Monday, June 9, 2014

This IS WAR!!!

In scouring the internet for available homes built in the 1800's, I found this beauty:

But there were two issues: 1) This was the only available photo of the house online, and 2) it was listed on a live auction site and the bidding period was going to be over in 24 hours.  I did all of my due diligence on the property, crunched numbers, tried to figure out the maximum amount it would cost to restore the property assuming it needed every single possible issue dealt with, as well as what my max purchase price would be while entertaining the worst possible scenario when dealing with restoring an old home.  But I rely on facts, not assumptions, and I really needed to get inside of the property to see how bad the interior was.  It had been sitting for quite some time (over a year, if I remember correctly), and I just wasn't willing to risk anything based on assumptions, especially considering that this house was well over 5,000 sf and that I had no idea about the neighborhood, much less the city that the neighborhood was in.  But I was in Denver, so I put some calls out.

One realtor called me back.  I explained the ridiculous time constraint, she did some research, emailed me everything she found on the property, and the next morning sent me a text stating that she was going to visit the property and take photos of the interior.  I didn't even have to ask!  A few hours later I received over 50 photos of the inside, as well as explanations of what was going on in each photo.  While whoever lived here previously was one of the most gaudy decorators I have ever encountered (lime green, gold, black.... really??), the potential was easy to see... if I could manage to lighten the place up without altering the exquisite wood that covered the main areas of the main floor.

When my realtor and I finally got on the phone, she was so excited to talk about everything going on with the property.  She told me that the place was completely unsecured, and quite a few people were inside assessing it as well, and since she knew that was probably going to be the case she had made sure to take her gun with her.  I almost couldn't hold back the laughter... my realtor was a bad-ass with a gun, and not afraid to use it!  She was officially the realtor I had been searching for for years!

Per her advice and having a much greater sense of how much time, energy, and money it would cost to bring this grand old house back to livable state, I signed up on the auction site and placed my first bid.  And things were quiet for a couple of hours.  That is, until about 30 minutes before the auction was over.  Suddenly I was at my max purchase budget, which left me with two choices: Either accept it and move on, or call my investor.  Of course I called my investor... This house was just too beautiful!

In about five minutes he had every single bit of information I could give, and since I really wanted to work on this property and the numbers more than made sense, he told me to keep bidding the smallest possible increment until I reached my next max.  So I did.  And my next max came pretty quickly.  Investor texted a few minutes later, I told him that the highest bid was currently 10K over my max, and we got back on the phone to discuss what the next move was.  With about a minute left, I placed another bid.

The unfortunate thing about this particular site is that every time someone bids within the final fifteen minutes of an auction, the clock tacks on an additional 15 minutes.  So, while this auction (and the stress that went with it) were supposed to be over at 9pm, it dragged on for two more hours.  But damn, was it an experience!

I've only played poker a couple of times and have yet to do any of the high-energy gambling that I've seen in movies.  But what I thought was going to be some simple bidding turned into what felt exactly like that high-energy gambling.  And gambling, it was!  Fact of the matter was that we were raising our purchase budget to nearly twice the original on a property that I only had pictures of in a city that Investor had visited once or twice... twenty years ago.  And we all know how much can change in twenty years.  But the bidding was insane!  He was dead set against losing this house, and with every bid we started crunching new numbers.

Him: Raise it 1000!
Me: But what if I'm wrong?!
Him: You're not wrong!  These numbers make sense!  The other bidder raised it?... Raise him 5000!!
Me: What?! **raise 5000 while sweating** BUT WHAT IF I'M WRONG??!?!

For two hours, it was an all-out bidding war.  Finally, at double the reserve price and the cost to purchase the house plus estimated restoration costs being nearly 3 times what my original budget was, I told him I could no longer make the numbers make sense without my having at least visited the neighborhood, because on an investment as large as this, the neighborhood is just as important as the house.  So we gave up on the house.

I had been in constant communication with my realtor via text and email while on the phone with Investor, and when the war was finally over, the three of us were beyond disappointed.  But it was late, we said our goodbyes, and dealt with the crushing feeling of failure that now over-rode the adrenaline rush of the bidding.  I woke up the next morning and looked at the other available properties in that city, and, happy with what I saw, planned to visit while on the pending road trip to Atlanta.

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