Being the 1% — Our Blue Tarp Cottage?



I love buying a house that no one else wants, but in a spot that everyone would love to live in.  During the last recession, we were aggressive investors in real estate.  It helped tremendously that we were cash buyers, so this gave us a tremendous advantage when making offers to banks.  After the recession ended, it’s definitely gotten progressively harder to find the “diamonds in the rough” but we still could find them.  I love to buy distressed property on water.  Doesn’t everyone loves a house on a lake, river or pond?  There’s always something relaxing about gazing over the western horizon as the sun sets over the beautiful water.

Some History

A few years ago, we were looking for lake property.  Wouldn’t be great to be FIRE with your very own lake front home to go to in the summer?  I was getting daily feeds on lake front property and one day I found the “diamond in the rough” I was looking for. I grabbed Mrs. FiredUp and we went for a drive.  After an hours drive we arrived to a gorgeous spot in the middle of 3500 acres of a state recreation area north of Detroit.  

Where’s the House?

This house was not your normal house that 99% of the population seeks.  First, we had a very difficult time even finding this house. When we got to the address, there was no house to be found.  After driving past where the house should have been, several times, I got out of the car and started walking.  You see, this property had many things that prevented your normal retail buyer from even finding the house or even being remotely interested.  After walking around like fool for a bit, I decided to take a walk to what I thought was vacant property and look down to the lake – about 20 feet below the road. That is when I saw it — a big beautiful blue tarp! That blue tarp shined like a gold piece of jewelry in my hand. 

During the recession some banks would tarp the homes whether they needed it or not.

The neighbors came to see us while we viewed the property.  After they became comfortable with us, they began to share details with us that were very valuable in our assessment of this property.  We learned about what the previous owner had done to the property and that the well and septic system were in working order.  They also told us that the local municipality assigned an address to the property that was out of sequence with the other houses on this road, another barrier to finding the property.

We walked down the 26 steps to the house on the lake and found our diamond in the rough.  We looked through the windows and found a home that someone had put some serious money into rehabbing.  It seems the previous owner took out a big loan to put in a new kitchen, new master bathroom, huge new deck and other features any new owner would love.  Mrs. FiredUp and I sat on the deck staring at the sunset on that beautiful, serene lake  and decided this was an opportunity we needed to pursue. 

Actual photo of our sunset views

The Close

Well what about the big blue tarp, you ask?  After calling the real estate agent, we got a tour and found no evidence inside the house of a roof leak. I climbed into the attic and found zero evidence of roof leak.  We got on the roof and pealed back some of the tarp to find a roof that definitely needed to be replaced.  Our inspection found some other minor items that needed to be addressed, but definitely nothing that revealed a need for major repair.  So, we made our generous cash offer, and secured the home.  We put less than $5000 into the home to replace the roof and finish the semi-finished master bath. 

The Point of This Story…

This home did not appeal to 99% of prospective buyers, nearly all of which would not open the door to their car and start walking the road to figure where the house was, but Mrs. FiredUp and I put in a little extra effort, a little bit more time, and a little bit more repair work than 99% of people are willing and able to do. Our investment is 300-400% more valuable today than our total invested capital.  The same goes for reaching FIRE status. The difference between those that do, and those who do not, is very little.  Those of us who make the small amount of extra effort and focus to reach FIRE status are willing to open the door and take a short walk to secure opportunity.

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