So as I mentioned before, my family and I recently moved from Santa Fe to San Antonio to be closer to her family. Her parents live here as well as her sister and her sister’s family. It’s been a very intense period as we search out a home here in the area. This will potentially be our first time buying a home, a process I was unfamiliar with up until a few weeks ago.
Currently we’re staying with my wife’s parents, which is an affordable way of initiating our lives here, but they live on the opposite side of the city from my wife’s work, so commutes have been long, easily two hours round trip. In Santa Fe both our jobs and my son’s day care were in biking distance. Hopefully we can lessen our commute a good deal with a well planned home purchase, but it’s a big city, so car commutes are probably going to be unavoidable. So far we’ve been interested in three properties out of the hundreds we’ve looked at online, driven by, and viewed with realtors. Speaking of realtors, we’re on our second. She’s great. We’re on our second or perhaps third lender. I don’t want to call it a den of thieves, but it’s unclear whom one can trust. And then they have to call you back.
The first property we were interested in… actually I’ll come back around to that one since it’s the part I’m interested in writing about here. The second property we liked was a tiny two bedroom on the outskirts of the outskirts of the city center tucked along train tracks that form a greenbelt, snaking through the inner suburbs. The neighborhood is called Los Angeles Heights, though I doubt the people who live there call it that. The area isn’t very walkable, barely bikeable, but at least it is an actual city style neighborhood with entrances and exits in all directions, and not an outerloop planned community with one way in and out, which no one dares pass through on foot. This area would take some effort to walk out of, but one wouldn’t look entirely crazy doing it. In my mind the house, or the street the house was on was the exact meridian dividing the zone within which and and without which I can see myself living. Anywhere beyond this line and you are in the nethers, so far from downtown that you are undoubtedly driving to everything.
The house was ok. Not great. Not entirely ugly, but rough. Half the exterior was covered in yellow asbestos shingles. The small slab in the back yard, listed on the realty web site as a desirable patio, was so broken with the shifting forces of time, that it would have to be jackhammered out. An unattached garage in the back yard had apparently never been maintenanced, and now the roof shingles were buckled into blackened fritos, a few here, a few there. Water had long since infiltrated the space inside, possibly ruining the roof trusses. The site had questionable drainage, an antique water heater, and outdoor washer dryer hook ups. There were plenty problems. But it did have charm. Unfortunately, it was cheap. We put in a full offer the day after the house went on the market. They already had four offers, most likely one of them cash from an investor. The house will probably come back on the market in a few months for twice the asking price, all the charm removed, huge appliances crammed into the tiny kitchen, horizontal bands of glass tile running around the bathroom. Or maybe some other young family who wanted to fix an old house up bought the property. Maybe.
The third house we liked was in a wonderful old hispanic neighborhood on the near north west side of the city. The location was perfect, just far enough from the interstate to the east that it was out of earshot, but close enough to be accessible. The street was ideal, it was short and had a T at one end, thus limiting through traffic. The other end of the street ran into a road big enough to have restaurants, but small enough not to have chains, at least not yet. Two blocks away on foot is Woodlawn lake, possibly the single nicest public amenity in all of San Antonio. The lake is like a miracle. On the hottest day, one can sit leaning against the ancient cypress trees that stretch along the shore and feel entirely comfortable in jeans. Basketball and tennis courts, playgrounds, ducks, geese, soft shell turtles, there’s even a public dance studio. For us at least the location was perfect.
The house was handsome. There were nice mature pecan trees in the front and back, shading it from the scorching Texas sun. It was built in 1940, in the old style. The windows were original, poorly kept, the exact variety I had in all my old apartments in Richmond, VA. None of the sashes were connected to the weights by rope any longer, essentially making them inoperable. An absurd addition had been added in the 80s. While the original house was still relatively true, the addition was a twisted, leaning dumpy piece of shit. A bizarre flip had been done to the house recently, dark brown paint on the floors, thick cheap carpet over the sagging floors, and an awkwardly cheap fancy kitchen remodel. But the floors were original. And the ceilings were high. There were two outbuildings, almost 500 square feet of studio space. And that location.
We put in an offer. We lowballed them 20 grand considering all the work that still needed to be done to the place, but they only came down four. I didn’t know what to do. We needed a place. I signed a contract.
During the option period my realtor was cool enough to arrange a meeting at the house with a foundation contractor. The contractor was cool cat. He made jokes in broken English. He was funny. He said the house was a piece of shit. The floor was three inches out of level and there was no crawlspace access. It was a pieces of shit. I knew it was a piece of shit. Every time I went back to look at it I saw something else wrong, things that should have been addressed. In the rush job to paint the place the flippers had somehow used paint that didn’t quite match from one area to the next so interior and exterior walls (same sad brown color) looked as if someone had tried to come back and paint over graffiti, but were unable to match the original color. They’d tried to get the kitchen sink centered on the window, but didn’t quite make it. Nothing had been done correctly, and very little had been done. They bought the place for ninety. They wanted one forty six. I couldn’t give these jokers fifty six grand and then come in and fix everything for them. While I was listening to the contractor deride the house, a city ordinance enforcer showed up to ask the home’s owner again to remove the fallen tree in the alley behind the house. I had noticed the fallen tree but wasn’t sure whose responsibility it would be to remove. They said the last time they’d come by, they’d left a notice on the window. The flippers had thrown the notice away. It was too much. We backed out and walked away.
The next day, the first house we’d been interested in came back on the market. This is the house I was interested in writing about. We’d gone to view it with our first realtor, who we were referred to by our bank, who was our first lender. The property was essentially a large old house in Prospect Hill, one of the early neighborhoods built close to downtown. Prospect Hill is perhaps the last neighborhood left surrounding downtown that hasn’t been gentrified. Some time in it’s long life the house had been cut into a four unit and was zoned commercial. One of the units was a glass front commercial space cut directly into the front of the the building. There was also a cinder block oversized two car garage in back of the house. Tall white washed concrete walls surrounded the patio retreat behind the house, with a short palm tree along one side. Most everything inside was still original. The four units had been divided by simply nailing plywood against the door casings. It wasn’t beat to hell like most rentals, just some dirty carpet and sad mildewy bathrooms. All the excellent trimwork was still in place. It was perfect. The second floor apartment was an efficiency, one large room with three walls of windows, a cedar shingled surf cottage perched atop the roof. It was perfect.
The realtor hated it. It was old. It was different. It would be hard to fund. The neighborhood… He hated it. Every detail in the house was a point of contention for us, and I watched in horror as he tried to convince my wife that dirty surfaces were uncleanable, that no one should buy anything unrenovated, that I was crazy to even have brought us there. It was an awful afternoon for me. None the less, my wife is amazing and she truly wants me to be happy. She believes me when I tell her I can fix something. We trust each other. We went directly from the tour to our bank where we were told unequivocally that we couldn’t get funding for anything more than a two unit. That was that. The house/gallery/rentable apartment dream disappeared the next day when the house went off the market. I called the listing agent. The seller was financing the sale.
I tried to forget about the house, but it stuck with me. I did research on how to actually buy a house like it, or this house specifically if it came back on the market. Interestingly enough, FHA loans are available for homes with urban residential/commercial zoning, as long as less than a quarter of the square footage can be used commercially. The rest would need to be used for living quarters. Technically this property would pass this measure, and for good reason. This particular loan is designed for just this type of building in just this sort of neighborhood, potentially allowing for the type of mixed use that has only recently been repopularized. Prospect Hill is a traditional pre-World War Two neighborhood, formed before the advent of the single use zoning restrictions responsible for the suburban boom. Everything in the neighborhood is scaled to distances easily travelled on foot, and a great many homes in the area are still attached to businesses, mostly hairdressers, garages, and restaurants. Are the whites flocking back to the inner cities ready to invite their community’s citizens inside their home/businesses to interact and shop, or is the developer model of dormitory cubbies stacked above video game retailers and crap convenience distributors the only mixed-use options that can get funding through traditional lenders.
So the house came back on the market the other day. Who knows why? I’m not sure how seller financing falls threw but it did. I rushed back over to the property the day it relisted, called the realtor, called the listing agent, called the lender, called the goddamned mayor. Nobody answered. I sent the lender a note, explaining the situation, told him the part about FHA loans being used for some commercial properties, tried not to sound desperate. No body got back to me. The next day the listing agent finally answered. He remembered talking to me the month before. I had asked him to call me if the property came back on the market. He hadn’t called. I could tell he felt bad. He seemed genuine. He tried to let me down easy. He was on his way to meet the seller and the new buyer. They were paying cash.
When I finally did hear from the lender, he didn’t mention anything about my investigations into the FHA loan programs. He didn’t say whether or not I could get funding for something similar. He didn’t really say much. He basically just said that any loan on a commercial property would be totally different from the single use residential loan we had talked about in his office. The tone of the email was, “You don’t get it Mike, if you want a house house, we screw you with this; if you want a business house, we screw you with THIS!” My instinct tells me I’d hear something similar from other lenders, especially in the current market. Wouldn’t it be to the lender’s advantage if properties they funded could be utilized for income generating projects? Are the single use zoning restrictions partially responsible for the boom and bust housing cycle we’ve come to see as normal? Are there other obvious options for urban renewal possible that are already present and functioning in traditional neighborhoods? And what should my next move be if the house in Prospect Hill comes back on the market?