We were distraught and scrambling for a way to make it all still work. We had signed on a duplex four blocks from the Plaza District, an awesome area in the urban core of Oklahoma City. The closing for our duplex house hack had been pushed back at least 5 days, ad we had strategically organized our calendar to allow for a week and a half of cosmetic fixes on the poorly remodeled before we were to set to move in with our two kids and before closing on the sale of our home.
The not so ideal solution – occupy prior to closing.
Yes, I knew the perils that could come along with it, but it was our last resort so I spoke with the realtor and the seller agreed.
The deal - $50/day rent. High, but $250 was a small price to pay for the ability to start our rehab without kids in the house.
The realtor was set to meet us at the house with the agreement, but en route with our first load the realtor said he couldn’t make it, left the keys in the mailbox, and that’d we just do a verbal agreement. This should have been a HUGE red flag.
That night and the next morning were spent gathering supplies. We had lofty goals to check all kinds of things off the list, but they kept getting pushed back until we had one goal – have our side of the duplex painted. For the next 3 days we repainted the trim, walls and ceiling.
The old adage goes that firefighters routinely clean the fire trucks to inspect for anything wrong with the apparatus. The same can be said of a house when you’re painting it. Holy crap did we imperfections, half assed work, jobs done blatantly wrong, and ones done as cheaply as possible… everywhere. In every room. Mulitple places. “Damn it, Mike!” (the seller) was constantly coming from our mouth.
*I love DIY’ing. It’s a great way to learn a new skill and save money; however, there comes a point when seek out a professional, especially when your “improvements” are not improving the house.
On day four we had a plumber come look at relocating the water heaters from an awkward spot in the kitchen to the attic. While he was there, I had him look at a few other things since the seller had stopped by and mentioned in passing that he had replumbed the house himself. That’s when the costs started adding up just based off what could be seen through a single access hole. The next day slightly lower, but similar costs were estimated my two additional plumbers.
All of the little things in the home inspections that didn’t amount to much were starting to make sense. Small plumbing issues are leading to large plumbing issues. What about the electrical? What more had we missed that would cut into our rehab budget? Everything was snowballing, and we were already questioning our decision. Then day 5 came…
The appraisal, the final piece before closing came in, and I received a call from our loan officer. The realtor and seller failed to disclose that the neighborhood had been rezoned. The duplex had been grandfathered in the new zoning; however, if it were ever catastrophically damaged, it would not be able to be rebuilt as a duplex. Because of this it would be denied when it went to underwriting since we were buying it as an owner occupy conventional mortgage.
A weight was lifted. Even though we’d spent the money for the appraisal, home inspection, termite inspection, paint, and a few things we couldn’t return to Lowes… we knew walking away was the best option. Yes, we lost some money and we’ll have to rent for a while instead of house hacking, but walking away saved us so much more.
I made so many mistakes on this deal because I was driven by emotions and over confident in my abilities. Even though we’ve purchased 3 rentals and our first home over the last 2.5 years, I still have so much more to learn.
What’d I learn?
Pay for trade inspections:
Having a buyer’s agent makes sense:
I’m awful at estimating rehab costs:
Inspect popcorn ceilings thoroughly:
A bad home can become a stressor in a marriage:
Our August was a rollercoaster of emotions, failed plans, and learning experiences, but we are absolutely confident that we are steering in the right direction – this was just a jog in the road.
Would we ever consider an occupy prior to closing agreement again? Probably not with the risks associated; although, it did save our ass this time.