I bought the home in "as-is" condition in October of 2005. Unbeknownst to me at the time I purchased the property, the home was on septic service and not public sewer. Now remember, this is in a relatively urban area. For cripes sake, it's located on Agler Rd. between Sunbury and Westerville Rd. Did you know there is a strip of about 14 homes that are still served by septic (and not public sewer) in this area? Neither did I!! It was the last thing I thought about when I went out to inspect the house initially to see if I wanted to place an offer for purchase.
I threw out an offer of $28,000 for the home. My offer was accepted. I thought I had picked up a heck of a deal at the time, as the market values for most every home on Agler Rd. in this area at the time was in the $60,000+ range. I knew I'd have to put a chunk of change into the home, but still, after completion, it would be a nice investment property for an investor.
Shortly after purchase, I had one of my renovation crews go to work on the home. We put in the following:
- new vinyl siding
- new plumbing
- new insulated windows
- new kitchen cabinets
- new bath tub, surround, vanity and fixtures
- tons of drywall repair
- new carpet and vinyl flooring
- new furnace
- new hot water tank
- new light fixtures, outlets, and switches
As you can see in the picture above, the home was ready to be rented. The picture was taken late January of 2006 when most all of the renovation work was completed. I immediately (within 2 weeks), had a family set to rent the home for $625/month. The week before this family was to move in, I happened to be at the property talking to a Mifflin code officer about a next-door property I was having issues with. It was inhabited by vagrants and owned by one of Columbus' most notorious slumlords. The officer asked if I knew about the problems with my own property. Taken aback, I asked "what problems?". He proceeded to mention that I might want to contact the Columbus Health Department, and that he thought there were some sort of problems with the septic service. I immediately roped back, "septic problems!!! I didn't know the home was on septic!" He proceeded to say, I might want to contact the health department and that he could be speaking out-of-line. I vividly remember this taking place on a late Friday afternoon. I was a bit horrified at what I might find out, and those thoughts lingered with me all weekend. By the way, here's a picture of that septic system, or at least what was left of it...Does this look like a septic system to you???
The following Monday, I called the Columbus Health Department. Horror was the least of what I felt. Extreme madness would be a better description. The gentleman I was told to call, advised me that the home had been deemed "uninhabitable". That's right, no one was allowed to live in the home. Further, he stated that the home had been marked with a sign on the front door that said "UNINHABITABLE" when the prior owner had it. This signage was supposed to have stayed on the home. Obviously, this was all news to me. I saw no signage at all stating that the home was deemed "uninhabitable" when I went out to see if it was something worth purchasing. The Health Department guy said that this should have been clearly marked and stayed there up until a new public sewer line was run. Obviously that was not the case. I had assumed the property was served by public sewer. To ASSume is to make an ASS out of yourself!
I had to call the tenants set to move in and tell them they could not relocate to this house, and that they'd have to find some other home. I was miffed beyond belief. I'd put quite a bit of money into the home, and now I find out that I can't have anyone move in until a new public sewer line is run through the area.
The reason it was deemed uninhabitable? The septic tank had been leaking into the neighbor's yard. This actually caused the prior owner to go into foreclosure. The prior owner had a clear cut case but probably didn't have the where-with-all or knowledge to know their rights. When she got financing on the home (it was FHA financing), she should have received a certificate from the Columbus Health Department stating that the septic system was okay. Actually, that's a requirement to receive FHA financing. This prior owner did not have that. She then couldn't afford the cost to rectify the leaking problems occuring into the neighbors yard and went under.
The kicker? I can't even put in a new septic system as a tempory fix. Current code is structured in such a way that the layout of the parcel won't allow for the new code restrictions to allow a new septic service to exist for the home. The only out? Wait until the new public sewer line services the home. I've called about that since I first found out about the problem that exists. I've been told now for over two years that the public sewer was under way. It's still not happened as of this writing in December, 2007. By the way, the last I talked to these guys in October, I was told the project would be completed "by the time the snow flies". Well it's flown all over the place on several occasions this year and I've yet to see any resemblance of an earth mover anywhere near Agler Road!
So here I sit with a "dead" asset. I can't do anything with the home until that new public sewer line is run. Oh I suppose I could sell the home to some other unsuspecting buyer, but come on! Who would do that! HUD would! That's what they did to me. Unfortunately, I've talked to these government folks until I'm blue in the face and have gotten nowhere. I'm not begging for a return of money. I honestly think that nobody was at fault here other than the seller that sold the property to the woman that owned it before I did. That person should have known better.
I don't think HUD would knowingly market a home that could not be lived in. I know I would not have knowingly bought a home that couldn't be lived in, nor would any intelligent person. Unfortunately, trying to explain this to government officials is like talking to a wall. I've been told that "I'm an investor and should have known better". I've also been told, "If I was a woman or minority, it's a different story". They could understand the mistake being made in those circumstances. I'm not kidding when I tell you this! I've got email communication to back this up.
Yes I'm venting a bit as I write this article. I'm also hoping to convey the fact that it's VERY easy to fall into an unsuspecting #%*thole like I did with this transaction. Here I'd been in this business for over 10 years when this happened to me. Luckily I've been able to withstand the financial blow. Some of you interested in jumping right in to "flipping" may not be so lucky. The only reason I write this story is to show how easy you can come across one of these "pitfalls". There are several others I've experienced that could have been absolutely devastating. You'll see those eventually outlined here as well. Be conservative and take your time. Above all, good luck on all of your endeavors!! By the way, here are some additional photo's showing the renovation work we had done to this home. What a shame it was for not. It now sits boarded and empty until which time the city thinks it's appropriate to finally run that sewer line down Agler Road...
ROSEWOOD HOLDINGS, LLC
This page was last updated: January 13, 2008
Call us now: 614-865-0807
Rosewood Holdings, LLC
1237 Three Forks Dr. S.
Westerville, OH 43081
614-865-0807
Email: Rosewood Holdings
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2034 Agler Rd. The mere mention of that address makes me cringe. This story is very real and a perfect example of how easy it is to go upside down in one transaction if you're not careful. Please take this story to heart. If it can happen to me, it can happen to you!
I used to be a very big buyer of HUD homes...up until just over a year ago. I bought this home at 2034 Agler Rd. (pictured below after I had renovated it).
