Double A-Frame Home with Infinity Pool Remodels on the Way to Investing Basics

[Tyson Scheutze]

Renovations and dispositions before the financial world fell apart…

As my partner and I both realized we didn’t have a lot of interest in running the operations of our real estate investment company, we began the process of preparing to sell what we acquired. It was not as simple as a stick-a sign-in-the-yard disposition process. Many of the “deals” we acquired required a lot of work to be market ready. I learned firsthand the meaning of sweat equity, even though I would ultimately realize very little equity.

Many years later, I would realize that, even though I made very little profit during this phase of my investment career, I was still extremely fortunate. Fortunate to get a great education. And even more fortunate to learn my lessons in a forgiving market in a forgiving market cycle. Many much admired mentors in multiple markets would not be as lucky.

Our projects circa 2007 required a lot of work before we could sell them. Much of our value came in tackling other people’s problems, specifically large, unwieldy renovations. Our wide-open buy box and fast and loose acquisition model also meant we were not satisfied with buying and flipping standard, traditional properties.

Purchased at a foreclosure auction, the pinnacle of our unbridled acquisition was a double A-frame home sitting cantilevered in a pond with an enormous homemade infinity pool. The home, previously owned by an electrician, was still inexplicably an electrical nightmare. There were hardly any right angles and very little that could exist in the home unexposed. Not a project I would recommend for nascent real estate rehabbers; we approached it with giddy optimism typical of this time in the market cycle.

This project which I affectionately dubbed “The Mistake in the Lake” would consume a solid six to twelve months of my life and end with a 6-car garage, a waterfall-feature flowing under the home into the pond, and a spiral staircase installed by a guy named Gator. Thankfully not all projects were the heavy lift like this one.

One project on the edge of “The Hill” area in Augusta which we did little cosmetic work to, sold quickly and above our expected price. After expressing my shock at the sale, I received some wisdom from our broker who was a second generation real estate guy. Quoting his father, he said simply, “Real estate is crazy.”

My goal, for my process-oriented mind, was to make my real estate less crazy and more predictable. However, we were basically gambling on every transaction at this point in our career. The adrenaline was intoxicating but the bank accounts and accounts payable were very sobering. Fortunately we were pretty decent at selling. Not as good as we were buying, but good enough to execute most of the sales before the world started unraveling.

The best decision we made during our disposition process was seeking out seasoned agents who were specialists in their market niches and letting them work their magic in their market specialties.

Check back soon for more adventures in investing.