It was 1973, one year after my wife and I got married. I was a 28-year-old painting contractor with little credit history and had never owned a home. We had just returned from Crested Butte, Colorado where we had moved to only three months earlier, and with an eight-year-old son, we needed a place to live.
Before we left for the mountains, we had rented a home in Maple Ridge from the mother of a friend of ours. At the time, there was not much demand for homes in north Maple Ridge as the once proud neighborhood, like so many others of that era,had lost it appeal as many families moved south to enjoy the amenities of newly constructed homes with new kitchens and bathrooms. The owner of the rental house had actually offered to sell it to us before we moved, for $27,500. Imagine that.
We called her before we left Colorado to see if she was still willing to sell, as the house sat vacant. “Yes, but it will cost you $31,500”, she stated. While disappointed with the $4,000 increase in just over three months, we were not deterred because we did not have many other options. As part of the deal, she agreed to put on a new roof and also offered 100% financing on what is called a Contract for Deed.
She directed her attorney son, our friend, the infamous and now deceased C. Rabon Martin, to draw up the papers after which we filed the Contract for Deed and became first-time homeowners. As I recall, our payment was $308 per month and quite surprisingly there was no balloon note requiring us to refinance at some point in time. The icing on the cake? The house had a garage apartment which we never had trouble renting for $200 a month. I know what you’re thinking, it sounds too good to be true. We felt the same way and could not have been more grateful for the opportunity to own an historic home in Maple Ridge.
Built in 1927, the house sits on the SW Corner 19th and Madison. It had great bones but had enjoyed very few if any improvements over the previous 25 years. All of the plumbing and electrical fixtures in the kitchen and bathrooms were original. The house was heated with a gravity flow gas furnace and cooled with window units, and it had not been painted in decades.
Admittedly, my wife and I looked like hippies in those days (because we were) and it was obvious that many of the long-time neighborhood residents were skeptical of our arrival. While we did not have the money for the major improvements that the house needed, we put in a lot of sweat equity by completely painting the house inside and out and by caring for and making modest landscaping improvements. The transformation was remarkable if I do say so myself and our neighbors warmed up to us bigtime.
At around the same time, another friend of ours bought a neglected home just down the street east of us. He had the funds to completely renovate the home inside and out, taking it down to the studs inside, and updating everything including electrical, plumbing, HVAC, kitchens, baths, literally everything.
He spared no expense in doing it right and the makeover was a remarkable success that along with our modest renovation efforts had helped create a new sense of pride of ownership in the neighborhood. Very quickly, younger buyers began buying and renovating homes in the area and home values began increasing for the first time in many years. Before long, prospective buyers and real estate agents began contacting us to see if we might be interested in selling.
As much as we had hoped to stay in the house, we knew it would be years before we had the funds to update it to the standards we wanted. So, we decided to cash out and use the equity to improve our quality of life. We listed with a realtor and received multiple offers within a few days, doubling our investment in just 30 months, selling it for $62,500.
With the $30,000 gain we were able to… make a 25% down payment on our new home in Lewiston Gardens, hire an interior designer, paint and decorate the house inside and out, buy quality modern furniture for the living areas and had enough left over to help finance a new business venture. It was a win, win, win and it helped me understand the amazing wealth-building power of owning real estate. It literally changed our life for the better, forever. Of interest, on the day this post was published, Zillow offered their “Zestimate” of value for the house at $782,600. Not bad, but I personally think it should be higher.
For a deep dive on how you can use your home equity, check out this post from yesterday. And when you are ready to buy a home, please let me put my 35 years of real estate experience to work for you.