The Barn House (8 page)

Others were less so. It was all very well to profess a commitment to doing things right, but often I found myself having only a general idea what the right way was. This is a matter to which I'll return throughout this book, and in which I invested a great deal of time and thought. Even so I may as well confess that more than a few times we whiffed. I don't want to get too far ahead of my story, but perhaps the following observations won't ruin the suspense:

Notwithstanding these minor matters, planning the work on the house, from an architectural standpoint at least, presented no great difficulty. The real challenge was coming up with the money to pay for it.

P
eriodically in life one encounters things that are far more complicated than by rights they ought to be. Childbirth is one. I'm surely not the first person to think during the climactic moments of this supposedly joyous event:
This is the most idiotic way to reproduce a species I've ever heard of.
It is, after all, a basic biological process. It's had billions of years to evolve. You'd think by now we'd have worked up something involving ziplock bags, foam peanuts, and piped-in Mozart. But no. Instead we have buckets of blood, excruciating pain, and moronic medical residents, not to mention a non-negligible chance of deformity and death, all in an effort to squeeze an eight-pound sack through an aperture that can comfortably accommodate a jumbo frank.

I'm not claiming that financing the renovation of an old city house is in the same league with childbirth, agony-wise. But there are definite points of similarity. The pointless aggravation. (If you flunk the medical-resident admissions test, rest assured there's a place for you in the bank department in charge of dreaming up loan documentation requirements.) The endless waiting. The constant threat that all will end in disaster.

The thing was, at the time we acquired the Barn House, we were doing something normal people didn't do—we were taking a decrepit house in a declining city and fixing it up, in contrast to the usual American practice of moving to the edge of settlement and starting from scratch. Confronted with such an eccentric act, those in the business of lending money were taking no chances. Don't misunderstand; it's not that no one had ever requested a loan to rehabilitate an old city house. Indeed, so many had gone before us that at financial institutions specializing in home improvement loans for city houses a well-defined process had evolved. Up to a point it made sense.

Here's how it worked. One started with the house. It perhaps was in need of repairs, but it was more or less intact; a price had been struck for it, and a mortgage loan obtained. Very well; that was the bedrock upon which all else relied. One then needed to obtain a construction loan to pay for the renovation, and upon completion of the work, a final mortgage that paid off both the original mortgage and the construction loan and provided long-term financing for the finished house. It seemed simple, and in outline it was; but it entailed a hundred intricate steps as rigidly prescribed as a Japanese Noh drama. Certain acts had to be accomplished in a certain order. To deviate from the script in the smallest detail was to invite catastrophe. We knew one couple who attempted to obtain a construction loan after interior demolition was under way—a fatal error. They'd failed to confirm their home's baseline value; their loan application was rejected.

The house's value was the key thing, you see. At the outset this figure could be confidently stated—that is, the price you just paid. One then proposed to take the house, a sagging but patently saleable commodity, and demolish large parts of it. To a degree this was true of any home improvement project, but city houses were often in such an advanced state of dilapidation that they had to be gutted, with all or most of the interior finishing removed, the utilities yanked out, and the walls taken down to the studs.

Gutting a house reduces its value to an appalling degree. The value of the property at its nadir may be the price of the land on which the house sits minus the cost of razing what's left. The home owner doesn't see it in such stark terms, of course; he's destroying the house in order to save it. The lender can afford no such confidence; he must plan for the worst. (I'm trying to put myself in the lender's shoes here, not without effort.) Except in rare cases the home owner has no prior experience; he may well be a fool, and even if he isn't, he may be launching a project he lacks the resources to complete.

One encountered such people from time to time. When I was just out of college I came home about an hour past dawn one morning to overhear an argument under way in an old house across the street from my apartment. The house was occupied by a young couple with a small child. Over a period of several months the husband had disassembled most of his front porch, presumably with the idea of rebuilding it. At the time of the argument the porch consisted of the wooden deck plus the roof above, the latter propped up precariously by two-by-fours at the corners. There were no pillars, railings, or steps—I remember one day the small child and a little friend having a peeing contest off the side. The only access from the sidewalk to the front door was a stepladder propped against the deck where the stairs had been. The fellow had gotten the project to that point perhaps a month or two previously. There'd been no progress since.

That was the subject of the argument. “You take the whole front porch apart and then you just leave it like that! I can't get into my own house!” the woman shrieked. “I can't
live
like this!” (Many a rehabber has heard these words.) The woman may have thought she had problems, but the party who arguably had worse ones was the holder of her mortgage, the value of whose collateral had just gone down the pipe.

Thus the Noh ritual. The lender will want, first of all, abundant documentation establishing that the loan applicant is a person of means; he'll want an appraisal, to confirm the starting value of the house; he'll want plans indicating in detail the work to be done; he'll want a contract with a qualified builder to perform the work for a fixed price, plus an oversight process to ensure that the work is done competently and in a timely manner; he'll want tax returns and plats of survey and credit checks and builder's references and a building permit and insurance policies and four or five million other things that at the time I imagined had been dreamed up by a bunch of former fraternity rush chairmen cackling:
Let's see if we can get the dumb son of a bitch to do
this
.
However—again, I'm trying to be evenhanded about this—it may well have been the case that they were the product of some bean counter waking up in the middle of the night in a cold sweat and thinking:
We're sinking $200,000 into
what
?
Finally—this is the tricky part—he'll want assurance that the finished house will be worth what it cost to restore it, or more precisely, worth the value of the outstanding loans.

For us this was no sure thing. We'd purchased the house with a $200,000 mortgage. The architects estimated that renovation would cost $250,000 if nothing went wrong. Comparable houses in the neighborhood (Ned's, for example) typically sold at the time for far less than $450,000. Luckily, one gut rehab in the vicinity had been completed and sold prior to our arrival—another Queen Anne a block away. Initially, we were told, the owner had put it on the market for $650,000. One hopes this didn't represent the actual amount of money invested in the property, because there had been no takers. The owner had been obliged to reduce the price sharply, eventually striking a deal at $456,000. Allowances having been made for differences in size and finishes, that figure established the upper limit of the financing we could obtain for the Barn House.

This is a point worth enlarging on. In fixing up an old city house, the chief lending constraint wasn't so much what you could afford personally (although naturally that entered into it), but rather what the neighborhood would support. Trouble was, a city house commonly was such a shuddering wreck that the obtainable funds undershot what was needed by a hilarious margin. The Barn House required reconstruction of the most fundamental sort—I-beams! Roof! Walls! We had of course included the more conspicuous repairs in our cost estimates, but—I blush to confess it—we'd left other items out. For example, I'd have been hard put to come up with a persuasive riposte had some keen-eyed loan officer sat down with me and asked:
So, this house—were you thinking of having doors?
The numb fact was that the money we expected to have at our disposal wouldn't suffice to complete the job, and we were gambling that more would magically materialize at timely intervals en route. Anyone who embarked on a large-scale city rehab in those days can no doubt tell a comparable tale. The bank, one suspects, wasn't entirely oblivious to the implacable fiscal facts and, notwithstanding its appetite for documents, simply took a great deal on faith. I know we did (or anyway I did—I hadn't explained to Mary in detail about the loose ends in the budget). One had the sensation throughout the project—and bear in mind, this was above and beyond the usual concerns about tradesmanly competence and schedule slippage and so on—of careening down a mountain road in a car without brakes, having no definite notion of what lay ahead and no certainty of success, knowing only that, the frantic descent having commenced, there was no alternative but to continue—and this in a race that went on for years.