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Why a Landlord Will Never Rehab a Severely Distressed Home Again

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  • Tom Brickman, 40, is a real estate investor who works with many fixer uppers.
  • His biggest job was cleaning a four-bedroom home for someone with a hoarding disorder.
  • He made a profit of $100,000 and will never do it again because of how exhausting and risky the job was.

While value-add investors may fantasize about distressed property deals and head-to-toe revitalizations to make huge profits, Tom Brickmana real estate investor who rebuilt a house that was in great turmoil and disrepair in 2020, it’s a massive undertaking and not for the faint of heart.

“This is not for first-time homebuyers,” Brickman told the insider adamantly about undertaking such a project.

Brickman said that when he bought a four-bedroom brick home in Arlington, Texas, the owner owed $140,000 for the land and was completely uninhabitable. To buy it, Brickman borrowed his $50,000 from his grandparents and then asked SoFi to take out an additional personal loan because he couldn’t get a conventional mortgage after the property’s appraisal.

“I couldn’t even get into the door at first,” Brickman said, adding that there was a large hole in the roof through which the squirrels would crawl to get into the house.

After spending $140,000 to purchase the house in May 2020, Brickman spent the next few months making it livable, ultimately costing him another $80,000. But in the end, the value of the house nearly rose to $425,000 for him.

“My husband and I feel like we earned every penny of that $100,000,” Brickman said.

He added that this is the most financially successful investment he has made in the last 18 years of buying properties and renovating homes. However, he told his Insider he would never do this again for his three big reasons:

The process is hard and you have to do a lot of the work yourself to stay profitable

Brickman emphasized that anyone doing this type of work should have experience in home renovation and be prepared to put a lot of effort into it.

Brickman said the first thing he did was take 11 trash cans and a snow shovel to remove all items from the house.

He said he started with a 20-yard trash can and ended up renting a 40-yard trash can to get the job done.

“I’ve gotten trash cans before, but I didn’t even clean out the foyer (only eight feet of space). That 20-yard trash bin was completely full,” Brickman said. .

The 40-yard trash can that Brickman ended up using was so large that the city complained that it could not be sized within city limits. be fined.

“It was very draining,” Brickman said, adding that his days of cleaning the house began at 7:30 a.m. and ended at 1 p.m. There was no water or electricity in the house, so I had to wash the dishes. ”

Once the house was empty, the next step was to restore the lights and water that had been turned off since 2015. I also had to replace all the ducts in the house due to small animals running around for years.

The next repair was the air conditioner, which Brickman said was the second most expensive item in the house after roof repairs. But once the air conditioning was working again and electricity and running water were available, he was able to get workers in there and start other work.

The next thing I had to do was reseal all the floors and install new sheetrock. In addition, Brickman had to hire two landscapers to get rid of all the weeds in his garden. He then installed cabinets and countertops and repaired the home’s sprinkler system.

He said a hole in the roof had been covered while they were working on the house, but replacing the roof was one of the last things they did, and it cost about $10,000 to replace it. It took.

It’s very emotionally draining and sometimes dangerous

It wasn’t just that the work was strenuous. Brickman also stressed that clearing the homes of people with hoarding disorders is very emotionally draining.

He shared with the insider that he personally knew the person who bought the house, and that the hoarding began after the person who owned the house lost his wife and another loved one within a short period of time. By the time he sold the house to Brickman, he was unable to pay and was unable to live in the house.

“It was like uncovering layer after layer of someone’s life,” Brickman said, adding that even if you didn’t know someone who suffered from the disorder personally, it’s very difficult to do. added that it was

“You can see someone’s grief and sickness that you can’t touch just by buying a normal home,” Brickman said. “I wasn’t ready for that.”

In addition to having experience restoring worn-out homes, investors should keep in mind what their thresholds are for the emotional side of cleaning out homes of this nature, he said. I emphasized that there is

“You have to be able to take the emotional side out of it,” Brickman said.

Buying a large project may not be economically worthwhile if the value of your home is high

One thing that really surprised Brickman after buying the house was how much other investors wanted it. He said prospective buyers have even come to his house and asked him for it.

“It really blew us away,” Brickman said, referring to himself and his husband.

Since completing the home and putting it online, Brickman has received offers from wholesalers for other poor properties, but he says he’s not interested, especially when prices range from $180,000 to sometimes over $200,000. Stated.

“Oh my god, that’s $80,000 more than I paid and it looks just as bad,” said Brickman. I don’t know how wrong I am until now.”

Brickman knows many investors who tried to take on hoarded homes that made a lot of money from the property but were unable to do so, eventually losing the property entirely.

“When this is being glamorized on HGTV, there’s a lot that doesn’t get shown,” he said.

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