I don’t know if this has ever happened to you or not, but I had to tell someone yesterday that I couldn’t pay them even $500 or $1000 for their house. In fact I had to tell them that they needed to call Habitat for Humanity and see if they could donate the land and get them to tear it down.
Where did I get this lead?
This lead came from one of my probate direct mail campaigns. The house was in such bad shape that the only thing anyone could do was tear it down. I also had to go over what I thought the cost would be if the city was forced to tear it down. After having this same conversation with our local code officials a couple of years ago about another property, I knew that they would charge somewhere between $10,000 and $15,000 to tear the house down and haul everything away. That price didn’t take into account any charges for removing the huge, dead trees on the lot.
How did the seller find herself in this position?
The person I met that day at the house was a relative of the deceased person, but she hadn’t been to this property since she was a child, somewhere around 25 or 30 years ago. All she remembered was “what a lovely piece of property this cottage sat on”. I can tell you that this was anything but a lovely setting today.
It was on a street that has become quite distressed over the years, and this particular house even though it was in a residential neighborhood, was set back toward the rear of the property. I would say that it was located almost where you would expect a garage to be located that faced an alley. She tried her best to get me to just give her some money so she could “get out of town”.
When she drove from Florida to Kentucky, what she was expecting to find was a house that she could sell quickly and make some money on after cleaning it out. That was a far cry from what she found.
This house was built in 1909 and still had the original windows that were rotted, pieced together and had been repaired many times. A lot of the glass was missing and had cardboard over the panes. It also had severely damaged asbestos siding and a roof that was well beyond its lifespan. On the interior, there were large sheets of plywood covering the holes in the floor, and more sheets of plywood attached to the ceiling where it had fallen in. The kitchen was probably from the 1930’s with metal cabinets, as well as a metal drain-board and sink all in one piece. A heavy smoker had lived in this house, and I would say that if it ever had been painted, it was 50 years ago. Brown nicotine stains could be seen running down the walls.
I could go on and on, but I’m sure you get the picture — I actually never went past the first room in the house. While the exterior of this house was rough, it didn’t give any indication of just how bad it was on the interior.
Screening your Calls
Needless to say, I screened this person like I do all of the folks that call me. While she was truthful about some of the questions I asked, for the most part she lied about most everything else. When I asked her why she hadn’t been truthful about the house, she looked me in the eye and said, “If I had told me the truth, you wouldn’t have come out”. She was certainly right about that. The next thing she said was, “You are a professional real estate investor, and I was sure you would have a solution. I was sure you would pay me something for the house and take it off my hands”.
I told her I was a professional real estate investor, but I wasn’t a miracle worker. The only thing that could be done with this house was to tear it down and start over. She then suggested that I pay her for the land. I didn’t even go into the whole discussion that no one would want this land; that it would take so much money to build a new house, the overall property values of the neighborhood just didn’t warrant that. I just told her I didn’t invest in land, wished her luck and was on my way.