I learned a valuable lesson on a recent project; as did the seller of the home. I received an inquiry from a woman from Queens NY, part of New York City. She reached out to me because I was on Long Island and she had a house in Greenport NY which needed a lot of TLC.
Many people think that Long Island is smaller than it actually is. I live in the middle of Long Island, and I was actually about 2 hours away from the property. The house was on the extreme eastern end of Suffolk County on the North Fork. Certainly a further distance from most of the projects I managed.
The seller was considering selling the home because she and her family members were no longer using the property and had not been for a few years. She wasn’t maintaining the property consistently and was receiving complaints from neighbors and citations from the town. I was interested mainly because, other than the distance, it met all my criteria for a good project. It was a complete overgrown mess that had numerous possibilities for creating value.
I made the seller an offer that she thought was a little lower than she wanted. She asked me how she could get more money for the house. I told her that there were a few ways that she could improve the potential value to me so that I could increase my offer.
One way was to clean up the yard one more time so that I didn’t have allocate for a large, exterior cleanup. Another way was to correct some of the issues that the town had cited her for related to the structure. The house was not secure and needed to be.
She also had an open permit from many years before that had never been completed and she needed a certificate of occupancy for the detached garage. Because the town had visited the property regarding the complaints, the garage, which no one had noticed for probably twenty years, was now on the radar screen of the town and they wanted the certificate of occupancy to be completed or the garage to be taken down. If the seller dealt with these issues, I could meet the offer she was hoping to get.
Initially, she thought that it would be worthwhile to remedy these items. It would be a one shot trip from Queens to the East End for the cleanup. She could hire an expediter to handle the garage issue. And, her son-in-law could secure the house.
As time passed, however, it became more and more apparent that the difficulty in dealing with these issues was beyond her capabilities. No one from the family wanted to go out there and do the hard work necessary to clean up and secure the house. The expediters she reached out to either did not call her back at all or wanted a small fortune to do the necessary running back and forth to the Town Hall.
As mentioned before, time was passing and the market on the East End of Long Island is much more seasonal than in many other parts of the region. I alerted the seller that if she couldn’t resolve the issues soon, that I couldn’t close with her on the house until the following spring. I could not buy the house, renovate it, sell it and close before the season ended unless we concluded the deal very soon and I could not carry the house through the winter. This prompted the seller to reconsider the additional funds and relieve her of the necessity of doing the things that I would do. We agreed to the original price and terms and set up a date for the closing.
So now I was about to close on the sale of this house that I thought was a great buy for me that was at least an hour and a half away from me and two hours with traffic. I was a little bit low on the number of projects I was working on at the time and thought I would be able to fit in the driving without many problems. I WAS WRONG.
Every time I went to the house it ended up costing me the entire day and I really could not get work done on any of my other projects. The 3 to 4 hours of driving just to get to and from the house left no time during the day to do anything else.
Another factor that I had not weighed carefully enough was the difficulty in finding people to do the work that needed to be done. My usual crews would not go out that far, so I needed me to hire local people to handle all of the work. Of course, not only did I not know any contractors in that area, but because it was an expensive vacation area, the local contractors had an inflated view of what they could and should charge for the necessary contracting work. Homeowners in this area were a captive audience and really did not have much of a choice but to hire the overpriced local labor. I would estimate that the premium being charged by the locals was probably around 15-20% higher than I would be charged for the same work in my immediate, local area.
Another problem I ended up having was hiring an expediter to handle the garage issue. I work with an expediter locally that is very straightforward about how he does business. If he knows his way around a town he will handle the work for me. If he doesn’t know his way around a town he would tell me he couldn’t personally do the work, and he would recommend a good person that could do the work. This always worked out fine before, but this time he didn’t know anybody in the area. This left me in the same unenviable predicament as the seller, having to locate and hire an expediter that would be a complete unknown quantity.
I was beginning to feel frustrated and was starting to think that I had been too smart for my own good. What originally looked like a great project was rapidly becoming a potential nightmare. Time was still passing and now the burden was on me to deal with these long-distance issues.
One afternoon I was discussing the project with my attorney in the hopes that he might have some words of wisdom. Maybe he knew an expediter that I could trust. Maybe he knew another attorney in that area that I could speak to for some contractor referrals. As luck would have it, he ended up doing better than that. He reminded me that a friend of mine from years ago had moved in very close proximity to the house. Back then, this fellow worked with me as a real estate agent, but he had also been a contractor. My attorney said that he had recently represented him on a project very similar to the one I was involved in and maybe I should call him to see if he might be interested in some way in participating in the project.
When I reached out to him, he was thrilled to hear from me. He wasn’t taking outside jobs as a contractor any more. He was essentially in the same business as I am, buying, rehabbing and selling houses, and was looking for projects all the time, primarily out on the East End of Long Island. It turned out to be a match made in Heaven!
After a few discussions about the issues involved, he agreed to become 50/50 partners with me on the project. He put in half the money I had already laid out, agreed to handle the issues with the town himself, and did all of the contracting work at his cost.
It turned out that he was very agreeable to work with and we had none of the typical “partner” issues that might arise. I only had to go out to the project about once per week and made most of the mutual decisions by phone conference. He efficiently completed all of the work to get the house ready for sale in record time. Additionally, his wife had recently become licensed as a real estate agent and was able to handle the local marketing for the house. What a serendipitous discovery!
The project ended up going spectacularly well. I only ended up with half of what I originally planned. But, I could honestly say that I was never happier to reduce my return on my investment for the reduction of work and responsibility that I eliminated. I ended learning a very valuable lesson, as did the seller of this house. If I ever have someone interested in selling a house on the East End of Long Island, I know who I will be calling before I commit to anything.
If you are interested in learning more about the cash home buying process or are ready to talk to Mr. Witt today about selling your home for cash, please give Long Island Cash Home Buyer a call today at (516) 330-6940 or fill out the quick property evaluation form below. We look forward to working with you to sell your Long Island Home quicker than any other alternative!
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- Do I need a real estate agent to sell my house?
- I inherited a house, What to do? Should I rent it or sell it?
- How do I sell a house I inherited – the reality behind probate on Long Island
- Learn about how our process works
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