The Housing Equivalent of the Island Of Misfit Toys (or What is the HUD Section 203(K) Program?)

There have been a lot of changes in the real estate world over the last couple of years but the one that stands out in my mind the most is the death of the "Fixer-upper" or "Handy(wo)man) special". When I was looking for my first home and didn't have a lot of money to work with (actually I think this is true of all my home purchases) there were lots of homes that were in my price range that needed work. Not a huge amount of work but enough work to make it difficult to say that the home was in "move-in" condition. For example, I bought a home on Damariscotta Lake in Jefferson that had a toilet installed off of the kitchen in the space that was sort of the dining room. There was no door or even a wall to separate it from the rest of the living space. So if you were sitting in the living room and looking toward the kitchen, there was the toilet. When people came by and asked what was a toilet doing in the middle of the room we would just say it was the entertainment center. When we began our renovation of the interior one of the first things we did was to wall off and enclose the "entertainment center", put in a washer dryer hookup, add a door and voila! A half bath with first floor laundry. It wasn't a difficult or expensive renovation but it added value (a lot of value as it turned out but that is a different story).

These days it is very difficult to sell a home that needs work. I hear the same refrain over and over from people looking at homes, "It needs a new roof which is more work that we want to do" or "I hate carpeting, I want a house with wood floors on the second floor". Neither of those two things are impossible or very expensive to do and yet people turn up their noses at a house listed at $200,000 that needs $20,000 of work to be exactly what they are looking for and will spend $250,000 or more for a home that doesn't need the a new roof or has wood floors on the second floor too. And why do they do this? Because they can. There is enough inventory on the market that a buyer can find what they are looking for even if it means spending more money than they really need to. That is great and I am glad that they are buying any house right now. But what about those homes that just need a little love like the elephant from the Island of Misfit Toys? They will eventually sell to someone who is getting a great deal because they have a little imagination and either know how to do the work themselves or have enough expertise to write a check. I've seen waterfront that a few years ago the land that they sit on would sell for $500,000 that are being offered for less than $300,000.Why is that? Because it is more work than people want to take on, even if it means spending a couple hundred thousand more somewhere else.

Which brings me to the point of this entire diatribe. There is a U.S. Housing and Urban Development loan insurance project called the Section 203 (k) program. What the program does is to give home buyers the ability to purchase a home (or up to a 4 unity apartment building) that needs some work (new heating system, energy conservation, etc.) or to turn a single living unit building into more living units. This means that people who are not cash rich real estate investors can get in on buying distressed properties and returning them to livable homes. Not only does this benefit the buyer (who is probably getting more house than they could otherwise afford) but it benefits local contractors, the seller and the neighborhood that no longer has to look at the eyesore on the corner that brings down the value of all of their homes as well. This program isn't for everybody and being a government program there are lots of forms and steps to undertake but if you are interested owning a home and the only homes in your price range need work it may be worth checking out. And if you are looking for someone to help you find that bargain home feel free to contact me.

"Eco Friendly" Damariscotta Lake Homeowners Resort to Extreme Measures to Improve View

On a recent canoe trip on Damariscotta Lake my wife and I saw several shore front trees that have been cut down in front of a large shingle style cottage. At first glance it seemed like a blatant violation of Maine's Shoreland Protection Act and the town's Land Use Code until I noticed that the trees had been felled by beavers. For those not familiar with beavers (Warning!: do not "google" the word "Beaver" without changing your search settings to "Safe") they are a large furry rodent with the Latin name of Castor canadensis. Hunted almost to extinction in the 18th and 19th centuries they are remarkably able arborist/engineers with big teeth who normally cut down trees to use them as materials to build dams and lodges. Being a native species and largely illiterate the beaver is not subject to most state or municipal regulations. This gives them free reign to practice their destructive tendencies. 


There was something that bothered me about the levelled trees and on closer inspection I noticed that they were systematically cut down in a very straight line. Coincidentally this newly felled line of trees dramatically improved the view from the cottage out to the lake. Or was it coincidental? 


I checked in with a local wildlife biologist and asked her about the straight line of tree destruction and whether it was normal for beavers to cut in that manner. Wishing to remain anonymous the biologist I spoke with said that it was highly unusual since beavers have exceptionally short attention spans and often don't even finish cutting one tree let alone a line of trees. But she went on to say that in recent months a number of sections of the lake had been subjected to the same damage using the similar methods. And what was more revealing was that in every case the tree damage had resulted in improved views for the homeowners. 


After a trip to the town hall I was able to turn up the names of the owners of one of the earliest effected cottages and after several attempts to contact them I was able to track them down at fundraiser for an local organization environmental organization dedicated to protecting the the lake and its watershed. Trip and Bitsy Hardwood were reluctant to talk at first but as the night wore on and they consumed several Mount Gay and tonics the truth started to come out. The beavers had been trained to cut down the trees so that the cottage owners could improve their view without incurring fines or the scorn of their community. "How would it look if someone found out that a board member of the local conservation group was cutting down trees to improve the view? I can easily afford to pay the fines and it would certainly be less expensive than hiring trained beavers but what I can't afford is to have my clients or neighbors know that I intentionally violated environmental regulations just to improve my view. But really, why would I have a summer house here if I can't have a good look at the lake from the every room in the house? After the beavers finished with my place some of my friends noticed the improved view and I put them in touch with my beaver handler." Trip said. 


Bitsy added, "I mean we are all about protecting the environment, I have reusable grocery bags that I found at a darling little shop in Camden, we have a Prius, our golf cart is electric, we pay our cleaning lady with returnables but do we really have to suffer having an obstructed view? I mean really." 

Reached at home, Marcel Beavrez had very little to say about the matter. Off the record he was willing to admit that he had done a little "night landscaping" but refused to take any direct responsibility. He went on to explain that the last several years had been very hard for his family and a promised apology and reparation payment from the British Government for the wholesale slaughter of his species didn't look like it was forthcoming so he was forced to do what he could to put food on the table. "It is not like there are many opportunities for beavers to earn a living, eh? With the paper mills shutting down left and right we can't earn money cutting pulp wood so this is all that is left to us. What would you have us do? Move back to Canada?"