Need To Sell Your House In Little Haiti? We Buy Houses For Cash.

Two frame houses with demolition orders, and a loan already due

A duplex in Little Haiti, which in practice meant two dilapidated frame houses on the one property. Both were carrying demolition orders.

The area has value, and that is worth saying first because it changes what the problem actually was. This was not a property nobody wanted. The land was worth something and the two structures standing on it were finished — and the city had already said so, in writing.

She had inherited the property, and she had inherited a reverse mortgage along with it. When the last borrower on one of those dies, the loan becomes due and payable. It does not turn into an ordinary mortgage with payments to pick up. It is simply due, and a clock starts.

Where there is equity — and here there was — the payoff is the loan balance. The sale clears it and what is left over belongs to the estate. So the equity was real and it was hers. What threatened it was never the appraisal. It was time. Interest accrues. So does the mortgage insurance premium, the servicing fees, the property inspections, the force-placed insurance. Every month the balance climbs against a number that does not, and the surplus at the end of it gets smaller.

The property was not sitting still either. There were squatters in it. The water had never been shut off, so a bill ran the whole time on a building nobody was living in lawfully. And the squatters were taking electricity from the neighbours, which made it the neighbours’ problem as well as hers.

So: two structures under demolition orders, a loan on a clock, a utility account still running, and people in the buildings. Repairing her way out was not a real option, because the city had already ruled on the structures. The only route that ended with money in her hands was a sale — and a sale before the balance ate what was left of it.

We bought it and the loan was cleared at closing, with the surplus going where it was supposed to go. Then the structures came down, which the demolition orders had already required of somebody, and two townhomes went up in their place.

An inherited reverse mortgage is a deadline more than it is a debt. The house is usually worth roughly what it is worth. What decides how much of that anybody actually sees is how quickly it gets dealt with.

A duplex on braces, and an owner who decided to stop

A duplex in Little Haiti, vacant, standing on braces — shoring run through the structure to hold it up while it waited for work that had stopped.

The seller was an investor, and one we had closed with before. That is worth saying, because it is not the usual shape of these. Nobody had died. Nobody was behind on anything. Nobody was in trouble. He had taken on more than he could carry at one time, and this was the building that ended up waiting.

A project on braces does not wait quietly. It was vacant, and a vacant building in that condition gets visited — it was being vandalised. Every month it sat it cost money and returned nothing, and it was drawing attention away from the jobs that were actually moving.

So he made the decision that people who do this for a living make, and that people doing it for the first time usually cannot. He stopped. Not because the building was impossible, but because finishing it properly needed capacity he did not have while his other properties needed him. His own phrase for carrying on was throwing good money after bad.

We bought it and took the project on. That is the entire transaction. There is no distress in it and nobody was rescued.

It is worth knowing this happens, because the assumption is that the only reason to sell a half-finished building is failure. Usually it is arithmetic. You have three projects and the capacity for two, and the right answer is to hand one to somebody who can finish it rather than run all three badly and finish none.

He knew exactly what he was selling and we knew exactly what we were buying, which is what it is like when the same two people have closed together before. That conversation took a fraction of the time the first one did.

A hard money loan two years old, and a project that was not finished

A wood frame house in Little Haiti with in-law quarters in the back yard, and a foreclosure coming.

The owner was not a homeowner who had fallen behind. He was an investor, and the unfinished project was his own. That is worth saying plainly on a page about foreclosure, because the word brings one picture to mind and the reality covers several. A good number of foreclosures are somebody’s renovation that ran out of road.

The lender was a hard money lender in first position, and the loan had been out for two years. Hard money is not built for two years. It is short term money, priced as short term money, and the exit is always the same one: finish the work, then refinance into a longer term loan on better terms, or sell.

He never reached the refinance. You do not refinance an unfinished house — a longer term lender wants a finished property to lend against, so the better loan that was supposed to replace the expensive one stays out of reach until the work is done. And when it is still sitting there at the two year mark, the cost of carrying it has been running every month the whole time.

He had run out of funds and he had run out of time. Those two normally arrive together — the money runs down, the schedule slips because the money ran down, and then the loan comes due against a house that is not finished and so cannot be sold or financed like a finished one. There is no version of that which resolves itself quietly.

We bought it and finished the project. Everything new, and everything permitted.

That second word is the one that matters. An unfinished renovation can be completed cheaply and quietly, or it can be completed on the record with inspections. The second costs more and takes longer and is the only version that leaves a property somebody else can buy, insure or borrow against later.

The in-law quarters at the back are the second unit now. The property is a duplex, properly and on paper, rather than a house with something behind it that everybody agrees not to ask about.

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