Lindsey Sargent, homeownership program director for Homestead Community Land Trust, stands in front of a Highland Park home the non-profit group recently purchased with plans to give it a good renovation and sell it to a modest-income family at a low price.
Flipping West Seattle homes for families, not profits
The For Sale sign posted in front of the Solid Craftsmen-style home on the 1000 block of S.W. Portland St. in Highland Park appears, at a glance, like any other.
Closer inspection reveals the home is being sold by Homestead Community Land Trust at the fair price of $145,000 – at least several thousand below the value of surrounding homes (according to Zillow). Take a peek at the details in the flyer holder attached to the sign post and some jaws might drop:
“Will be Fully Rehabbed w/ over $90,000 in Upgrades: New Kitchen, New Flooring, New Bathroom Fixtures, New Energy Efficient Appliances.”
Not a bad deal, and with a little sweat equity it can get even better to the tune of $15,000 knocked off the asking price and no need for a down payment.
Homestead is a Seattle-based non-profit in their 20th year that buys distressed properties from banks and rehabilitates them with the intent to sell to “modest-income homebuyers for very affordable prices,” according to their literature. The idea is those homes stay with modest-income families over their lives. If one family decides to sell, they have to agree to do so at an affordable rate (even if surrounding values have gone way up over time).
“People can afford to live here,” Homeownership Program Director Lindsey Sargent said while inspecting one of their recently purchased West Seattle homes on 18th Ave S.W. They expect it to be appraised for $225,000 once their refurbishments are done, but will set the selling price at $125,000 with a down payment of $2,500.
“When you have a home you are able to put down roots, your kids are not changing schools every year, you are commuting less because you don’t have to live in Auburn: you can actually afford to live in Seattle where you work, you can participate in your community … all of those things that come along with home ownership. As a renter, you don’t get that same security.”
Sargent said Seattle’s housing levy (aka your tax dollars) is critical to their mission, as the city’s Office of Housing allows Homestead to borrow unspent levy funds as a line of credit to acquire homes.
“Without this line of credit from them, we would not be able to do what we are doing,” she said.
The homes are generally foreclosures or short sales, sometimes in serious states of disrepair. That’s where Homestead’s Construction Manager John Daoura comes in. If a family contacts Homestead, qualifies for their requirements and can qualify for a home loan from a lender, they have a decision to make: Daoura will either set up contractors to make the improvements (paid for by Homestead), or if the new owner is willing to put in that sweat equity mentioned earlier, Homestead works with Habitat for Humanity. The homeowner agrees to put in 100 hours of labor alongside a HfH work crew in return for $15,000 off the home price and no down payment
Both Sargent and Daoura come from the “for profit” world of their respective fields. Sargent has a background in mortgage and real estate while Daoura was recently building homes for millionaires. They both said the transition (by choice for Sargent, forced by layoffs for Daoura) into helping deserving families’ buy a home has been has been a good change.
“It’s an opposite negotiation,” Sargent said of the process once a family contacts Homestead. Instead of maxing out the sale price to max out their cut, she said Homestead employees do everything they can to help buyers drive their price down.
“We are seeing the housing markets crashing but families still, even in the recession, aren’t able to afford Seattle real estate prices and a lot of the properties coming on the market are in really poor condition,” Sargent said. “ … People say, ‘It’s a great time to buy,’ but really, for a lot of people, there are a lot of hurdles to get over.”
And that’s where Homestead hopes to help out.
To learn more about Homestead Community Land Trust, visit their website at http://www.homesteadclt.org/.