Antilope House

This is the story of how we we built a really cool house on Antilope street and ended up deep in debt.  It could/should be under the money category but…it’s not.

The house on Antilope street

The house on Antilope street

In 2005 Mike and I had just come off our high (horse) of selling our first ‘flip-it’ house in Albuquerque. It sold after being on the market for only 3 days.  We were g-o-o-od.  We were so talented, had great taste and we were sure every one would want to pay for a house we had designed.

After our Albuquerque success I decided to try flipping a house in Santa Fe.  This project was my baby with Mike, encouraging me like he does, convincing me I could do anything I put my mind too.  I found a Realtor and we started looking.  It was bad.  I don’t know how it is in your community but in the city of Santa Fe building permits were not required until the mid-eighties.

For instance:

I walked into a house with an asking price of $250,000.  It was about 1,500 sq ft and as I walked through the front door I noticed I was walking slightly uphill towards the kitchen.  I’m sure it was just dirt directly under the floorboards.   The newly installed energy efficient ( vinyl clad, cheapest you can buy) windows had been installed crookedly.

Mike:  I thought it gave the house a jaunty look.

Molly: Yeah… right

I walked into the kitchen and looked up into the corner of the ceiling.  What appeared to be drywall board pulling away was actually cardboard someone had plastered over!  The entire ceiling was closed in with CARDBOARD!

Mike:  Don’t forget the gas line that ran right across the floor from the kitchen to the living room!

Molly:  I nearly tripped over it on my way out!

I got out of there fast.  I love my challenges but once those walls were opened up I would be obligated to disclose to my buyer what was behind it.  Mike and I talked about Plan B and we decided that building a new custom home may be a better way to go.  There was a credit boom going on and we knew we could borrow just about any amount of money on a signature so why not?

My next stop was to find a general contractor.  Mike and I figured if we could find someone that would work with us and let us do the finishing work we could learn more about the building process.  It would be a good stepping stone to doing the whole thing on our own.  This is a building kinda town so it didn’t take long to find someone.  Within a month I had found a nice piece of land at a reasonable cost and began the buying process.  In the meantime we started planning the house.

Three days after I put an offer on the land I get a call from the bank.  ‘Where are the house plans?’  Oh, were working on them….what?  You need them?  Now!  In 48 hours or we won’t make the closing?’

Oops our naivete is showing.  I thought the bank would give us money based on an idea of what the house would look like.  I can laugh now!  Luckily our General Contractor had built hundreds of houses and his wife was his draftsman.  We met at his home, looked at plans of houses he had already built and picked one.  We were able to walk through one that we liked which he had just completed.  This was great.  After the tour, we tweeked the plans a bit, his wife stayed up all night redrawing them and got them to the bank on time.  WHEW! We closed, submitted for permits and within 30 days ground was being broken.  I was on my way!

Framing the house

Framing the house

This guy worked fast!  One, he had built the house before so he had very few surprises.  Two, he pushed his subcontractors hard.   There were a few design surprises for us but I kept reminding myself this was not  my dream house.  If a beam was round rather than square I could live with it- it was just a minor design choice.  The general contractor did his part building the house and we did our part putting in all the finishes.  Before we knew it, five months had passed and the house was finished.

The front entry

The front entry

We had gone over budget with the finishes (added fancier tile, upgraded on the lighting and plumbing fixtures, added an outdoor kitchen, and more landscaping,…).

No one’s ever accused us of being too cautious.

Since the bank would not lend us any more money we put it on our 0% credit cards.  No worries, we had great credit and a huge credit line.  Anyways, this house would be sold in a few months and if all went well we’d be walking away with $150,000 profit.

The kitchen

The kitchen- This was our red phase!

Things didn’t go well.  In fact, they didn’t go well at all.  By this point it was the Summer of 2006, the market was saturated and starting to cool down.  There were four other new homes for sale on our street alone.  They were similar to ours in size but we out did them in finishes (this was the uber custom home)  and landscaping.  We also had a fancy water recycling system installed.  All the water used in the house would be cleaned and recyled to water the landscape.  We put everything that we wanted in a home into this house. Who could resist?

Master bedroom

The plaster on the walls is a soft blue clay called American Clay

Our Realtor priced the house high.  I did question her pricing but I trusted her confidence.  After a month of people walking through praising our work but no offers I asked her to lower the price by $50,000.  I figured that when a potential buyer came they would see our house as a bargain.  The housing market continued to slow down and the house just sat there for six months.  We were paying the mortgage on this super deluxe monster house and watching our savings evaporate.

Master bath

Master bath-See that silver circle thing above the tub? That the tub filler. A tube of water came down filling up the bathtub.

After a few months of lowering the price again and not getting a single offer Mike decided to get his Realtors license and take over selling the house.  Once he had his license and had joined a real estate company we started aggressively marketing to the other Realtors at the brokerage.    We lowered the price one more time and found a buyer right before we had to declare bankruptcy.  It was a stressful time.  We didn’t do a lot of sleeping those last few months.

Neither one of us was working during this year.  Instead, we were taking cash advances from our credit cards to cover our living expenses. We kept thinking we would sell the house, pay off our debts and go start another building project.  In the end we broke even on the cost of building the house, donated all our labor for free and were left with about $50,000 on our credit cards.  This was added to the other $15,000 in debt that my previous business had incurred.  As much as I wanted to do it again (yes, I’m that crazy) I realized it was time to get a paycheck and started interviewing for a position as a construction manager.  By the fall of 2006, just as the house was selling,  I began my first real 9-5 job.  We ended up borrowing about another $7,000 over the next year to cover the gap between our expenses and our income.  Well, you know the rest (and if you don’t go here).

We learned so much and in some ways this tale just scratches the surface of the whole experience.

If I were to distill it down to what we really, I mean REALLY learned it was this:

  • You don’t control of the twist and turns of the market– When we researched building this house the market was hopping.  Based on the recent past it looked like our house would sell in a month or two. We listened to only what we wanted to hear and it seemed to our ears that everything was just peachy!  We were way out of our league financially and never considered what we would do if we had to carry the house for years before selling it.
  • Don’t make an uber custom spec home!- Our taste is not everyone’s taste.  With the previous re-model we had done a real fun bathroom and kitchen but left the other rooms fairly sedate.  In this house every room was a statement.  We narrowed our list of potential buyers too much.
  • Pick carefully or become your own Realtor- I loved our Realtor.  She was amazing at finding homes and land.  That was her gift but she worked with a tiny firm.  We needed to get a lot more exposure for our specialty home than she could provide.  Once Mike got his license he joined one of the largest firms in town.  We had over 100 Realtors walking through that house a week later. One of those Realtors found us a buyer.

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