. I’ve read a lot about the foreclosure crisis in terms of shocking stats and editorials in the Wall Street Journal, but I found your very simple descriptions of the physical artifacts that make a person’s home to be the most compelling. Thanks for writing.

  7. Yes, sadly, there always is the human element involved. Never forget that, even though we are running a business. Its sometimes too easy to lose sight of who we are and what we do. I found a really invaluable ebook about the business recently that helped me focus on the fundamentals. If you’re interested, you can see it at Good luck!

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