Sorry for the lack of updates of late, but things have been pretty hectic, trying to get the Wee House done, and getting everything lined up to try to pick up the abandoned property next door to the Wee House at the February tax deed sale. I suppose batting .500 would be good if I were the starting center fielder for the Yankees, but frustrating in the world of real estate. The Wee House still isn’t done (and really not much progress at all the last week or so), but I did pick up the property next door to it at the tax deed sale yesterday for $6,770.
As far as the Wee House, I did get the tub surround tiled, and I’m just waiting on our contractor to finish the sheetrock and get it textured, then I can get to work finishing out the interior. What, you say, haven’t I been talking about getting sheetrock finished for weeks now? Yes, yes I have. Does it take weeks to get sheetrock done, you say, especially on a tiny little 500 sq. ft. house? No, no it shouldn’t.
The latest episode of Contractor Drama: Life on and Off the Job Site involves his foreman, who periodically turns into a drama queen and decides he’s underpaid or that he’s too skilled to do work like sanding sheetrock. Contractor finally had enough of it and told him to take his tools and leave, foreman yelled some (then cried, begging for his job back), then finally stormed off, taking his father-in-law with him (who was also working on this job for our contractor). Foreman then showed up the next morning and loaded up all the tools on the job site, apparently in an attempt to force our contractor into giving him his job back.
So a four man crew became a two man crew, including our contractor, and he’s been occupied trying to sort out all of the above, as it’s to the point where he’s going to have to call the cops and pres charges to get his tools back. I’ve been pitching in wherever I can, so stuff is getting done, just not as quickly as I’d like. Again, the timeline isn’t critical on this project but I just can’t keep pushing back the completion date.
Moving on to other equally crazy topics, I did manage to pick up the abandoned house next door to the Wee House at the tax deed sale yesterday for $6,770, which will be known as the Crazy Larry House moving forward, for reasons about to be made clear.
I went ahead and had the title work done on it before bidding, just to be safe as far as any liens or potential title issues, since it was owned by an estate and had various city liens on it. While some liens are extinguished by the process, city liens aren’t, so in addition to the $6,770 I have to pay about $400 in city liens for cleaning up trash and securing the property when it was abandoned.
As far as the house itself, it’s a 815 sq. ft. house built in 1910, on a .25 acre lot. It’s an odd structure, as it’s basically two houses that were connected at some point in time. There’s only one kitchen and one bathroom, though, so any connective surgery was done a very long time ago and wasn’t a recent Frankensteinian attempt at home improvement. Below are a few photos:
My main motivation in buying it was its proximity to the Wee House, as seen in the last photo. I actually hadn’t been inside the Crazy Larry house before buying it at the auction, but the lot itself is worth $4,000-$5,000, and just scraping the house off the property would probably add $5,000 to the value of the Wee House, so the worst case scenario would mean basically breaking even on buying the Crazy Larry house, but removing the eyesore next door in the process.
Backing up a bit, two days ago a homeless looking guy was hanging around the Crazy Larry house, sitting behind it and drinking beer. We gave him a day to move on, assuming he’d be gone yesterday, but he was still there. While I was off buying the property, our contractor went over to tell him to shove off. I literally was writing a check for the property when our contractor called me, saying that the guy (named Larry) claimed he owned the place, that his grandmother died and left it to him, that he had paperwork to prove everything, that he’d been involved in a court case to get it back (and had just gotten out of jail the day before), yada yada yada.
Sweeeeeeet. So I went over and talked to him, and it became pretty obvious that he was a mess, as far as suffering from some combination of mental illness and/or excessive drug use. Thankfully he was very polite and non-confrontational, and it did turn out that his grandmother had owned the house, and that he grew up there. He kept going on and on about the situation, using made-up legal phrases such as “the county will eminently domainize my holdings, for the recapitulation, but you see the real issue is possession…”, but I finally got him to shut up.
I tried to not be rude about it, but basically told him he had six months to redeem the property if he paid all of the back taxes and penalties, and that I wasn’t going to touch a thing in the house until then. (Which is completely true, as any work on the place will be a complete gut and rehab, and to be safe I’m not going to do a single thing until the six month redemption period has expired.) He claimed he has the money, that the court case was just settled, and that he’ll work it out. I wished him good luck, but told him that he can’t be on the property until then, and that I didn’t want to call the cops but I’d have to do exactly that if I saw him there.
He took all of that well, picked up his stuff, and walked off into the woods. About 15 minutes later four police cars came tearing down the street, and they all hopped out, on high alert, asking “Where’s Larry?” I have no idea who called them, but they fanned out, searched the woods, but ultimately came back empty-handed.
I explained the situation and we talked a bit, and apparently he’s been a thorn in their side for years, as far as being in and out of jail, etc. They encouraged me to fill out the paperwork to serve him with a criminal trespass warning, as they said every time he gets out of jail he shows up at the property, trying to squat there. So I went ahead and did that, and now have a case number to call with if he shows up again.
Fun stuff. His sister showed up later in the day, looking for him, and just shook her head when we told her all that. She confirmed that he’s been struggling with issues for years and years, and that there’s nothing behind any of his claims, that he just seems to think his grandmother left him the house, but that the estate was long settled, that there never was a court case, or anything like that, and that he most definitely doesn’t have any money to redeem the property.
Needless to say, yesterday was a busy day. As far as plans for the Crazy Larry house, well, nothing for the next six months. The odds of anyone redeeming it are pretty miniscule, but there’s no reason to risk it. The interior is really rough so there’s pretty much nothing salvageable other than the basic structure, so I’m fine with letting it sit for now.
When it is time to rehab it, we’re leaning towards trying to buy the vacant lot next door and moving one of the structures (the older, taller one in the photos above with the weathered wood siding) to the adjacent lot, resulting in two small ~400 sq. ft. houses. Then we’d basically gut and renovate each one, producing two simple little 1-1 houses that I’d keep as rentals. Each would rent for around $400/month, and probably appraise at $30,000-$35,000. After factoring in all of the acquisition and rehab costs, I’d probably be into each house for about $20,000.
If you’re thinking that all of this seems like a huge headache for not a tremendous amount of upside, well, you know, you’re probably right. Truth be told, though, I enjoy the challenge of stuff like this, and it’s very low-risk as far as real estate investing goes in uncertain economic times. These little houses most definitely won’t make me rich, but they do offer a chance to build up some equity and learn more about the process as a whole, and help keep my lazy butt in shape as far as doing hands-on work myself when I can get over there.
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