Sweat Equity: The Story of An Auction-Bought Home

by Joe Marhamati

The story of a home bought at auction will almost certainly be a more interesting tale than any conventional home-buying transaction. For Mike, it was nothing short of a roller coaster ride.

The 30-year-old Arlington resident bought a three-bedroom, 1.5–bath townhouse at a DC housing auction last year for $189,000. Despite having few regrets, his obstacles to making it habitable have been many.

Mike bought the auctioned property as many others do: without ever having seen it, or in his case, without even knowing exactly where it was.

After a bidding war with a “stubborn” woman who was also very interested in the property, Mike ended up paying about $20,000 more than he originally expected for the property that he eventually would find out was located two blocks off H Street NE. The price tag would not be the first unexpected chapter in this process.

Mike assumed that his new home would be in rough shape having fixed up a house years ago in Richmond, but when he laid eyes on the yellow, boarded-up property that would sooner be mistaken for a shell than a home, he realized that the work he would need to put in would be substantial.

The property had been abandoned for an astonishing 33 years, and the deed was in complete disarray after the previous occupant died and the property remained unclaimed. On one of his first trips inside, Mike found a calendar from 1976 and over three decades worth of decay. He did some ballpark calculations and realized that his construction costs would be close to one-third of what he paid at auction.

Sweat Equity: The Story of An Auction-Bought Home: Figure 1
Sweat Equity: The Story of An Auction-Bought Home: Figure 2

“I assumed the brick mortar had deteriorated, so it had to be completely repointed and in some places rebuilt,” Mike explained to UrbanTurf. “I also realized that the house had to be gutted down to the stud walls.”

Mike did the demo work with the help of laborers from a Home Depot parking lot, but he had major problems with the plumbers and HVAC contractors that he hired. Because Mike purchased the house from the city, he was required to use contractors listed as certified local, small, and disadvantaged businesses. This requirement ended up causing him a great deal of trouble and additional expense as the plumber and HVAC tech he hired wouldn’t fulfill their contracts.

In addition to shoddy contractors, Mike’s new home became prime squatting territory for some of H Street’s homeless population shortly after he took the boards off the windows. (He politely asked that they seek other accommodations while he finished rehabbing the house, which they did.) Also to repair an issue with his sewage system, which is located on the street in front of the house, the city came out and shot water through the line, which had the unintended effect of spewing gobs of waste high into the air and onto nearby cars.

So far, Mike has spent 18 months rehabbing the house, installing new electrical, plumbing, and HVAC systems. He has been through a number of contractors, though relied heavily on his own time and handiwork to reduce the overall cost. He plans to move in in a couple weeks and eventually rent out the other bedrooms to housemates.

Mike’s experience in buying an auctioned property is a lesson for any first-time buyer, prospective developer, do-it-yourselfer, or general bargain hunter. Be prepared for plenty or surprises, a tremendous investment of time and money, and a lot of headaches.

However, Mike’s work is now looking like it will pay off. His house sits on a beautiful side street steps from H Street, and will likely be worth twice what he paid for it, even after renovation costs.

See other articles related to: investment properties, h street, editors choice, dclofts

This article originally published at http://dc.urbanturf.com/articles/blog/sweat_equity_the_story_of_an_auction-bought_home/2489


  1. kck said at 5:51 pm on Tuesday September 21, 2010:
    Would love to hear more as to why the local/small contractors would not fulfill their contracts!
  1. Eric said at 4:57 pm on Tuesday September 21, 2010:
    Seems like a lot of trouble, but the house now looks great! Would love to see some interior shots, too.
  1. jag said at 4:21 pm on Tuesday September 21, 2010:
    Wow, sounds like a nightmare. Hope it's worth it in the end!
  1. Joe Marhamati said at 6:28 pm on Tuesday September 21, 2010:
    @kck-- Here is more information about the contractor trouble that Mike ran into: "I'm sure there are great contractors on the list. I just didn't have luck with them. Mainly the HVAC guy. The HVAC guy took off for weeks after I gave him a check for $2000 to buy my heat pump. I think he just way underbid the job and wanted to walk away from it. I had to go an confront him at his shop. As for the plumber, he just got sick and wouldn't do the work. He gave me a great price, but I ended up having to get another guy to do it. The HVAC guy was far worse." Joe Marhamati
  1. spjulep said at 2:16 am on Wednesday September 22, 2010:
    Would love to know the total amount he spent fixing it up!
  1. roots said at 5:03 am on Wednesday September 22, 2010:
    the guy looks to make 300k PROFIT for probably two years of work. I'd say that's worth it.
  1. Jason Hager said at 1:05 am on Wednesday September 22, 2010:
    Thats one hell of a paint job.
  1. Jersey Joe said at 2:55 am on Wednesday September 22, 2010:
    Congratulations on an amazing before/after renovation project.
  1. Ed said at 1:42 am on Thursday September 30, 2010:
    What a joke. Another liberal mandate with foreseen consequences. Why restrict what contractors purchasers of DC owned properties can use?

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