No indoor plumbing, no power, no heat; a couch, a plywood table, and a laptop. My last day in the Army was January 4, 2006 and this is how I was living on January 5-- and I was pretty excited about it.
I had gotten off the plane back from Iraq almost a year earlier, and even before that I had planned and thought about two goals for months (years) that I wanted to do after my Army time ran out: go to school for chemical engineering, and flip a couple of houses. During that year I spent almost all my nights and weekends on real estate: driving for dollars, putting up bandit signs, hand addressing envelopes, mailing letters. All activities learned by listening to real estate guru CDs I got cheap off the internet.
One evening after work in 2005, I found my way up to Waco, Texas, which was a town hitting rock bottom at the time. What I noticed was a super abundance of old dilapidated houses. As I made my way up and down the streets, I took photos with my Cannon DSLR and wrote down the addresses; it was going to take weeks of work to send out letters to all the owners.
Fast foward a couple of months and I was sitting at the closing table at Home Abstract in Waco across from a local realtor (Mike) who was about to take my $35,000 cash and sign the deed to a huge (comparitively speaking) 1700 square foot, 1920 built, unoccupied but much adorned by graffiti inside and out, crack house on the north side of town. I knew nothing about renovations. I owned zero tools. I had no experience with contractors. I lived 70 miles away and had a job that paid $25,000 a year (Army) and frequently demanded that I work 24 hours a day. Here I was buying a property in one of the most economically depressed and crime ridden cities in Texas-- a property that also happened to be tagged for demolition by the city.
Turns out in hindsight that my timing was pretty good, if not my level of knowledge or execution. That year was the peak of the subprime bubble. I would find out later that selling any borderline livable house was as easy as throwing up a sign and sending anybody who wanted it to a mortgage broker-- two weeks later I'd be at the closing table picking up a check. But those deals were still in my future. For this one -- my first -- I had that small matter of the house being condemned. I needed to renovate it, and before that I needed a contractor, before that I needed a temporary power pole, before that I needed a building permit, before that I needed to get the red tag (must demolish) converted to a green tag (must repair).
One night in fall 2005, I found myself in an auditorium in Waco standing in front of the six (or was it 10?) member building standards board, where they met every couple of months to go over the city's Tagged Structures List, a document which might have rivaled the U.S. tax code in length. Most of the owners of these properties never turn up at the hearings, so I was something of a novelty. They treated me with friendly bemusement at first, and then seemed mildly impressed when I handed out my rough plan and budget typed up in Microsoft Word (I brought a copy for each member). Getting the green tag turned out to be a layup-- the City of Waco, despite being in many ways your typical bureaucratic government entity, also seems to really care about making the city a better place, and when it comes to getting things done for citizens who are trying to help that along, they keep the red tape to a minimum. At least, that's been my experience over the years.
The next steps after that were all one continuous nightmare. Partly because of my own inexperience and lack of knowledge; partly because of lazy (but not dumb) "contractors" willing to take a golden opportunity to separate a rube from his savings. Lots of after-work and weekend trips to Waco to check on progress and not seeing any; lots of phone calls telling guys what I wanted to see progress on; lots of times handyman / contractors who would produce the faintest whiff of progress-- maybe one honest day's work-- enough to make me drive up from Hood, pull out the check book, my hopes momentarily raised, and then on the drive back get that nagging feeling that the next trip would be one of those were I'd get stood up and not see any change. That's what the rest of Fall 2005 amounted to.
With January rolling around and my short timer status at an end, I was set to start community college in a few days. I loaded up all the rest of my clothes and junk into a 96 Nissan and headed up to the still-condemned "monstrosity" house. It wouldn't be that bad. Texas winters are notoriously mild (at least until 2021), I could run an extension cord for lights and a microwave, and I would load up on 5-gal water jugs. I spent the first day raking my back yard. Reveling in the glorious civilian-ness of it all.
I actually began working on the plumbing by myself before and after classes. It didn't go well. Turns out gluing PVC is a little tricky. There were a lot of trips to Lowes with me saying "hey I bought the wrong fitting" and some dubious customer service lady looking at me suspiciously saying she'd take it back this once. Note to self-- Home Depot is a lot easier about returns.
Sometime around February or March I came across a guy name of Chuck White who had returned to Waco after living in Alaska for several years. The first good -- nah VERY good handyman / contractor I found. The guy was meticulous. He should have been a journeyman carpenter working on million dollar homes, not bothering with my penny pinching, not quite broke but not quite well funded, zero knowledge self. For some reason, he kept working for me over several houses until I left for Austin. Tragically he was killed in a home invasion robbery in Waco in 2008. Remember that thing about it being crime ridden?
Chuck was a miracle worker, because he knew electricians and plumbers who would pull a permit, but allow him to glue the pipes and run the wires himself. This meant that I paid about half of full fair for the trades work-- which meant I was not going to have to starve just yet, and I could finish the project. Chuck may have actually starved a little, or at least gotten behind on his car note, for which I still feel like shit to this day. Maybe I learned something though. Ask me today about ideas on how to find and keep good workers.
I've got some receipts from this time showing carpet was installed in late March and the roof was replaced in late May. That's another dumb thing I did -- if you have to patch the roof, you probably need to replace it! I was renovating this house from the inside out and rain apparently was still leaking in.
By the time the house was done around April-May 2006, the economy wouldn't hit full crisis mode for another couple of years, but it was abundantly clear that the subprime boom times were history. Whenever I would send over an app to the mortgage broker from one of my totally unqualified buyers, they would actually come back and reject it! That or else tell me they needed an extra $500 a month in mortgage insurance to get approved. I was stuck with this house (and a couple others).
The only option I had left was to either rent it or sell it on "owner financing", which is what I did but that is a story for another day. Let's just say I knew just as much about screening tenants/buyers as I did about rehabbing houses.
