Amanda Kovattana

Middle-aged musings in interesting times

Saturday, November 14, 2009

Land Ho!

Informed by the flip flopped perspective of Asia, I see a new purpose and direction as I re-asses the changed landscape at home following the economic meltdown in the wake of the housing bubble.

Meltdown Case Study

A client called me to refer me to a woman who desperately needed my help. We went to see her together since she was working with the lady through the social services agency where she was a volunteer. We found the door ajar, knocked and waited a good15 minutes. When she finally did come to the door she was gracious and willing, invited us in and introduced us to her bedridden husband in the back bedroom, then seated us in the living room to tell her story.

"We used to be millionaires, but now we're negative $1500," she didn't mind telling me. Her husband had made those millions investing in real estate. Now she was mad at him because he made one deal too many with no safety margins to protect what they needed to live on and, of course, their stocks were down too. And then he had hip surgery that went awry and when her son lost his job at Circuit City, said son decided it was a sign from God to give him the time to save his father. He moved into their two-bedroom condo to look after him then proceeded to order his mother to do his bidding. He was able to claim this role because he was liquidating his 401K to keep them afloat.

Since he had made himself scarce for this appointment with me, I knew there was little chance that he would agree to hire me to help his mother organize the many boxes in the shower that had to be put somewhere when he insisted that they close out one of their storage units.

Getting organized was not this family's biggest problem, I realized. They needed family therapy.

"Everyone just needs to be kinder to each other," I commented sympathetically. She nodded, grateful that I understood the situation.

I was seeing America's real estate meltdown, up close and personal, for this was just one example of many such stories of lost wealth, only instead of being on paper, as in the last boom/bust, now the losses were striking closer to home, at the home itself. For the home was the last asset to be played.

Inspired by the belief that housing prices could only go up, husbands had made deals that had taken them beyond a threshold normally considered safe. And just as with other bubbles, investors were refusing to call it quits because they had lost so much already and were blind to the new reality. Pride turned into bad judgment and humiliation turned into abuse of those closest to them. Wives, in turn, were mad at their husbands for not telling them they had hocked the house. Like Napoleon, refusing to retreat, these investors would play out this loosing battle until they ran out of resources.

My prospective client had been informed by social services that she had the option of putting her husband in a public subsidized nursing home, should caring for him become too much for her, but the state would take away all their assets leaving her with a $600 a month social security check to live on. Did she have any relatives who would take her in?

In this genteel lady's eyes, asking for such help was unthinkable. She had for so long been the generous one. She told us of her struggle to keep her faith and her love for her husband, rather than toss him to the state. All I could tell her was that if she felt that my help would insure her sanity, she would have to prevail upon her son to let her hire me.

When it was way past time to go, I let her give me a big hug for coming by. Then she pressed a handful of candy in my hands from a dish by the door. I knew I would never see her again unless I too became a volunteer.

Taking Stock

Transitions are all about changing one's roles, relationships, routines and assumptions I was to learn, the following week, at a talk given by a dynamic woman old enough to have seen a few. I was already looking at changing mine. My business-networking group booked speakers who were telling us to market harder, that the best would survive. I found this to be as useful as the report from Wall Street that the nation was experiencing a jobless recovery. I was not going to beat a dead horse with more marketing. If there were too few jobs for organizers maybe it was time to do something else. But it was also time to assess my own assumptions.

When I returned from my three-week trip to Asia my perspective sat on shifting ground. My last project had been to build a small boat, chiefly for recreational purposes, but also because I felt it might be a useful skill to have. When food shortages made fishing useful, a boat would be sought after, not to mention when the sea level rose. As a dedicated doomster, this was in keeping with doomster culture thinking. But after traveling, for three weeks by plane in the undeniable reality of Asia's urban pursuit of development, ten years after it's own economic collapse, this guiding principle of preparing for the end of the world as we know it seemed a trifle silly or at least ahead of itself.

Asia had experienced a temporary halting after their economic disaster and I was gratified to see proof of this on the outskirts of the city. Blocks upon blocks of empty condos stretched down what was supposed to have been a busy downtown center never realized. Not even the homeless wanted to squat in them without electricity to power air conditioners. Oddly enough, across the street, businesses continued, shop fronts were occupied and customers were going in and out. The end of the world had not managed to reach across the street. In the rest of the city things had definitely moved on.

There was no such thing as "the end of the world as we know it," I concluded. That implied an event forcing change that everyone agreed upon, much as we would respond (or not respond) to a hurricane. We could not even recognize the changes already upon us, so who exactly was going to name "the end of the world as we know it," in order to respond to it appropriately? We were still playing by the old rules.

The End of the World Postponed

I decided to abandon my preparations for the end of the world as inspired by thoughts of eco apocalypse. This left me somewhat at sea as to where to focus my life, and I was sifting through suggestions waiting for one to stick. My only requirement was that it would involve the help of others and would connect me to community. Even better, if it was a paying gig.

I considered writing another book—tales from the life of an organizer. I would try out the idea at my next conference with my organizing colleagues. I loved conferences—the extended family atmosphere of all of us living together in a hotel, eating every meal together discussing our adventures of that year and new ventures for the next.

Two weeks before conference an old friend from high school posted, to her Facebook wall, a real estate listing for a property in San Bernadino. Anne and her lover had left their careers as university professors and remade themselves into investment property gurus two years ago. Investment property, unlike the internet stocks I had lost my shirt on 8 years ago, still had brick and board value even after a bubble. San Bernardino was within driving distance of my conference hotel. Why not have a look?

The two met me at the airport. I had not seen Anne in 21 years; we had, in our college years, had quite an intense correspondence by mail, picked up again last year when she Googled me. It was enough of a history that I could trust her to help me with something I knew nothing about and didn't want to fathom i.e.: the bureaucratic legalese of owning property. I asked them how they had come to wrap their minds around the responsibilities involved. They told me of classes offered. Then Susan plunged in, set it up.

"It's not something you should over think," Anne said finally. This was comforting coming from Anne, an inveterate over thinker last I knew her.

Falling In Love Again

And thus I found myself in a not unfamiliar California town outside of LA looking at two houses on a lot with a mountain range behind it that made me feel a modicum of certainty I hadn't felt in a long time. I was sizing up the landscape the way I used to size up a potential lover. A minimum of criteria fulfilled, a pleasing arrangement of features, some homely aspects that hijacked outright beauty but introduced quirky interest and a stimulating element of risk and danger that would make the journey interesting and transformative.

And she was available; made available to me by a very low price ($100,000) and a line of credit, not mine, but Catherine's. Catherine, who thinks of these things, while I just try to get by day to day. She had long wanted us to strengthen our relationship by staking out an income producing future. She had taken out the line of credit because it seemed like a good idea in uncertain times. I had ignored the move. To me, borrowing money was not a viable solution; being debt free with savings was the way to go. Luckily we had been improving our communication skills with an intelligent therapist so could broach the topic without fear. When Catherine saw how interested I was in this property as a rental, she offered to help me. Borrowing to buy something that produced income did make sense to me.

I had experience with fixing up property and had managed property, of a similar low-income nature, for a client. Catherine was tenacious at follow through and had an appetite for financial strategy. It was the right time. And we would be smart about it, think things through, play to our strengths. She trusted my judgment. She was willing to put her money down just on my assessment alone. It would be my baby.

I had first been attracted to the property because of the two houses on a large lot, much like a compound in Thailand. And the houses were small with two bedrooms, not the super-sized, cathedral ceilinged houses, of the last decade that would soon prove an energy sucking liability. And though the location seemed quite rural, it had the one enviable municipal service in a suburb—a rail system. You could get to downtown LA in 90 minutes, 60 minutes to outlying industry.

We got out at a quiet street lined with cyclone fencing. The agent, in her high heels and black Lexus, was already there to meet us . Stepping over the threshold into the first house on the property, I stooped to touch the new ceramic tile floor, surprised that it was not vinyl. Otherwise, the stucco house was much the same as when it was built in 1939. It was, in fact, exactly the same vintage as one I had lived in with friends 20 years ago, where I had, in fact, last seen Anne. But I was not thinking about those years now. I was struck by how shabby the house was. It had been a long time since I had lived in a rental.

"Do people really like this," I asked Anne. "I mean I like it, but do other people?" Yeah they did, enough to want to live in it.

The small kitchen had the same tile on the counter as the one I had lived in only with cream tiles and a black border plus a thin line of red across the back. It was, I would later find out, a classic American Bungalow kitchen.

The second house had a kitchen with the metal edged Formica counters of the 40s. The wood cabinets would need painting. There was a drawer missing. This house, too, had a floor newly tiled, but otherwise no other improvements thus none of the improvements I had grown to despise. No garbage disposals to break down when it wasn't robbing the compost heap. No recessed lighting to vent heated air wastefully into the attic while swallowing up half the light of the bulb. No laminated particle board cabinets with overbuilt European hinges. No dishwasher. In fact no appliances at all, for they had gone missing along with the outdoor light fixtures.

It was, I could see, from the iron security gates on the doors, a moderately high crime area. That was the dangerous part though I did not see any young men cruising by in low riders that I had come to expect while driving through low rent areas in the Bay Area. There was no one on the street at all, just parked vans and pick-up trucks in better condition than the housing—a classic working class California neighborhood. The cyclone fencing was the homely part. The burned out lawn, awaiting my transformation to something more sustainable. Behind the town, the natural beauty of those majestic mountains crisp against a blue sky. That they would always be there comforted me.

I asked the questions Catherine had me write down. Were there any major repairs to be done such as a roof in need of replacement? Nope. Updated electrical? Check. Plumbing? Adequate. Industrial pollution. No. Was there graffiti? Well, only if you counted what was expertly riffed on the cement wall inside the garage. An ad hoc practice studio for a young gang member perhaps.

Was it likely that the property would be rented again? Yes.

It was something of a no brainer. We could improve it without even trying. The last time it had been sold it had been for nearly four times the price. Each house had more land than we had at our own house. The area had once been farmland. I told the agent to write it up. By evening I would be in love with my quirky, homely, beauty, eager to begin her transformation.

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