A couple of weeks ago, I called my loan officer Andy and made him answer about 40 straight minutes of questions so I could pull together this post on how to buy a house. Most of my questions were about securing a mortgage, but then I asked one that really opened a can of worms: “Is it possible to get a loan to buy land and then build on it?” Andy said that yes, those loans do exist. He then said that because of COVID, lenders have gotten anxious and that those loans are few and far between (if they’re issued at all).
Now, when I was growing up, my grandma always used to accuse my grandpa of having “selective hearing.” And I think that trait may be genetic, because what transpired over the subsequent two weeks was a result of me only hearing the “yes” and ignoring the serious, adult part. I set myself up for a REALLY stressful situation, but I learned A LOT and it may (or may not???) have been worth it.
P.S. Yes, there is a video walkthrough of this home buried in this post if you can find it 🙂
I started officially house hunting (like, with a real team in place and intent to put down on offer if the right thing comes along) on July 13th and OOF. It’s no joke out here in LA! I just got a notification that a house I looked at 2 weeks ago is under contract for $140,000 OVER ASKING.
And despite the idea of buying a house being fun and exciting — I mean I work at a design blog, so how can it not be?! I can finally make a house my own! I can put down permanent roots on the west coast! — looking at so many gut reno projects can feel a little uninspiring and demoralizing. (“I’m agreeing to pay…half a million dollars…for the privilege…of paying another 100k…to gut a house???” – me, in the refractory minutes after I’ve frantically sent a listing to my realtor.) Like Sara, my price bracket falls in the “falling apart” range, and I still just haven’t found the one that feels right. Nuts, right?
So in the interim, despite Andy subtly telling me not to look at land…I decided to look at land. AND THAT IS WHEN I SAW HER. The hill house. I was scrolling through parcels and lots and architectural renderings when I spotted the listing photo above. It was definitely NOT a photo of a piece of land and if it was a rendering, it was a BAD ONE.
She had been sitting on the market for about two weeks at $299,000 and her bio was simple: “Three lots sold for land value. Incredible views!!! A combined total of 29,410 sq ft…the house on [one lot] has been sitting untouched for over a decade and may be a teardown.”
BINGO. MY TARGET WAS ACQUIRED. THIS WAS GOING TO BE MY HOUSE.
I’m writing this like it happened in the distant past, but let me be clear: I found this place on AUGUST 7TH. It’s August 19th today. TWELVE DAYS, GUYS. In less than two weeks, I think I earned an honorary master’s degree in teardown properties. I basically took classes in city planning, building & safety codes, engineering and roadway guidelines, neighborhood alliances, local politics, construction costs, permitting procedures, structural engineering, and more.
There’s a Leslie Knope quote that goes, “There’s nothing we can’t do if we work hard, never sleep, and shirk all other responsibilities in our lives.” And y’all, that is what happened here…for a while. (I know, I know…did I buy it? STAY TUNED. I’LL GET THERE.)
Anyway. I found this house on a Friday and my thought process was simple: if I’m already looking at 400-500k gut jobs or tear downs, why NOT try to get one with a view for WAY less? Later that night after receiving too many very enthusiastic emails from me about this property, my realtor Francine emailed me the following: “Ok. So this one is interesting. It is currently owned by someone who wanted to build 3 homes on the land but has been unsuccessful. It does seem like a lot of work, which I’m not saying you can’t do. But it looks like you would be dealing with more than just the house…we can definitely go there if you want to take a look to see how it is.”
She had attached a document from a 2017 hearing with the Zoning Administrator, where the homeowners in the area had successfully blocked the current owner of the property from resuming development. Why? Because…
So basically, this is when I learned all the dirty details about this house. I knew she had sat vacant(-ish, as evidence inside would prove) and unfinished for over a decade, but I didn’t know why.
And after a solid 4-day sprint of research and assistance from both friends and government workers, it boiled down to this: in 2005, a developer bought several plots of land at the top of this beautiful hillside with the intent of building a whole bunch of modern homes with gorgeous views. Normally, if you’re planning to develop several plots of land, you have to tell the city and they’ll send out a special team to gauge the environmental impact.
Now, our developer realized that he had bought land with a whole bunch of black walnut trees…and that was BAD for business. And I don’t know if you know this — because honestly, WHY WOULD YOU???? — but black walnut trees are very important in California. So to avoid having the government halt his project, the developer decides to shift around titles and land deeds to make it look like he’s only building one house — my hillside dream house — and he successfully usurps any environmental regulation of the project. He then cuts down A TON (read: approximately 10) of these trees to clear the land for this home.
In the meantime, the developer was also lying about the width of the road to the house (spoiler alert: there isn’t one) and finally, the neighbors call him out. They’re able to petition the city and his permits are revoked. If this is sounding like a Disney movie to you…well, please know that it sounded like a Disney movie to me, too.
BUT THAT’S NOT ALL. In 2011, this developer is able to sell the land to a new buyer who, like me, intends to finish the house. (Unlike me, the new buyer also hopes to build 2 new homes on the neighboring parcels of land.) Once again, the development is stopped by the homeowners alliance. The new owner claims ignorance, saying that he thought everything was in order when he acquired the property, but the neighbors basically say, “Dude, are you serious? You didn’t know that this was an enormous issue? We’ll only consider letting you finish this house if you donate the 2 of the 3 lots to a land conservation project.”
Now, seeing as *I* am a person with no previous experience in permitting and building, I’d have to agree with the neighbors! HOW DID HE NOT KNOW? If I can find this information out, why wouldn’t a developer do their due diligence? (And is it dangerous to be trash-talking a corporation that may or may not hold the title to my home?)
But overall, this just inspired me to push harder. Since I am just a regular person with absolutely no vested interest in building multiple houses, I would be happy to donate the two lots next door. I’m looking to be a permanent member of a community! And I am lucky to have a great resource here, in this community and site with y’all, to see me through the renovation, right? WHAT COULD GO WRONG?!
HAHA of course EVERYTHING CAN GO WRONG and this was going to be INCREDIBLY HARD. I woke up on Saturday, August 8th (yes, 11 days ago!), and sent everything I had pulled to my ice skating teammate and ACTUAL earth angel, Dafne, who has a masters in planning from USC. She had the actual brainpower and knowledge base to help me decipher all these documents, to make sure that I was reading things correctly, and to send me to ZIMAS where I could dig more deeply and get more details. (Side note: if you live in LA, ZIMAS IS SO COOL. I also spent time looking at my own address because it has a ton of documents and permits — like there are documents from the 1930s in there! NEAT.)
Anyway, she referred me to great points of contact in city government (THANK YOU DAFNE), but she also hit me with some wise words: “From what I’m reading, it sounds like a total sh*t show.” OK, GREAT. So I have my loan officer, my realtor, and my friend with planning experience all telling me that it’s not the best idea…but dang, that selective hearing kicked in high gear because I HAD ALREADY DECIDED THAT IT WAS MY HOUSE.
“But yeah, my initial opinion is, if this were easy, it wouldn’t be $299/it would be done by now,” Dafne texted. Yes, that is true, but it also already WASN’T easy. Based on all the searching I did, I came up with a couple of key stakeholders I would need to win over and problems I’d need to solve (Note these are specific to this house but good things to keep in mind if you are in a similar situation):
- Financing: can I get a loan for this?
- Neighbors: if they’ve successfully killed two attempts, my fate is in their hands.
- Permits: am I even allowed to build here anymore?
- Utilities: did they build them? Are there hookups in place?
- The Road: OK. A CATCH. This ol’ girl does not have a freaking road, which is a major issue. And I also still haven’t heard back from the Bureau of Engineering — I’ve been told that they’re slammed — so it’s unclear on whether or not *I* would be responsible for extending the road or if the city would pay. Basically, this is a dealbreaker because OMG ROADS ARE SO EXPENSIVE.
None of this seemed particularly easy — it actually seemed like a real frickin’ nightmare — so I basically thought, “ah yes, THIS is why this house is still available. I am the only person with the patience and willingness to figure out all this annoying stuff.” And to some extent, I think I was right. I can also see why developers are such a big thing. The information varies so much by neighborhood — not even by city! By neighborhood! — and it makes the barrier for entry SO HIGH. It is really difficult to figure these things out for yourself while trying to maintain any semblance of a normal life. (To that end, HELLO! to all my friends whom I absolutely ghosted while this was happening! I had the bandwidth for EHD and for this house. Everything else was punted.)
Here’s the video for all my impatient friends. Three floors in all her vacant and unfinished glory (if there’s an ad, just give it 5 seconds!)…
Let me be clear: this hill house is NOT a looker from the outside. She has seen better days. And so that Sunday — two days after finding the house, and several gut reno tours into my search — I was prepared for a big ol’ wreck. A neighbor next door warned me about squatters and I had worn workout clothes and sneakers so I could climb through internal debris (also so I’d be able to land safely in case any of the floors gave out, which I fully anticipated).
But then…I was NOT PREPARED for what I found inside. Was there mold? Yes. Was there water damage? Yes. Some graffiti? Sure. And one room had been painted periwinkle, so it was clear that there had been a few inhabitants in the past. But overall, she was beautiful. I WAS OFFICIALLY IN LOVE. Over 2,000 square feet, 3 floors, 3 beds, 2.5 baths, AND major views in the hills…for $299,000? I was ready to do whatever it took. SHE WAS MY HOUSE.
I had figured that all the drywall and subfloor would have to come out, all the systems (e.g. plumbing, wiring, HVAC) replaced, and she’d need new windows, doors, housewrap, and siding, but overall…this seemed doable. In a shocking twist, she seemed to need less work than most of the homes I’d been looking at. WHO THE HECK WANTS TO TEAR DOWN THIS INHABITABLE BEAUTY?
But she was also way bigger than I had anticipated (yes, TWO fireplaces!) or budgeted for, which started to get concerning. And while we’ve handled a ton of renovations at EHD and while I can pump out a budget for a new kitchen or new windows or a full bathroom, I don’t have any clue how to budget for an exterior update…or how to figure out if any part of the exterior was even salvageable. (ESPECIALLY CAUSE THIS GIRL IS ON A REAL STEEP HILL! How do you even start?)
This is when I had to get serious…and y’all, I cannot tell you how many phone calls and emails were made over the following week. JK. I can tell you: over 100 phone calls and over 200 emails! I was waking up at 4:30 AM (normal for me), but then jumping straight into EHD work (not normal for me — I’m more of a “lay in silence and stare at your phone for 2 hours” gal) so I’d be able to connect with permitting departments and city planners during their working hours.
I feel like this — in addition to, you know, navigating the entire system — is what makes exploring non-traditional buying options SO HARD for regular people. In a normal situation, I’d love to delegate my questions and research to the weekend! But when you’re relying on others or when you need feedback to move forward, it’s really tough to manage fitting everything into business hours. I ghosted every friend and responsibility in my life that did not directly correlate with either EHD or this house.
So naturally, now that I had devoted all of my effort, things started to fall apart. I had sent Andy, my loan officer, a text with the listing when I had first found the property and he had responded that it would be “tough but possible.” But when I sent him new photos of the interior, it was a hard pass. He was willing to look into other land loans, but the prognosis wasn’t great. NO PROBLEM, I’ll just find an alternate bank! Add it to the to-do list! Why not?!
I then reached out to the homeowners’ alliance who had blocked the initial build…but there was just radio silence. And a few days later, my realtor texted me to let me know that someone else was planning to put an offer, so I slid into their Instagram DMs as a last-ditch effort to plead my case. Basically, I told them that I’d heard that a developer may be trying to get the lots and that I’d be interested in renovating, moving in, and conserving the neighboring land, but not without clear guidelines and a blessing from the alliance in place. Someone responded and said that they’d reach out, but they never did. (And as of today, they still haven’t.)
And while I’m still willing to meet their demands listed in the original grievances with past developers — and while city staffers debriefed me on the full drama and suggested the best ways to mediate — I couldn’t figure out if it was worth it to put an offer in on a home whose repairs could be blocked by neighbors. (If you’re like, “wow, I would have thought that they would have been excited to have that house fixed up and not tanking property values while guaranteeing no other development,” ME TOO. THAT’S WHAT I THOUGHT. But nope. There are some politics I don’t understand!) I definitely didn’t want to be sitting on a $299k home that I could never live in.
Then, I couldn’t find a contractor to bid on the project. Fun fact: contractors don’t have a particular interest in accompanying you to a house that you may or may not choose to purchase — and they shouldn’t, because that would be an enormous waste of time. But I couldn’t even pay someone for their time — 3 separate GCs took a peek at the exterior and passed. One quoted me an arbitrary $500k upon seeing the exterior photos and then raised it to a million after I said it had been vacant for 10 years. One said that he’d come look, and then ghosted. (He has since reappeared! Maybe his ears were tingling.)
Finally, I was able to get someone out. He’d managed projects for a ton of *my* favorite designers out here in LA, so while I hadn’t worked with him before, I knew he was trustworthy. His estimate? 300k – 400k for BASIC, builder-grade finishes. WOW. This is where I really started to spiral. Because look, that’s a LOT (and it feels insane to write about it now)…but at the time, I was just thinking “HEY, is there really even a difference between buying a 500k house that needs 100k of work and a 300k house that needs 300k of work? It’s the same at the end of the day, BASICALLY, right?!” (Do I know that renovations often go over budget? YUP. Was I ignoring that fact? ABSO-FREAKING-LUTELY. Selective hearing is my downfall.)
True to form, it just got worse and bigger and harder! My realtor clarified that I’d need to pay in cash to compete with this other potential pending offer that she’d been tipped off to. And instead of me being like, “hey, dummy, clearly the universe says that this is not for you,” I just got MORE INVESTED. I WAS ON A MISSION TO FIGURE IT OUT. I ran a ton of financial scenarios, talked to about a million different bankers, and then my mom stepped in and offered to help. This is where I gotta be real: I am VERY privileged and very lucky.
We ended up exploring a lot of options: what happens if she loans me the money? (Answer: paperwork, and she’d be required to report my repayments as income, which I didn’t love.) What happens if she gifts me the money? (Answer: taxes, and I’d obviously be feeling wildly uncomfortable forever until I could repay her.) But the bankers I chatted with thought that this was the best option, and said that if I owned the land outright, I would be able to be pre-approved for a construction loan that would more than cover the expenses.
But I felt — and still feel — REALLY uncomfortable playing fast and loose with money that belongs to my mom, so I did more research. I had my realtor pull comps for the neighborhood just so I could figure out what repayment would look like. Basically, houses with “worse” views and less privacy are selling for 1.1 million, while new builds down the hill are currently on the market for up to 1.7 million. I figured that if I bought the land in cash, took out a 300k construction loan, used 80k from my own savings (ah, yes, there it is, buried my own financial information deep in the post), I’d be able to fund a renovation (along with any surprises). I’d then be able to have the house appraised upon completion so I could take out a HELOC — AKA a “home equity line of credit.”
A HELOC is basically the difference between what you owe on your house and what it’s worth — so in this example, since I’d own the house outright, I could have access to nearly a million dollars. (!!!!) Mathematically, I’d be able to pay back my mom, pay back the construction loan, and just pay off this equity line of credit til the end of time (instead of paying a mortgage)…but it still felt kind of wrong in my gut. At this point, I also had a good pal come in and offer to go in on the property with me, but I just don’t think I have the stomach to be a real estate tycoon.
My mom is SO GENEROUS and SO SUPPORTIVE and she tolerated about a million texts and phone calls from me as I started to figure it out. It still felt like a sound investment — a hole in the market that’s made off-limits and cumbersome by bureaucracy — and honestly, a home with a view like that will always be valuable, so I just continued to double down and do some more research. Before I officially made the ask for ANY funds from anyone, I wanted to start knocking out some inspections and confirming that that the house was stable (and not, you know, in danger of sliding off the hill anytime soon, which became a big concern of mine).
AND GUESS WHAT. TURNS OUT…SHE ISN’T STABLE. Last week, I paid a very talented structural engineer SEVENTEEN HUNDRED DOLLARS to climb down a very steep hill and then send me a 14-page report telling me that my dream home is not necessarily structurally sound and it would need to be re-permitted.
IT WAS DEVASTATING. In hindsight, there are a lot of other things I wish I could have spent $1,700 on (you know, rent, food, literally ANYTHING ELSE) but I’m glad I spent it here — I wouldn’t have felt okay asking ANYONE, whether they’re a bank or my mom or my friend — for a loan knowing that I could have done more due diligence and chose not to. (My mom also sent me a text after I bemoaned the cost, telling me not to be “penny wise and pound foolish,” which did make a lot of sense considering that I was willing to go into SIX HUNDRED THOUSAND DOLLARS worth of debt for this house. Perspective. Thanks, mom!)
Did I have to pay a structural engineer upfront? I guess technically not. I had noodled over a competitive offer with my realtor which would have given me a ten day inspection period, but y’all — there’s no way I would have been able to knock all this research and all these meetings out in those ten days.
As evidenced by today’s post, I needed at least twelve days to get my ducks in a row — I never could have figured all this out while under contract. (And now, my metaphorical ducks have been ripped away from me because honestly, I shouldn’t have even been looking at these ducks to begin with!!! This has gotten away from me, but the point is that I’m glad I did as much work up front as I could handle, even though this all could have been avoided if I had stayed in my lane.)
BUT ANYWAY. This potential foundation issue, to my contractor, may be a kiss of death. If we could rebuild on the current foundation and if the current framing had been permitted/approved, we’d be golden…but since the permits were revoked, the foundation was never technically approved (the framing was, though!), and the current underneath of the house is incredibly suspect (I don’t know about you, but I’m pretty sure houses on hills are not supposed to be balanced on 6 pieces of wood!), the whole thing would need to be fixed which adds a whole new round of expenses. RIP TO MY HOPES AND DREAMS. But maybe?????
Where We’re At
While I had the structural engineer out last week, my realtor got a text that the aforementioned “very qualified buyer” had put in an offer on the house. OF FREAKING COURSE THAT HAPPENED. BRB, just spending a month’s rent to learn that a house I DON’T EVEN OWN may or may not be in danger of crumbling. OF COURSE SOMEONE ELSE WOULD TRY TO BUY THAT HOUSE IN THAT MOMENT. As if the universe hadn’t been like, “GIRL NO!!!” the whole time.
But I wasn’t sure if this was the seller’s agent trying to force an offer from me or if it was real — and the status hasn’t updated, so honestly, maybe the former? — but I’m sort of at an impasse. I did so much groundwork — and it’s not over yet! I actually have another call with the Specific Plan team today (certain neighborhoods have certain plans and rules, who knew?!) as a followup from our last chat last week. I’ve also had a few banks circle back with me — after looking at my LinkedIn!!!! (I think they saw I worked here and were like, “oh this team seems competent, maybe she can handle a renovation”) — to offer up lot + construction loans, so in a NICE happy ending, I could do this without asking my mom for money, which makes me feel a whole lot more comfortable! (The caveat here: I’d just submit an offer with a note saying that they can leave it on the market while my loan clears, but I would lose it if someone could swoop in and pay cash.)
So maybe I’ll just keep an eye on my sweet hill house and if it’s meant to work out, it’ll work out, right? Maybe the Bureau of Engineering will respond to my email and let me know if I could just build a driveway instead of extending the road. Maybe a neighbor will see this and bless my plan. (In which case HI, I really want to move in and live there!!! I am not a flipper! Just a regular person trying to buy a house in LA!)
But I am glad I’ve had the experience. It’s felt like a crash course, but in the best way — I was thrown WAY out of my comfort zone and I’m still alive to tell the tale! I thought I had home buying figured out, but WOW, teardowns and lots and permitting issues are a whole new playing field and I’m lucky I had the chance to learn about them while trying to grab a house I *love*.
For what it’s worth, I’ve also been SO impressed by the city planners and department staffers I’ve chatted with. I don’t have a ton of local government experience, but never in my wildest dreams did I ever anticipate that anyone from the government would have the time or bandwidth to chat on the phone with me for 30 minutes about a house that I may or may not buy. And they’ve sent thoughtful emails, and follow up notes, and meeting invitations! WHAT?! ARE THESE MY TAX DOLLARS AT WORK? How do I find more of these lovely people?! Even calling 311 has been a joy — I vaguely describe issues and they competently connect me to the actual person who can help. AND THEN THAT PERSON ACTUALLY HELPS! I don’t know if this is normal or just an LA thing but y’all, we have some AWESOME FOLKS working out here.
It’s really been like working with a team of Leslie Knopes and I’m so grateful for all the time and energy they’ve devoted towards breaking this down in ways I, a not-developer, can understand. (Another fitting Knope quote while we’re at it: “I have the most powerful currency in America. The blind, stubborn belief that what I am doing is 100 percent right,” WHICH IS BASICALLY THIS WHOLE ESCAPADE IN A NUTSHELL.
To that end…I guess this is a bit of an unfinished story. AND THAT WAS THE ABRIDGED VERSION. The door seems like it may be closing right now but WHO KNOWS, MAYBE IT’S NOT? Maybe I should reach back out to those banks and take them up on that lot + construction loan combo? Are these views just too good to pass up? And maybe y’all can advise: will I ever find another one like this? Will I regret sliding into passive mode after two solid weeks of nothing but hustle? WILL THIS BE MY “ONE THAT GOT AWAY”, but for houses?!
But I guuuuuuess in the interim, if you’re the person who has immediate access funds and the bandwidth to fix up a hill house…BOY, do I have a spot for you. Just make sure that you invite me over when it’s finished, okay????