I am not one to take advantage of the misfortunes of others, but there are times when people walk away from an investment, and banks and local governments intercede to take over ownership of properties.
Such was the case recently, once again, where I was notified that a house right next to one that I already own as an investment property was coming up for auction on a tax sale. The previous owners had disappeared and the county would accept a rather token offer plus back taxes and fees to dispose of the property.
I had been reading in the local newspaper and seeing spots on TV news that such “hot properties” were becoming involved in bidding wars, and like the hyperescalation of the housing market we observed in 2007, that investors and first-time buyers were competing with one another to bid at such auctions to acquire properties.
Because this house was right next to one that I already own, I was interested in it. Especially because there was great value at a very reasonable cost. I found a way to inspect it, and it had “very good bones.” While it was built in 1946, apparently someone along the way updated some of its features, plumbing, and electrical systems. It needs to have air conditioning installed (I can’t imagine how a house of that size in this area could still not have central A/C).
When the auction for this house was held, I expected to see a crowd, or throng, of investment bidders. I was very surprised that there were only two others going for this property. They didn’t know what they were doing. I only had to bid US$100 more than they did, and I won, upon presentation of a substantial cashier’s check. Of course, I had the “privilege” of going to the bank and drawing a cashier’s check for the remaining balance the same day. But it’s done, and the deed is now in my name! Oh boy! The house is in an established, livable, walkable, safe neighborhood. I will have to invest about US$50K to fix it up and bring it to current safety codes and standards, fix the landscaping, repair the driveway, have it sided (removing the crumbling clapboard) and install a new roof, but overall, it is worth it. Its assessed value is more than three times what I have and will put into it.
I have been spending some time going through it from attic to basement, from shed to under the front porch. I have been using an estimating program on my computer to determine just what needs to be done. Now I am determining what repairs I will do myself and what work I need to hire others to do. It’s a balance, but I have outgrown re-roofing houses, thanks. Or chopping out broken cement and replacing it with asphalt. I know how to do the work that is required, but my poor ol’ achin’ body isn’t that interested (or motivated) in doing such physical labor any more. Nor do I have the time to do all those things by myself.
Soon enough, the house will be properly renovated, and I will seek out a deserving servant of our community — law enforcement officer, firefighter, or teacher — and arrange a rental with them. These are the people who rent my other properties. I don’t get market rent, but I get great tenants, along with the good feeling of being able to provide affordable housing to the people who serve our community yet can’t afford to live here.
My partner thought I had lost my mind when I told him about this potential investment. However, once I got into it and we determined that the financial requirements were within our means, I “went for it.” You see, I don’t expect much from Social Security, 401K investments, retirement, or pension plans, so these houses are my “retirement fund.” Hey, if you can do it, do so! Considering the market, now is the time to invest if you can. Housing prices have, in my opinion, hit bottom. That’s why I moved quickly on this purchase.
Life is short: invest wisely!