(Names have been changed to protect the innocent and the stupid). In 1997 I was driving around looking at houses. The maximum amount I qualified for was around 200K for a multi family unit. I found an old Victorian painted white with blue trim on the corner of Summer St. and Winter St. It was facing Summer St. and appeared to be built around the turn of the century and converted to a multi unit. The For Sale sign was on the corner near the sidewalk. I called my agent Belinda and asked about it. Belinda said it was not listed in my price range.
I said to raise my limit up to 500K to find out how much they wanted and still it was not listed. I said well raise it again, because I did not believe it was really that high. It still did not show up under all listings less than 1 million. Belinda checked and nothing was for sale either direction on the street for several blocks. Since the average house was around $175k I wanted to see a house in this community selling for more than 1 million even if I could not afford it. Belinda called the listing agent (Tammy) on the sign, as it turns out it was a 4-plex, asking price of $225k and sold “as is”. It had been on the market for more than a year. I thought something is wrong and it seemed a little small but it could be a 4-plex, there were 4 doors. We set up a time to view it.
The day arrived I got there first and was just walking around the house on the sidewalk. I noticed that on the side of the garage the neighbor on Winter St. had attached a covered carport to it and partially behind it. I though to myself somebody has to give up some space. Belinda and I inspected the Victorian. It was only a triplex not a 4plex as listed. We checked again, it listed with 4 rents, but there were only 3 units in the building. We called to get in touch with Tammy and looked around again. Tammy called back we asked about why it was listed as a 4-plex when there were clearly only 3 units in the house. Tammy replied saying that you get the house behind it also. We said “which house, there is no room for another house”? Tammy replied again with “the small stucco green house”. Belinda and I looked and saw the green house on Winter St. which had 1942 in the concrete. This is the same one with the carport. It also has a sign in front and also listed by Tammy. Belinda and I looked at the MLS cut sheet and sure enough the address at the top was listed as 123 Winter St. Belinda called Tammy to verify that you got the Victorian on Summer St. AND the small green single dwelling on Winter St. Tammy said that “yes, you get both”. I had Belinda make an offer of $200k.
A few days later the seller countered with $220k. I called my mortgage broker; she said I could maybe make it to $210k. I relayed that Belinda and to counter and say that $210k was all I could afford and try to convince the sellers to accept my offer as it had been on the market for a very long time. They agreed.
Now Onto the Escrow
Funding required the normal inspections. The sellers had a good contractor they wanted to inspect and do any repairs. I was OK with that only because I've been in construction for 20+ years and already knew the conditions. Goofup Contracting said there was $15k worth of repairs. Sellers signed off and said “do all needed items”. Along the way it was found out that an additional $14k was needed. The sellers had to bite the loss; they agreed to do all the items. Finally I got the property in my name.
And Now For The Rest Of The Story
In 1890 the Victorian was built facing Summer St. Sometime between 1890 and 1942 Summer St was reclassified as a commercial street. In 1942 Work Project Administration built the small green house. The parcel address changed from Summer St. to Winter St. 150′ of residential street is less expensive than 50′ of commercial. When the long time owner died title was transferred to 4 descendants who decided to sell the house. The executor was an attorney by trade as such was the lead person. They contacted Tammy and to sell the property. Tammy put it in the MLS at $360k as a 4plex put the address as 123 Winter St. A sign was placed in the front yards of both buildings.
Time went on and the price was reduced several times withvery little bites. As it turns out, if you went to the MLS for multi units Winter St. would show up, you drove by and found this small green house, obviously it was not a 4-plex, not nearly worth $360k.and thought is was a misprint. If you drove by saw the sign and asked about Summer St., it would not show up figuring it was out of their pricing, they left. Nowhere on the MLS sheet did it mention that you got 2 buildings, that the other building was facing a different street or anything like this. The fact that they looked different, style, color, age, exterior coverings you would never expect them to be sold as a single parcel. Even people who lived in the neighborhood did not know they were together; some had even looked into it.
In the end perseverance and questioning any thing that was out of normal and did not make sense paid off. I got a property worth about $330k for $210k. Remember, that of that $210 I got $19k on repairs that the sellers did not want to do. I took my $100k equity, remodeled and repaired all defects, refinanced, leveraged, paid off another property and bought 10 acres of vacant land.
San Leandro, CA
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