Читать книгу Teardown - Gordon Young - Страница 11

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Bottom-Feeders

Looking back, the desire to own property in Flint was rooted in my decision to buy a house in San Francisco. Despite the yawning economic, geographic, and meteorological gap between the two places, they were united by one thing: I didn’t have any business owning property in either place. By nature, I am deeply skeptical when it comes to most things that involve spending money. A few friends have jokingly used terms of endearment like “cheap bastard” and “tightwad” to describe me. (At least I think they’re joking.) But my frugality seems to disappear when it comes to real estate.

Traci discovered this six months after we gave up our respective apartments and moved in together in 2003. We had a nice two-bedroom flat up a steep flight of stairs on the western slope of Bernal Heights, with built-in bookshelves, an elegant nonfunctioning fireplace, and a back deck, all set to a soundtrack of muffled salsa music that drifted up from the bars on nearby Mission Street. At $1,850 a month, it was reasonably priced by the outrageous local standards. We were happy. We were in love. Why mess with this arrangement?

Well, I couldn’t help thinking about all the money I’d handed over to the landlord of my previous apartment on Potrero Hill, roughly $130,000 in rent over a decade. And I’d always felt a little like a visitor to San Francisco. I liked the idea of Traci and me becoming official residents with a real stake in the city. I was in my forties, and I wanted to be a homeowner. I foolishly believed that by combining the meager incomes of two journalists we might have a shot at owning in one of the world’s most expensive markets. Our household income was around $90,000. Starter homes in the San Francisco neighborhoods we found acceptable started at around $500,000. Neither of us did that well in math back in school. We were writers, after all.

Our friendly landlord at the time, Michelle, was a real-estate agent who was, of course, very encouraging. She thought my plan was brilliant, especially since we wanted her to be our agent. Her husband was a lawyer who grew up in Muskegon and wore U of M T-shirts, so there was a Michigan connection. Already I was basing housing decisions on extraneous emotional attachments.

In the spring of 2004, Michelle put us in touch with a mortgage broker named Ralph, who called to set up a meeting after we’d submitted our financial information. He was a calm, conservative-looking guy with a brush cut, a mustache, and a suit. After congratulating us for having good credit scores and living entirely debt-free, he politely said he couldn’t imagine how we’d ever be able to afford anything in the city. He half-heartedly said a studio condo might be a possibility. That’s right, one room for me, Traci, and our two cats—Sergio and Purdy. “I can’t see you getting a loan big enough for anything larger, and even if you got it the payments would eat up more than half your take-home pay every month,” Ralph said in a sympathetic but firm tone. “Now’s just not the time for you to buy.”

I had an instant flashback to my grandfather sitting at the wooden desk in the corner of his dining room back in Flint. He was a real-estate agent, and he would often work from home when he wasn’t at the office, making calls on the hulking black rotary phone and filling out paperwork while my grandmother and I watched TV in the living room after dinner. In my memory, he frequently talked people out of buying houses. “I think you’d be much better off if you saved your money and kept renting,” he’d say. “You’ll be a lot happier with money in your pocket. You don’t want that mortgage hanging over your head, young man.”

Ralph was saying the same thing. He was being straight with us. Now wasn’t the time. I was momentarily disappointed, but when I left his office I felt a huge sense of relief. I’d given it a try, and it hadn’t worked out. Now I could stop worrying about it and enjoy the summer. Traci took it in stride. “Oh well,” she said. “We’ve already got a great apartment.” It was a different story when I called Michelle. “He told you what?” she said, clearly annoyed. “I don’t think that’s accurate at all. Let me give you the name of another mortgage broker.”

The new guy, let’s call him Jimmy, was down in San Jose, the sprawling city an hour south that languished in the shadow of sophisticated San Francisco. He called after we sent him another thick batch of financial info and told us not to worry; we were already preapproved for a $551,000 loan. He sounded confident, if not a little giddy. I had more or less resigned myself to not buying, so his breezy disposition made me uneasy. I told him what Ralph had said. “No idea why he’d tell you that,” Jimmy replied. “That seems a little unprofessional, but I’d never criticize another broker.”

Thus began the summer of house hunting. Make that the summer and fall of house hunting. Traci and I spent every Saturday deciphering the property listings like code breakers. Sundays and numerous Tuesday afternoons were devoted to open houses. That was our routine for six months. At first we tried to look presentable, but after a while the long slog wore us down, and we opted for comfortable clothes—cutoff shorts and T-shirts. We told ourselves we might appear to be anticorporate Silicon Valley entrepreneurs who had struck it rich creating a useless bit of software or a doomed website. Besides, looking fancy wouldn’t do us any good when we got outbid on a house. And we got outbid five times. Or was it six? Once by $129,000. And once by someone who made an all-cash offer. (Probably some dude in cutoffs.)

We started to recognize the other bottom-feeders as we made the rounds of anything priced at $499,000 or below. Knowing that everyone overbid, this was the only price point we had even a remote chance at. It appeared that the same forty people without enough money to buy were looking at the same low-end properties every week. I started exchanging the manly chin lift of acknowledgment with guys and friendly hellos with women. They were our competitors for these properties, but the fact that they kept showing up meant they were as unsuccessful as we were. I developed a low-key camaraderie with them, although we seldom said more than a few words to each other.

There were times when well-dressed yuppie couples—women in dresses, men in suits minus the tie—would roll up in a Mercedes or an Audi for an open house, and you could feel the collective despair and resentment ripple through the rest of us as we checked out a bedroom closet or ran a hand over a kitchen countertop. We knew that if they could afford the car and the lifestyle that involved suits outside of funerals, job interviews, or weddings, then they could outbid us. It was pointless to even bother with a place if they wanted it.

Traci and I worked to maintain the veneer of low-key positivity when we were at the open houses. We wanted to look like people who were there to seriously check out the property. We tried to seem like a couple who had options. We’d complain about the utter hopelessness of the search back at our apartment, when I’d rant and rave about wasting my life looking at houses we could never have, or houses that we wouldn’t want to live in even if we could afford them. But one fellow bottom-feeder, with black curly hair and a perpetual five o’clock shadow, stood out because he didn’t bother to conceal his darker emotions. He’d walk into a tiny bedroom the size of a closet and let out an exasperated sigh before saying out loud to no one in particular, “Hey look, a bedroom for our pet hobbit! Bilbo will be so happy.” A bathroom with crumbling tile would prompt a response dripping with sarcasm: “Hey, I’m in the public bathroom at the Mission Playground. Awesome!”

He became increasingly bitter as the weeks ticked off. He was giving off such a poisonous vibe that the other couples—and it was always couples, both gay and straight—maintained a five-foot buffer from him at all times. He had his own personal force field of disgruntlement. He was always with a fairly chipper woman who was his wife or girlfriend, but even she began to keep her distance. We thought he’d finally lost it at a two-unit condo that required the owner to walk through the living room of the downstairs neighbor to reach the backyard, which was considered common property shared by everyone in the building. Whoever bought this tiny place would need permission to do a little gardening or have a cookout. If that wasn’t bad enough, the two condos shared a washer and dryer. A coin-operated washer and dryer. “You’re fucking kidding me,” the voice of all our fears yelled out, desperately trying to make eye contact with someone, anyone, so that he might properly convey his rage. “I’m going to pay half a million bucks for this dump, and I’ll still have to pump quarters into the washing machine?”

The laundry room quickly cleared out. I figured the other house hunters, like me, were in a fragile emotional state, wavering between delusion (Yes, we can buy a house!) and despair (No, we can’t buy a house). Some guy shouting the obvious might send us all over the edge. We saw him the next week at a house in Noe Valley, a blandly prosperous neighborhood that was proving to be way out of our price range. He was sitting in a lawn chair on the back patio with his head in his hands. He may have been silently crying, but I didn’t want to get close enough to find out. He wasn’t even bothering to look at the houses anymore. I worried that I could end up just like him in a few weeks if I wasn’t careful.

In desperation, we finally resorted to considering a TIC, or tenancy in common, a strange bit of San Francisco real-estate exotica that involves teaming up with someone else and buying a property together. Typically, you join forces with strangers, even though you’ll be cosigning a loan with them after paying an attorney to draw up an elaborate legal document that spells out the solution to everything that could possibly go wrong with the arrangement. Of course, it’s often a very long document, a testament to all the potential pitfalls. Michelle told us she was working with another couple who was in a situation similar to ours—not enough money—and that we might be able to work something out. Traci and I met them for coffee in Dolores Park. It was like some sort of couples blind date, where we all tried to act casual despite the fact that we were deciding whether to enter together into what might be the biggest financial transaction of our lives. (Traci warned me not to discuss my love of Morrissey, an ’80s musical icon, or my propensity to scream at the referees while watching meaningless NBA regular season games on TV.) He had a British accent. She was from Ohio. They rode around the city on a scooter. They seemed normal. Hey, what else did we need?

Now we were simultaneously looking for two-unit buildings with our TIC partners and regular houses or condos for us. This was even more exhausting and somewhat awkward because we often ran into our partners at one house, indicating we might be competing against each other for it, before meeting them to look at another property that we might bid on together. None of it mattered, though. Even when we bid on TIC properties with the combined incomes of four well-educated professionals, we still got outbid.

Our housing odyssey may have been frustrating and time consuming, but it didn’t become truly weird until we connected with a sophisticated music composer from Norway and his wife, a red-haired documentary filmmaker from an equally exotic locale—Flint, Michigan. Her mother worked at the public library where I had spent countless hours goofing off in high school. Unlike most San Franciscans, who actively disdained American-made cars, she had actually ridden in a Buick, albeit years ago. They already owned a two-unit building in the Mission District and were searching for TIC partners to occupy one of the flats and become co-owners with them. We made a bid. They accepted. It seemed like fate had finally intervened in our favor. Flint synergy was flowing. Nothing could go wrong now. I was ready to crack open a Stroh’s beer, a Michigan favorite, in celebration.

All that remained was a run-through of the building with Michelle, our real-estate agent, the couple, and the housing inspector we hired. A mere formality. We were all strolling through the basement, checking out the storage space, when we came to a door with a homemade sign taped to it: “Rosa’s Room. Do Not Enter.”

“Who’s Rosa?” Michelle asked, immediately suspicious.

The couple glanced nervously at each other. A look of panic came over the face of my compatriot from Flint. She was about to speak, but her husband shook his head to silence her. “It’s really nothing,” he finally offered, stroking his beard and looking at the floor. The thick accent that had once been so endearing now made him sound like a double agent about to betray his best friend in a spy thriller. “It’s not a problem.”

The door opened suddenly and an elderly woman, clearly pissed off that we were making a racket, scowled at us. Behind her I could see a bed, a dresser, and other telltale signs of habitation. She amped up the dirty look to make sure we fathomed the depths of her displeasure and slammed the door shut.

“That was Rosa,” the composer said softly, a note of defeat in his voice.

“Is she living in there?” Michelle demanded, not softly at all.

“Well, in a way, I suppose,” he said. “But you don’t need to worry about it. We’ve got it all taken care of. It’s fine.”

“Let’s get out of here,” Michelle said to me and Traci as she turned and headed for the stairs leading out to the street. Apparently, the inspection was over.

We were about to discover a new San Francisco real-estate term, one that has killed many a promising deal in the city: “protected tenant.” Over the next few tortured days we learned that Rosa had lived in the building when the couple bought it years earlier. At one point they had attempted to get her to leave. She filed a complaint with the San Francisco Human Rights Commission and received a favorable ruling. She now had the right to live in the building as long as she wanted, a situation that not only dramatically lowered the value of the property but also opened us up to all sorts of legal entanglements if we became co-owners. Worse, as Michelle emphatically pointed out, the couple tried to hide this information from us and their real-estate agent, who quickly dropped them as clients. Not exactly the way to start off a TIC partnership. The deal was off.

“I thought Midwesterners were supposed to be wholesome and honest,” Traci said when it was clear we were headed to more open houses.

“Flint’s not really the Midwest,” I answered feebly. “Neither is Norway.”

Eventually, even my competitive spirit, stoked in the gyms and on the football fields of Flint, was overwhelmed. Traci and I decided we’d look at one more batch of houses on Sunday, then call it quits. We didn’t expect to find anything. It was more of a token gesture. We checked out a cool little place in Bernal Heights. The flyer called it a “tranquil and magical cottage!” (“Cottage” is San Francisco real-estate jargon for incredibly small.) It had fish ponds in both the well-landscaped front yard and the backyard, a privacy fence covered in climbing passion flowers and trumpet vines, and a front gate with a Zen-like copper hand from Nepal for a handle. The place was crawling with house hunters, and the list price was $519,000. Given that virtually every place we had bid on went for at least $50,000 over asking, we figured we didn’t have a chance. I wrote my name and number on the sign-in sheet just for the hell of it, and we went back to our apartment. We had put up a good fight, made a noble effort, but we were beaten. It was hopeless to keep trying. We accepted our fate. We were renters.

A few weeks later, we got a call from Michelle. The owner of the house, who was sometimes referred to as the unofficial “Mayor of Bernal Heights,” had allegedly only gotten offers from contractors who wanted to tear the house down and dramatically transform it into a McMansion. She had rehabbed the place herself, had close relationships with her neighbors, and didn’t want to see her baby become a soulless giant on a street of modest homes. She’d spotted my name on the sign-in sheet.

We wrote a syrupy letter gushing about how we fell in love with the house the moment we saw it and that we’d be honored to live in a place so lovingly restored. (We didn’t mention the $25,000 in foundation work we knew it needed, or that the “new” roof had five layers of shingles on it, or that the so-called plaster walls were really just poorly installed drywall.) I wanted to put in a low-ball offer, but after our long ordeal Michelle recommended bidding everything we had.

And it worked.

The instant we gave up trying, a house was presented to us. It made me wish we had quit six months earlier. Now all we had to do was arrange financing.

We made an early morning appointment to meet with Jimmy the mortgage broker at his office in San Jose. But it was deadline day, and Traci couldn’t show up late at the small magazine where she worked as an editor, so she dropped me off in the forlorn parking lot of a cinderblock office park, circa 1950, where Jimmy did business. I planned to walk to the university where I taught, located about a mile away, after the papers were signed.

“Is this place even open?” Traci asked after I kissed her goodbye. She was reluctant to leave me there in the parking lot. The nearby streets were clogged with early morning traffic and a greenish-yellow smog was already collecting around the distant hilltops, bolstering my theory that San Jose possessed all the unsavory attributes of Los Angeles without the glamour, money, or excitement of the movie industry.

“It’ll be fine,” I said, trying to sound confident. “I’ll call you later and let you know how it goes.”

The door to Jimmy’s office was locked, so I knocked and a secretary opened it almost instantly, startling me. I turned and waved to Traci, who was looking back at me from the edge of the parking lot, a worried expression on her face. She waved tentatively and nosed the car into traffic. Inside, the office had the feel of a fake place of business in an infomercial—a collection of bland, brand-new office furniture, a suspicious absence of papers, files, or clutter of any sort that might indicate actual work being done. It smelled like plastic. It’s the sort of office you might assemble if you had three hours to set it up. I felt like I was in a David Mamet movie, about to get conned.

The secretary picked up the phone and announced that a client had arrived. A harried-looking guy in a black suit, a red shirt, and a loud tie burst out of a nearby door. He looked a little like Conan O’Brien gone to seed. This would be Jimmy. “Hey, man, it’s too late now,” he said, his reddish hair flying around in the flurry of activity. “You snooze you lose. You were supposed to be here an hour ago.”

I had a moment of panic. I thought I was early, not late. Had I somehow ruined our chance for a house because of tardiness? “I’m Gordon Young and I thought I had a 9:30 appointment,” I said, my voice quavering.

“Oh, Gordon, yeah, yeah, yeah. Sorry about that. You’re early. I thought you were my other appointment, who’s late. Come on in.”

I glanced at the secretary and she smiled reassuringly, just the way a seasoned grifter would smile in a Mamet film. I noticed Jimmy’s face was glistening with sweat. I thought of Ralph, the responsible mortgage broker with his sober calmness and his woody, well appointed office near city hall in San Francisco. Now I was out in the sticks of San Jose dealing with shady characters. I seriously considered walking out, but I told myself that Michelle had recommended Jimmy, so he must be legitimate.

We were working our way through a stack of loan application documents that I had only a rough understanding of—Jimmy pointing and talking rapid-fire and me signing—when he let out a low groan. I looked up, and he was grimacing and clutching his chest. Sweat dripped off his chin. I have to admit that my first thought was selfish annoyance: Don’t have a heart attack now, you inconsiderate bastard! I’ll have to find another mortgage broker. But my humanity overrode my lust for home ownership. “Jimmy, are you all right?” I asked, standing up and putting my hand on his shoulder. “Should I call 911?”

He offered up a weak smile and shook his head. “No, it’s okay,” he gasped. “This happens all the time. It’s just acid reflux.” He pointed to another spot with his free hand, the one not planted on his sternum. “Just initial here,” he croaked. His face was still contorted, like a marathon runner toughing out that last five hundred yards before the finish line. I would have signed anything at that point just to get out of there. We finally finished up, and Jimmy rose unsteadily to his feet. He offered his hand, which was wet and clammy. “Piece o’ cake,” he said. “I’ll be in touch when I hear back from the lender.”

I stepped outside into the nearly empty parking lot. I heard the door click behind me, no doubt the secretary locking it. I imagined Jimmy and the secretary celebrating, like Paul Newman and Robert Redford in that scene from The Sting when they pull off their big scam. I told myself not to be so paranoid. With the bright California sun shining down on me, I wiped my hand, still slick with Jimmy’s sweat, on my pant leg. I was one step closer to home ownership.

In the end, Ralph and Jimmy were both right. It was not a sound financial move for us to buy a house in San Francisco, but that didn’t mean we couldn’t get a loan to do it anyway. We moved into our new home shortly before the Thanksgiving holiday in 2004. Sergio, our big cat, inspected the place while Traci and I stood in the living room holding hands. He cautiously sniffed every corner, then calmly turned and sprayed a wall in the living room. He was marking his new territory. Thus, our first truly domestic act as new homeowners was screaming at the cat and mopping up pee. Too late to back out now.

We were surfing a wave of dubious, if not toxic, mortgages that would eventually help bring the world financial market to its knees. At least the lender bothered to verify our incomes, an annoying step that many would eventually dispense with altogether. But Traci and I certainly had a financing package that would have made my grandfather shake his head in disgust. No money down. An interest-only adjustable first mortgage for $446,000 with a low teaser rate that would balloon after two years, plus a second home equity loan at 7.25 percent that was instantly maxed out at $105,000. The plan was for the property to appreciate on paper enough for us to refinance before the two years were up. The $25,000 that would have traditionally been part of the down payment went toward shoring up the foundation of our magical unicorn cottage where fairy sprites danced on the banks of the fish ponds, which almost immediately began to crumble, the picturesque river stones sliding into the murky water to reveal the black plastic liner beneath them. Discolored drywall chipped off the bedroom walls because that section of the house was rotting from the ground up, a result of the foundation problems.

Every few months we’d get a letter in the mail announcing that our mortgage had been sold or that a new servicer would be collecting payment on the loans. There was Aurora Financial Group, CitiMortgage, Sierra Pacific, and a highly reputable outfit called No Red Tape Mortgage. I’m leaving out a few others because I lost track of them all after a while. But our original plan did come to fruition. In May of 2006 our house was reappraised at $705,000, which just happened to be the exact value we needed to get a new thirty-year fixed rate mortgage serviced by Wells Fargo Bank, albeit one with a ten-year interest-only grace period before the real payments kicked in. The appraiser who somehow hit that magic number was hired and compensated by our new mortgage broker, named Justin, also suggested by Michelle. (Jimmy was apparently no longer in the picture; I imagined him singing songs like “Poison Ivy” in the lounge of a casino in downtown Las Vegas, slugging Maalox before he went on stage, hoping to land a better gig on the strip.) The appraiser knew exactly the valuation Justin needed to make the new loan work, but I’m sure that didn’t influence him in any way.

So we had lucked out. I guess. We had managed to buy just before prices climbed out of our reach. And we had a locked-in rate of 6.625 percent, which was higher than the prevailing rate because this was considered a jumbo loan. The good news was that we didn’t have to worry about the interest rate skyrocketing when a teaser rate expired. The bad news was that we had an interest-only monthly payment of about $3,050, which was more than half our take-home pay, without making a dent in the principal. Don’t forget the $600 a month to cover taxes and insurance, not to mention the maintenance costs. Basically, we were in the very situation that my grandfather would have cautioned us to avoid at all costs.

Traci and I altered our lifestyles in accordance with the financial demands of home ownership. Despite the rainy winters and the chilly fog of the so-called summers in San Francisco, we rarely turned on the heat in our house. Eating at the city’s famed restaurants became as rare as making a deposit to our IRAs. Our fleet of luxury cars—my aging Camry and Traci’s banged-up Hyundai Elantra—would not be upgraded anytime soon.

This wasn’t a huge adjustment for me. Despite frequent bailouts from my grandparents, I’d grown up in a household in Flint constantly in the throes of financial crisis. A minor repair to one of our unreliable GM cars was a calamitous event. I learned early on how to misdirect bill collectors when they called our house, often employing a fake British accent. We regularly ate breakfast for dinner—pancakes, bacon and eggs, or waffles—when money was especially tight. I knew how to live on the cheap. Although Traci had grown up in a more financially stable family in the scenic San Juan Islands north of Seattle, she adjusted to this new age of frugality. But there was no denying that buying a house in San Francisco put an end to many of the tangible benefits of living in one of America’s greatest cities. At least the spectacular views in the City by the Bay were still free.