Are You Sure You Really Want to Buy a Fixer in Key West? - Revisited

A nice middle aged couple from Georgia walked into my office last week and said they loved Key West and asked to discuss housing prices here. I asked if they were familiar with prices in the slightest and they said no. I explained our houses are very expensive. The gent said he would prefer to buy a place that he could renovate and create exactly what he wanted rather than to buy a place renovated to some other person's standards. So I did an MLS search and showed them what was available starting at the lowest price point. It wasn't until we got in the $1.5 million range that they saw anything that appealed to them.  Again, he was looking for a fixer and not a finished home.

This reminded me of a blog I wrote in December 2014 copied below. As I looked through the photos I noted several of the houses which are shown in photographs were later renovated and re-sold to buyers from across America.

A few days ago I wrote about a very beautiful home in the Casa Marina Area of Key West. It's priced pretty high because it is very special. We have a lot of special homes in Key West. Most of our houses are expensive compared to other parts of the country, and some are much more expensive than others. We have many smaller places that still come at high prices considering their small size. Many of the buyers I work with say they are willing to do a little work to buy a place that is more affordable. They think they can buy a place that's a bit less expensive, do some of the work themselves, and thereby save a lot of money. I was rooting thru my shoebox and found some photos of places that were fixers. I thought I'd share some pics that show how the other half of Key West lives - the half that primarily live in rental houses offered for sale. .

I showed the house at the top of today's blog several years ago to a gent who was thinking about buying a fixer. This little two story located on Frances Street in Old Town was priced right. We went inside and found the place in pretty much a disarray. There were old brown grocery bags everywhere. Piles of clothes and stacks of newspapers and magazine were stacked and strewn everywhere. The lady of the house invited us to go up to the second floor. My buyer started to climb the stairs and turned around to tell me the place smelled horrible. I softly said to hold your breath and move quickly. He hurried up, turned around, and hurried down.  He didn't buy it. Someone did. The place needed much more than piles of debris to be removed. The house was basically torn apart and totally rebuilt.

This house had a combination kitchen and bath in one room and in one place. The bedroom and living room were every bit as pretty.

The tenant here had moved out. I don't know why. The color scheme was so Key Westie. The living room had a big hole in the wall.

Some places lack closets and storage places. Tenants must improvise. There was an illegal rental at the rear. Two older men shared the bedroom space in single beds. Neither spoke English. I think a total of six or seven non-related and probably non-Americans lived in this property.

Tenant in this house created a way for his dog to get outside to do his business.

Putting on the Ritz!

A little clutter never hurts anybody.

The tenant left after he did this. Tenants burning down a house is Key West is not uncommon.

This is a two-part post. The above picture is of a child's bedroom at the golf course. The picture below is the same house. It shows a picture of termites eating their way through the house. This was at the Key West golf course.

The tenant here took not only all of the appliances but also all of the kitchen cabinets, ceiling fans, and about anything else of value. The owner had put in new kitchen cabinets and appliances, new bath fixtures, light fixtures, and fans. All went away when the tenant left.

The "second bedroom" some Realtor as described by a listing real estate agent. I have seen several where you need to access this "bedroom" by climbing a ladder. I have even written about places like this. I point these things out. I ask you: what moron would spend half a million dollars or more to buy a place that you need to climb a ladder to go to bed. Think about it. If you get sick or need to go to the bathroom in the middle of the night you gotta climb down a ladder. Consider the cost and amount of real floor space you need to take up creating a stairway to space like this.

The above loft space probably adds nothing to this otherwise cute cigar maker cottage that already had a pool and a very large backyard that offered potential room for expansion. I showed this place several times. Buyers focused on the loft and super small bedroom off the kitchen and missed the bigger picture of how really cute this place could become if the rooms were modified and the kitchen rebuilt. I see buyers that fixate on the negatives and who often overlook real potential.

This place was priced right but offered challenges a lot of buyers could not embrace. It was located less than 100 feet from Truman Avenue and close to a gym. It had a neighbors on either side who properties that were not well maintained. It had a spiral staircase and late 1980s or early 1990s interiors. The spiral staircase lead to a second level loft that was actually quite large. The house had a pool and off street parking. You will see this place in an upcoming blog.

The above photo shows the living room and kitchen of one of two apartments that were a part of a larger Casa Marina Area home that had a large pool. The income from the apartments pays taxes and insurance for the owner. If you cherish your privacy buying a place with built-in tenants may not be your cuppa tea. But if you don't mind the occasional tenant who forgets to pay his rent until the 14th day of the month, a place with a rental might work out for you. Not all tenants are bad. And certainly not are all good.

Sometimes some owners convert legal spaces into rental units that the city is not aware of. There is a difference in owning a legal rental and a non-legal one. I won't give any reader legal advice on the efficacy of owning and renting an illegal rental unit other than to say if you get caught, you are in trouble. More than that, however, is the fact that converted spaces are often neither well conceived nor executed.

The real bad boy in the above photo is not the missing fascia but instead is the concrete spalling on both sides of this house. Spalling is the visible deterioration of concrete whether it is cracking, flaking, or pitting. The above photo shows cracking. What cannot be seen is the more probable corrosion of iron rebar inside the concrete. Spalling repairs can be very expensive.

The new owner of this previously bank owned property ultimately decided to take the house down rather than to fix the spalling. I tell people all the time that just because a property is bank owned does not mean that it is a "deal". There is often a reason properties become bank owned and that is that there is an underlying problem with the house that makes them very, very difficult to sell. Buying at a cheap price is not indicative of getting a good deal if you have spend oodles of new money to fix something or to build new unless the new property is worth a whole lotta money.

I showed this apartment multiple times but I only went inside this space twice that I remember. I do remember the smell of the huge dog that lived and crapped in this place. I don't have any idea why a landlord would allow some moron to have a big dog in such a small apartment.

See the black cat on the bed? You would not believe the odor that cat left in this otherwise really nice apartment. If you buy a place with cat pee smell, you may very well have to remove the wood or tile floors to eliminate the odor.

What do you expect for $1500.00 a month for a one bedroom apartment like this? A lot of people do. Rent in Key West is very expensive.

Tenant came home late one night. Fell asleep. Burned the house. Killed her dog. House torn down.

I knew the couple who lived here. She was an administrator at a public facility. He was a carpenter. I had no idea they were such slobs. Not one straight line in this house. This became bank owned. I had a young couple that thought about buying it. I told them they would be pouring money down the drain. I may have been wrong, but I doubt it. I think most houses can be fixed but is the price worth it, especially if the city won't let you add a pool or if you cannot create off street parking.

Three pic series below. Big house in Old Town. Very good location.

Photos show the master bedroom, guest bedroom, and dead pets on floor in one single house. The stains on the bed were from unwashed sheets. Can you imagine living in that filth - sleeping across the hall from a roof filled with caged animals with poop all over the floor?

Alive and kicking in this little house just a couple of blocks from Duval Street.

Lame swag drapes in a rather cramped bedroom in Old Town.

I can still remember the stench of dog pee and poop from this once grand Old Town house. Two old ladies lived in this mess oblivious to the odor or the mess. It was truly like something out of a movie.

This house sat on a very large lot on a small Old Town lane. The owner lived there with his teenage daughter.

This place was a bit out of the ordinary. It was a Key West funeral home and licensed contractor shop.  I have no idea what went down that drain.

The pool at this Old Town property needed a little work.

The tenant in this third floor walk-up applied some creative paint treatments throughout the apart. You can tell the really adored the color blood red.This is why you need a deposit. However, I really doubt any deposit could repair the damage this tenant created.

This is the second floor bathroom in a golf course home. Lots of termites in this place that sat vacant for a couple of year.

The smell of mold was so bad in this place that I had to run out of the place to catch my breath. I eventually had to go back inside to lock the doors. Somebody bought this place.

There are many nice places where local owners and renters live that could be improved. The above apartment was super clean and tidy. It was smallish, but that kind of space often works well for single people who do not need big spaces. The potential problem for a new owner who wants to make a space like this "his own" is that a small house is a small house is a small house that is often located on a very small lot with little or no room to increase the size of the house.

The photo above is not a rental but it is representative of an issue all buyers may face and buyers that purchase a fixer property need to understand before they buy a house. This photo shows an old cut pier that supports an historic house. You can see how a wood wedge was driven into place to help support the floor joist. The reasons so many old houses have faulty flooring is that the piers have failed.  Replacing piers can be very expensive - very expensive.  Do fixing is often much more than adding new kitchen cabinets and light fixtures.

Sometimes some locations can be challenging. The top photos shows Bare Assets on Truman Avenue. I point out the location whenever I show a place near there. The guys always know what goes on inside. Consider locations near schools and restaurants. Schools often have the sounds of kids playing during the daytime. If children laughing bothers you, don't buy a place near a school or daycare facility. Some of the more interesting views come from the Bahama Village area which is located by several landmarks such as the old lighthouse.

I have watched a lot of TV shows on HGTV and other networks that make it look like redoing an old house is easy. It is not. And it is not easy in Key West where we have often have multiple layers of governmental bureaucracy to deal with.   Renovations are not for the poor nor the faint of heart.

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11 Nassau Lane, Key West - Open House

Come sit a spell with me at my open house.   

11 Nassau Lane in Old Town Key West. I will be there between 12:00 to 2:00 PM. 

The 2 bedroom 2 bath cottage home was built circa 1860 and has all the charm one can hope for in an historic home.

The master bedroom with ensuite is located on the second floor. It's about as charming as a little love nest you will find in Key West. French doors open out to the rear covered porch. It's the perfect perch to reflect upon how lucky you are to live in Key West.

The garden wraps around the north side of the house all the way to the rear. There is room for a pool but you may choose to keep it as simple as it is today. 

Nassau Lane is located just off Fleming Street between Grinnell and Frances Streets. You'll know 11 Nassau Lane as soon as you get near. It is as charming as I promise. I promise. Offered at $849,000.

Key West Real Estate Sales Report 2018

It is that time of year to look back to take a look at Key West real estate sales for 2018.  As in years past I only look at real estate sales in Key West and this year I did not venture off the island even as far as Stock Island or the golf course. I did, however, include the couple of sales on Sunset Key.

We started the 2018 real estate sales year not knowing how the buying public would respond to the prospect of buying a home in Key West after all the damage Hurricane IRMA inflicted on the Lower Keys. TV broadcasts from CNN and NBC painted a bleak picture of the hurricane damaged Keys. Follow-up broadcast by NBC mistakenly implied that Key West was equally impacted as other areas. In fact only one house in Old Town was lost as a result of Irma. I think owner opted to build a new house rather than repair the damaged one.

I do know we had significant tree damage. We lost a lot of canopy trees. The Key West skyline looked barren for a month or so after Irma. But then the trees started to regenerate their leaves. The Royal Poincianas which bloom in May and June had a second bloom in late October or November. The Mahoganies sprouted odd looking clusters of leaves. In January 2019 all the trees look normal once again.

Tourists came back to Key West for Fantasy Fest and later Christmas in 2017. I spoke to many people who were both surprised Key West had been spared any significant home damage. There remained a lingering belief that Key West had been hit by Irma even though that wasn't really the case. More tourists came and spread the word Key West was okay. By Christmas 2018 the Key West tourist rush was bigger than ever.  Because so many Lower Keys locals lost their homes in Irma, many bought up the inventory of lower and mid-range priced homes. Some of those sales closed in late 2017 and continued into 2018. Those sales nudged housing prices up.

There were a total of 302 single family home sales in Key West in 2018 at an average sold price of $1,009,739 or $635 per sq ft. I thought it would be interesting to compare 2013 real estate sales to 2018. We had 257 single family home sales in 2013 with an average sales price of $709,605 at $411 per sq ft.

The least expensive home sold in 2018 was located at 313 Catherine Street in Bahama Village section of Old Town. It was a 365 sq ft one bedroom which the listing agent described as an "artist's retreat". It sold for $299,000 at $819 per sq ft. See photo below.

The most expensive home that sold was located at 908 Fleming Street. It sold for $5,000,000. The house and other buildings totaled 2,560 square feet and sat on an 18,383 square foot lot. See photo below which shows the Polynesian style open dining area and outdoor kitchen located in a separate structure away from the main house.

The 908 Fleming property had separate guest cottages located at 515-517 Margaret Street  which sold to a separate buyer for $1,340,000 or $827 per sq ft.  See photo below. 

My experience has been that most of the sales in Old Town are not for primary residences but instead as second or third homes. There were 113 single family homes sold in Old Town in 2018 for an average price of  $1,248,225 or $798 per sq ft. Compare that to 2013 where there were 114 single family sales in 2013 with an average sales price of $798,684 or per foot price of $513.

The second most popular area for second home buyers is the Casa Marina Area which is that section of town located south of United Street between White Street to the east and ending at the Reach Resort on Vernon Street (location of Louie's Backyard and Dog Beach). The Atlantic Ocean is the southern boundary of the Casa Marina Area. Most homes in this area sit on large lots of 5,000 sq ft or larger and are newer in construction and often larger in size than homes in Old Town.

There were 24 single family home sales in the Casa Marina in 2018. The average home sale was priced at $1,310,646 or $678 per sq ft. By comparison there were 9 single family home sales in 2013 with an average sold price of $1,450,111 or $650 per sq ft.  The east expensive sale in 2018 was a bank foreclosed property at 1314 Whalton Street which sold for $420,000. That building was taken down where footings for a home have been poured. 1000 Johnson Street was the most expensive home that sold at $3,000,000 which equates to $755 per sq ft for this 3971 sq ft home on an 11,450 sq ft lot. See photos below of Whalton and Johnson properties in that order.

I moved to the Casa Marina Area in 1995 and have lived in the same home since. I have watched most of the houses being renovated and saw a few come down and new ones built. The property values continue to rise. The air is still fresh and the skies sunny throughout most of the year. It is a good place to live. 

If you are thinking about buying a home in Key West and do not have a Realtor, please consider contacting me, Gary Thomas, 305-766-2642. I am a buyers agent and a full time Realtor at Preferred Properties Key West.

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