EP 597 – The Hoarder House: An Appointment From Hell

This is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property for pennies on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now, here's your host, CEO of We Close notes, Scott Carson. Good morning, good afternoon, good evening, everybody. Welcome to this episode of the Nope Closure Show. As always, Scott Carson. Excited to be here with you today. And today's episode kind of talked a little bit about one of the deals that I didn't do that has stood out the most in my almost 20 years of real estate experience. And a lot of us go to workshops, we go to seminars. We see pictures of properties that we flipped or the before and the after. We watch HGTV or Extreme Home Makeover. Move that bus, you know what I mean? And so we go like, oh, picking up paint and oh, let's put a red door, you know, let's make it feng shui and landscaping and let's make sure and do all these little things. Staging the house, having the candle that smells like pumpkin pie or chocolate chip cookies to help us move. And that's a great thing. But there has been one quote that was instilled in me early in my real estate career that I heard from a guy that I got a chance to travel the country with and hear him speak almost every other weekend for about two years. And I'm talking about not my buddy Bob Leonard. I heard Bob speak plenty of times. Taught me the open. But I heard a guy by the name of Ron Legrand, I guess you could say the grandfather of real estate, been in for 40 years. Ex auto mechanic and going around doing mortgages for his clients. He used to always talk about how the smell of shit and piss in a house was the smell of money. And that quote has always stuck with me. The smell of shit and piss is the smell of money. And I think about that and when I think about that quote, I have so many memories come rushing back like many people as I started in my real estate career, kind of before I got. Well, definitely before I got in the note business. But as I was learning the note business, learning creative financing, I started marketing, like many people, postcards, bandit signs, yellow letters, and the mortgage company. I talked about this in the previous episode. A little bit of how we found a property in Round Rock with my first rehab. Lessons learned from my first rehab. Well, definitely lessons learned from a hoarding house. This episode is all about it's called the Hoarder House. And let me set the mood here a little bit. It's late October, early November. Ice out. Actually, it was cold in Texas. It had been freezing the last couple nights. And I sent some letters out to people that were World Savings. We did have such a great relationship with World Savings as mortgage can get people to refinance. And I also sent letters out to people facing the foreclosure off of the Roddy list that we had here. The foreclosure listing service many people are familiar with. Not postcards, not yell letters. I literally printed out letters and say, hey, I'd like to help you stay in your house. We have different opportunities. And I said in the previous episode I would put my picture at the bottom. Say, P.S. i put my photo at the bottom. So, you know, I'm a real person with real solutions just in case I had to go meet somebody. Now if we backtrack it a few years when I was in trouble, I always got bombarded with letters from real estate investors when I was facing foreclosure. And I always liked it when they put a picture because then I could identify that person. I could talk with that person. If I had to go meet them at a Starbucks or meet them somewhere, I had a picture. So it wasn't like that nervousness to go to meet somebody. You don't know who you're looking for. Like that blind date without a photo. You don't want that. So lo and behold, I send these letters out and come Sunday night, about 4 o' clock in the afternoon, 5 o', clock, I'm in the house, my phone rings and it pops up on the caller id. Walmart Leander. I'm like, walmart payphone, what the heck? So I answer the phone and this lady's on the other line. She says, this Scott Carson. I'm like, yes, ma', am, it is. Can I have a. I got one of your letters. I'm like, great. They're calling me. Wow. I mean, I'm literally thinking, wow, they called within the first couple days. She goes, yeah, can you come by my house later tonight and talk? I don't have a lot of time here on the payphone, but can you come by the house? I'm like, yeah, yeah, let me get a pen and paper. And so she gave me her address, which is in Leander, Texas. I was living in Round Rock at the time, which is on the north. Leander's on the north side of Austin. And she's like, it's blank. Blink blank. When you come to the address. When you come to the house, when you ring the doorbell, go stand by the garages to the garage door. Don't stand by the door. Go stand by the garage door. I was like, okay. Cause I got a couple dogs. I'm like, oh, okay, I can understand. Ring the doorbell. They go all eight. It's hard to get. Totally makes sense. So I'm all excited, hang up with her. And she's like, I'll see you at like seven o'. Clock. I'm like, perfect. Or six o', clock, I don't know, it's just a couple hours. So I'm like, okay, what do I do? So I get out my checklist, you know, my one page checklist. I pull up the address in the county records to see who the owner's name was. Yes, it matched up who I talked to. Pulled up it was a house. And give you an idea. If you're listening to this, you can't see it, but if you're watching this, you can see this is the picture of the house. This is the actual house. It's a two story, Kaufman Brody built home KB Home. So for those that know, KB Home is a big builder. Square homes, big square footage. This is on over about a half acre backyard I saw because it's at the end of a cul de sac. 5 bedroom, 4 bath, pretty good sized house, 2 car garage in a nice area of North Austin area. So I'm doing its due diligence. I'm like, okay. I can kind of figure out what she owes based on looking at the deed records really fast. I was pretty excited. I'm like, yay, awesome. So I get in my car, go over, it's cold, dressed in jeans and just a regular polo shirt. And I go and ring the doorbell and I hear, I hear several dogs barking like, oh, those are some big dogs. So I go stand by the garage and that is where stuff just got real. All right. So literally suddenly I hear the garage door start to open up. And it's like something out of like a sci fi movie where the door starts to inch up and stuff starts coming out of the bottom. Not quite smoke, not quite fog, like a yellowish tint stuff. And suddenly I get hit by this wave as a garage door opens. Because there's this car, I don't know, this little older, later model. I think it was a Lincoln or something like that or Mercury in there. And on the walls there are all these bookshelves with all these paperback romance novels. I mean, literally, I'm not joking. From like six foot tall bookshelves, paperbacks on the wall. And there is just black trash bags, full trash bags, lining the sides of the garage. Also, where basically you get the car in, there's a path. And that's about it. You can see some other stuff in there. And then this lady who walked out, who's maybe. Maybe four and a half foot tall, not quite that wide, but this little lady comes out and I'm like, okay, all right. And she's like, you, Scott? I'm like, yes, ma'. Am. She goes, you match your photo. Okay, great. And she's talking to me and I'm like, okay, are we gonna go inside? I got four dogs inside. It's cold out. I got. My fence is a hole and I can't let them in the backyard. Cause I run off. And I'm like, oh, okay, fine, we'll talk here for a little bit. She start telling me a little bit about her troubles. And it's cold. And she's like, okay, I'm cold. Let's go inside. And she turns around and she'd been wearing these khaki pants, these khaki, I don't know, not really pants. And they're not like jeans, but, you know, khaki culottes, I guess you could call them. When she turned around, the wind blew and you could see literally that those culottes were split all the way down the middle. Luckily, she was wearing granny panties. So that's how I'm sitting there. Just kind of. I'm like, okay, the stinks. I smell crap. Doesn't smell good. This is going to get interesting. So we walk in the house. As soon as I walk in, I'm hit with this smell again. The smell of piss and excrement. And I sit down and I'm looking around. There's flies everywhere. And the downstairs had just piles of crap everywhere. She's got these two big couches. And she pulls off this big pile of clothes that was on the couch. Looked like it had been there forever. Plops it down, sits down in her chair, and then offers me the couch. Well, as I'm walking around, I'm locking the carpet, my shoes. I can hear a little squish, squish, squish a little bit. Yeah, if you haven't vomited yet. I almost did when I was walking through it. Because as I'm looking around, I see that the bottom, like 18 inches of the wall had a yellow tint to it. And there was a Lot of dog shit. I'm sorry. It wasn't just excrement. It was dog crap, like piles everywhere. And she had four big dogs, like two German shepherds, a lab mix and something else. And they came up to smell me. I'm just kind of sitting there trying to be. Not touch them. And as I see them rolling around and everything and licking each other, and I'm glad. Around the kitchen, I can see all these plates in this thing. She had a big kitchen, nice big cabinets, but there was stuff everywhere. She proceeds to tell me that the water had been turned off at the house for at least four months, so she couldn't wash the dishes. And then she did all this money and several other homes and lost, all because of her bad roommates and drugs and things like that. And that she had warrants out on her for driving without it with an expired license. So she hated the cops there in Leander and Cedar park in the North Austin because she was constantly driving to go get food and stuff like that, but didn't have a license because of parking tickets and speeding tickets and other things. She didn't have a phone on. I mean, she had the power on. It needs some work. And the thing that was the most disgusting thing was seeing these big dogs walking through there doing their business. She's like, yeah, I don't take my dogs outside because I don't want them to run off. I said, well, okay, but don't they have a leash? Well, they're just too strong for me. And I'm like, okay, that's kind of excuse. Get a rope to hold on to the dogs. Not to kill anybody. But I'm sitting there and just the smell of the house, I mean, just stunk. Not as bad as cat piss. I mean, the only thing, it would have been worse. It would have been like five cats running crazy throughout the house, pissing and crapping everywhere. And we all know cat piss is a different type of scent to it. Don't get me wrong, dog piss is bad when it's done, but literally it was horrible, okay? And the worst thing is these dogs are playing around. They're coming up to her and she is literally like, they're kissing her on. They're licking her face. She's kissed. They're kissing on the lips. She's like, you very nasty. I literally almost vomited like two or three times. Luckily I hadn't eaten dinner before coming out or I would have thrown up. And so I'm like, okay, well, I see this stack of postcards on her thing and pack a letter, says, well, why'd you call me? She goes, well, I got your letter about when to refinance. You think I get refinanced? I was like, there's no way in heck you're going to be able to get refinanced. You don't have a job and all that stuff. She's like, okay, well, what can you do? I said, well, honestly, I mean, you probably owe more than the house and it's worth at a time, the market being where it's at, you're going to need some work. I need a lot of work. What about if we can negotiate a short sale and sell the property? She's like, okay, I've got some friends, I could move in, try to get a job. And she said she'd been out of work for like a year and had been trying because she's been living on money or savings and stuff like that. Anyway, had a couple roommates. Like I said, anyway, I'm going to have to take photos of the property. I got to take photos of each room so I can send this in my report to the bank. To send in a short sale, I need to sign off on this authorization, lease information. Sure enough, she did. She was very hesitant to share. And I'm like, listen, I've seen it all. Which was a flat out lie because this is like my first in person appointment off of letters. I mean, literally, I was baptized in the deep end. God threw me into the deep end of real estate. Said, here you go, swim versus gradually being in. And so I pull out my camera and I start taking photos and making sure, hey, here's a big pile of food. Here's the stuff that's sitting there trying to try to take photos. She'd want me going to the bathrooms. And this place had four bathrooms, four toilets. Well, you heard me mention that the bath, the water had been turned off for four months. Okay. She probably hadn't taken a shower. Oh, she said she would go to the YMC to take a shower like once a week. Okay. Her neighbors didn't like her because she was stealing water from them at night to run off, get some water for her dogs or try to bathe in the cold outside. And of course that wasn't happening because it was cold. So anyway, we get to the bathrooms and she's like, I don't really want to show you the bathrooms. Like, I gotta see it. So what she had been doing as when the water ran out, she would use one toilet and couldn't Flush. She would still be using it until all the waste was up at the top. And then she would put the dirty toilet paper in a homer bucket. Yes, a five gallon bucket. So each bathroom was just like, just smelled like a sewer. All right. I wish the photos would have been scratch and sniff. So we went through everything up to get to her master bedroom and there are to go containers all over the place. She had carved out a spot in her king size bed. The dog slept with her at night too. So you could tell dog hair was everywhere. Same thing, dog food. Not the dry kind, but wet kind. Had been spilled over. Just didn't take care of the property at all. So I take these photos and I get in the car and I'm heading home and I call the wife and I say, can you put some soap and shampoo in the garage and a towel and a clean set of clothes? And she's like, yeah, what's going on? And I told her and she's like, oh my gosh. So I literally drove with the windows down just in case the stench that had gotten in my clothes didn't permeate into my trailblazers. I don't know at the time. Get home, go in the garage. I closed the garage, the hose was brought in. I stripped down all my clothes and I literally just throw them all in the trash can. The tennis shoes, luckily they were my best shoes. One of Ronald grand saying was, don't go over in your Sunday best. They'll think that you can pay more for the property. Go over in regular clothes a lot of times. Don't go over in your nice car. Go over your second. Well, we just have the trailblazer. So anyway, I go in there, strip down, throw my clothes away and I proceeded to go to work. And you'd only check your email like once a week at the library. And so it was like touch and go with her. I got whatever documents I could from her. She didn't have a job, bank account, sending World Savings photos. And I went back and forth with World Savings for about six months trying to negotiate a short sale. And they didn't want to budge. They didn't want to budge, they didn't want to budge. And finally after six months, they're like, we're not going to accept a short sale. Just not going to do that. And I think partially it was because she'd been on the hook for a couple of her mortgages and those had gone so called. Finally got her on the phone because we would play phone tag as she would Go to Walmart and make the phone call once a week. Because I didn't want to go back over the house. I mean, I went over the house one time to get some more documents that she had available and that was it. I didn't want to go back inside. We did it outside, but unfortunately could not do it. I learned a lot from that house that I'm not afraid of anything. Now. I grew up in a hardware store. I mean, I've dug septic tanks. I've cleaned out septic tanks in South Texas, been around dairy farms, done a lot, built houses from the ground up before. So I'm not afraid of work. I'm not afraid of a little crap and stench. I've had animals, stuff like that. But look, real estate is not always the perfect everything smells like a roses aspect of things. And anytime I've come across a hoarder house like that, there's a couple things. Something has gone dramatically wrong in that person's life. And you always try to do the best that you could. Now, what eventually ended up happening? Wachovia, or it was actually, sorry, before Wachovia bought World Savings. I got a phone call about two, three months later from the asset manager that held this loan and was looking at somebody, name was Mr. Diaz, Mr. Gonzalez, something like that. I said, no, this is Scott Carson. I was trying to negotiate the shorts. He goes, well, we're trying to track the borrower or the buyer down this property. So when proceed? What do you mean proceed? Well, the borrower, not the buyer, the borrower passed away in the property. So that's an unfortunate situation. You know, we've seen plenty of other deals. I mean, I've walked through hoarded houses in Kansas City that had horrible flea infestations on Shadow Road inventories. I've rehabbed the ugliest and biggest roach infested property in Salt Lake City years ago. So it all started with this. It is not pretty. If I could have made a deal happen, great. But a lot of people were like, if anybody else had gone the first time, it would have probably scared most people off from real estate. And I have to thank Mr. Ron LeGrand for that smoke, because that was the thing that stuck through my head the entire time. The smell of shit and piss is the smell of money. If you can make it work. This one didn't make it work. But I learned so much, started me down the path of doing short sales and trying to help people out there. Eventually the property sold. They didn't have a probate. Well, they didn't foreclose and person bought it, rehabbed it, they had to strip it down to the studs basically. And when you have something that's extreme like this, like a meth house, you strip it down the studs, put coating on it, pull down to the slab, pre coat the slab and then basically rehab from the inside out. So unfortunately, photos aren't scratching a sniff. Unfortunately, World Savings did not want to have a video. I had a video filmed on my camera. They don't want to accept that. They just wanted the regular photos. So unfortunately it took them another six to eight months to sell the property when if they would have accepted my offer on the front end side, they probably got a little bit more than what they got in the long run. So you never know what you're going to run into in real estate. Most of the time it's really good, solid people. But what you got to realize, especially in the note space. So he's falling behind their mortgage. It's because they're out of work, they've gotten sick, they've gotten divorced, something bad has happened to them. And it's not always there's issues that has happened. Sometimes it is, you know, you run into it where people have struck drugs and alcohol and other things that can happen. I'm proud to say that we helped a lot of people who've gone through financial hiccups stay in their house, get back on track with life, bring a bad chapter to an end and let them move on with their life. So you never know what you're going to find when you walk into that front door or what's behind it. As I've always said, notes in real estate investing is like a country western song. One story at a time, everybody. So here's to dogs and animals and hoarders. They're just one chapter in this crazy book we call real estate investing. So I would love to hear your stories. If you've got a hoarder story like this too, if you've got one you rehabbed or a friend or something like that, I'd love for them to reach out to me. ScottClosenotes.com is my email or you can always schedule a quick phone call. We talk with ScottCarson.com as always, everybody out there, please, please take the opportunity, subscribe, write and review the show and feel free to share it with somebody else there. But thanks for listening to Note and close. Everybody out there, notenation, take some action and we'll see you all at the top, everybody. Bye.