How We Bought A $50K Duplex – Part 3

Getting Serious, Making Offers, and Getting Screwed

As summer 2010 was waning, and snowbird season approached, we had been searching for months. And if you saw some of the previous posts, you have a pretty good idea of some of the wrecks that we were looking at. Needless to say, we were feeling like we had gone on a lot of first dates but not yet found a property we thought we could “take home to meet the family”.

But then several of them came up all at once that we got pretty serious about…

A Love Story?

We expanded our search to include neighborhoods that were just a bit further out just to see if there was anything great just outside of our search. Right around that time, a duplex came up in an interesting area. Near a pretty affluent area of town, there were a couple of blocks that were filled with duplexes, and one came on the market for $56K. It was near the upper end of our range, but it was in pretty solid shape. There was no “mild fire damage”, squatters, and the kitchen cabinetry and all the flooring seemed relatively intact.

It had the normal issues like… a toilet in the tub!

Where else would you put a toilet if not in the tub?


Hideous light fixtures…

Classy, eh?

And deferred maintenance on some leaking pipes under the sinks…

Looks awful, but actually pretty easy to fix!

But really, none of these problems were anything that we couldn’t address. So even though it was on the high end of what we were looking to pay, since there seemed to be less to repair, we made an offer for the full asking price of $56K.

We actually thought we had a shot at this one, too. There was a deed covenant in the neighborhood that actually worked in our favor. This deed covenant stated that the house could not be listed for sale twice within 90 days. In our minds, that meant flippers wouldn’t really be interested in it because they’d be required to hold it much longer than it would take them to make the repairs. “Truly,” I thought, “this was a match made in heaven.”

But we got burned. Before our realtor even got news that we were outbid, Mr. PoP got an email from a local real estate investor known for flipping houses. He was offering a great duplex for just $89K! It was the duplex we were waiting for a response on. Grrr!

A lot of good the deed covenant did us, huh? We had our realtor complain to the seller’s agent on our behalf, that the buyer was violating the deed covenant. In her words, “not my problem”. We were tempted to report the seller and the buyer to the better business bureau, but it wouldn’t have mattered. Our bid wasn’t even 2nd highest.

A few weeks later, though, I spotted an article in the WSJ about scandals involving the banks and how paperwork was being “robo-signed”. The seller of this duplex was implicated, so I felt there was some karmic justice. But I didn’t know how it would affect us again!


We Wanted To Dance, But The Bank Just Wasn’t Quite Ready

Luckily another good duplex came up just a couple weeks later. Turns out it was our “dream duplex”. It was in our preferred neighborhood, about 25 minutes away from our house. They were asking $49K, and the place was in pretty good shape.
Sure, it wasn’t perfect – heck one side stank of cat pee and had walls that were painted brown, green and yellow!

This room had walls that were brown, green, and yellow. Awesome, huh?

But the other side of the duplex had some recent improvements, and you could imagine how the place would clean up with the high ceilings!

High ceilings, and one side of the duplex had work that had been started which was of decent quality!

And there was the requisite hole punched through drywall. It just wouldn’t have been a Florida foreclosure without it!

Requisite random hole in the wall so commonly seen in Florida foreclosures…

So we offered just over the asking price – $50K. And sat back to wait. When we didn’t hear anything after about a week, our realtor started pestering the listing agent for details.

Now remember that news article I saw about the seller of the previous duplex being sued that I thought was such wonderful karmic justice on the last place? Here’s where it came back to bite us in the butt.

Turns out that was basically the first domino to fall in what would become known as the “robo-signing controversy“. Basically the banks were starting to get hammered because they had foreclosed on some places too quickly and the paperwork hadn’t actually been read before it was signed. (The wikipedia link has more info if you want more details!) To the banks, this was a big freakin’ deal.

What did this mean to us? Well… our “dream duplex” got pulled from the market “temporarily”. And we sat and waited for a month until it was relisted at the beginning of November. But by then we had competition, so we had to wait some more. Which we did.

We got preliminary hints that our offer was accepted the week before Thanksgiving, but everything seemed to take FOREVER, and we were losing faith that this one would actually get to closing with a clear title. So we kept looking…


Holy Illegal Construction, Batman!

On Thanksgiving day another duplex was listed that was just one block over from the “dream duplex” we were waiting on. So on Black Friday I popped over with the in-laws to take a look. The original construction was set up a lot like the “dream duplex”, but a LOT had gone on since the original construction.

There was a back patio that had been entirely enclosed and stucco-ed in, creating an additional “bedroom” off of the living room. The main problem I could see immediately with this was that this “bedroom” had no ventilation. It was totally not safe, and definitely not to code. This was a big deal since there would be no hiding it if/when the county property appraiser came out to revalue it. The area that was supposed to be a small screened in patio was completed enclosed in grey stucco.

But we knew the neighborhood, and the rest of its issues were no worse than any other, so we put in an offer below asking to account for removing the new exterior walls, fixing the stucco, and re-screening the bedroom/patio. We offered $44K – they were asking $47K. And we waited some more.


As December started, we were still waiting on formal paperwork from the “dream duplex”, so we kept this one in play. Then on Friday December 10, we had a decision to make. At lunchtime, our realtor received a fax. Turns out the seller knew that this duplex had some illegal construction, and as it turns out, the county had already levied some fees against the property. The seller believed that the fees could be “mitigated” (realtor-speak for reduced) by negotiating with the county, but didn’t want to do that themselves. They wanted the buyer to take on the responsibilities of the fee mitigation on their own after close.

Here’s the relevant portion of the fax. We received it around noon and had 3 hours to decide.

We had about 3 hours to decide if we wanted to continue to play the game on this one or to walk away…

Our realtor was asking what we wanted to do about it, and I said, “Well that depends – what are the fees!?!” She said she’d find out and called back a few minutes later with the answer.

So what were the fees that the county had levied on this duplex that was currently for sale for $47K? $128K.

I’m not even kidding. There were $128K worth of fines and fees attached to a $47K duplex. But, the realtor was sure that the county would work with us to get the fees reduced, err… mitigated, especially since we were already planning on reversing the illegal construction.

So what did we want to do?

  • Tell the seller that our offer included buyer responsiblity for fee mitigation of $128K of fees on a $47K duplex?
  • Or… forget about that duplex and hold our breath hoping that the “dream duplex” (which was taking FOREVER!) would actually close with a clear title?
Stay tuned for the big denouement when we reveal what we decided and show pics of our duplex in Part 4 – Like It Was Meant To Be, Our Duplex.


If you need to catch up on any of the other posts in the multi-parter, here are the links!


21 comments to How We Bought A $50K Duplex – Part 3

  • Wow. We wouldn’t be able to find even a trailor for under $50K in Vancouver let alone a duplex. Impressive! Even if it does have a slew of problems.

    • In 2005, the same could have been said about this area – but when the housing market crashed in the US, we had front row seats to some of the worst of it. And an amazing opportunity if we felt we could take on the risk.

  • $128K in fees! That’s nuts!!
    Plus I’m with Daisy… you can’t even buy a trailer where I live for 50K, haha. About two years ago I actually looked at one that literally had holes through the floors and it was $68K and in a park, so you didn’t own the land.

    • $128k in fees was insane, but the county knew a “resident” wouldn’t pay them. After a while in the housing crisis, local governments got sick of the banks not maintaining properties (hence allowing for squatters, etc) and not paying taxes or HOA feed and starting issuing punitive fees on bank owned real estate. It was vindictive on the part of local govts, but they felt they were up a creek without a paddle! Can you blame them?

  • I’m glad this wasn’t your primary residence you were trying to buy or you would have pulled out your hair. I also think it should just be standard to put the toilet in the tub for renters. Then the missed opportunities could just wash down the tub and you wouldn’t have to clean the floor. You also could take care of two things at once and have lots more free time.

    • Haha, our primary residence wasn’t quite as bad, but it was a foreclosure, too. You wouldn’t believe some of the crazy stuff that we did OURSELVES. Like replace the wooden siding on the entire house with just our four arms. Have you ever lifted a 4×8 sheet of plywood up on to scaffolding to get it lined up and nailed in 8 feet above the ground? It’s freakin’ heavy! I’m sure at some point we’ll do some pics of the craziness that our house was, too. =)

      As for the toilet in the tub – I hadn’t thought about it that way but you’re totally right. We keep the kitty litter box in the spare bathroom shower so if Kitty PoP misses (he doesn’t – thank god!) clean up would be a breeze. And what is dealing with renters if not herding cats? jk!

  • Wow pretty crazy. It seems like you were just hitting one road block after another. Sounds just like us buying our first home. Glad to know it finally worked out for you. Can’t wait to find out how and see the pictures!

    • For a while it felt like one of those “pick two of the three” jokes. We could have any two of: a good price, no structural problems, and a good neighborhood. But yes, it did finally work out =)

  • […] How We Bought A $50K Duplex – Part 3    How We Bought A $50K Duplex – Part 1 […]

  • […] Part 3 – Getting Serious, Making Offers, and Getting Screwed […]

  • I admire your persistence in jumping through so many hoops.

    I appreciated that picture of the requisite hole punched through dry wall. It has been the same in every repossessed house that I have purchased too. They always have either a hole punched through the drywall, or a hole punched through a door, or both.

    I look forward to the next installment of this intriguing tale!

    • Yeah – I think the holes in the walls are often one last “f*** you” to the banks that are foreclosing on the house. Though this one, we were told, was actually done after the bank took it over because it wasn’t properly secured. The sliding doors didn’t lock on one side and the neighborhood kids would go in there to drink beer and eat oranges off the tree in the backyard. The theory is that they did it, but we’ll never know.

  • Oh. My. Lord. Not only were the pictures hilarious, but the price tag with fees almost made me fall out of my chair!!!! OH MY GOSH. I would have died had they given me that number when I was expecting something in the double, NOT triple digits! Yikes!

    But toilet in the bathtub, lol.

    • Yeah, I’m not sure what I was expecting in terms of the fees – but I guess I initially assumed it couldn’t be that high since they sent this fax like it was a quick, “just sign this in the next couple of hours”, no biggie thing. I think my jaw hit the keyboard at my desk when I heard “$128K” come out of our realtor’s mouth.

  • I love the light fixtures! haha Love how they put the same light on every other one.

    • Yeah, some of the “design choices” in these places were priceless. Were they overdosing on episodes of “Trading Spaces” and just getting confused with implementation?

  • CF

    Oh my gosh… those light fixtures are terrible! Haha. The first condo we bought had beautifully done dark wood kitchen counters, cupboards, nice laminate flooring in the living area, etc… and pink tiles in the kitchen. Pink. And… gold fixtures in the bathroom tub. :S Every house has something!

    • NICE! I lived in a rental unit once that had VERY pink tile all over the bathroom walls. I would love to do that in our bathroom here, though I think I’d have to lie to Mr. PoP and tell him it’s beige. He can’t see pink because he’s colorblind!

  • Wow thanks for such a detailed story haha! Seems like these places are some real fixer uppers. I can’t believe a place could have 128k in fees, that’s crazy

    • Yeah – it was nuts. Some day I might be curious enough to know what the buyer actually negotiated them down to, but haven’t had the motivation to dig through public records.

  • […] Part 3 – Getting Serious, Making Offers, and Getting Screwed […]