How to be Poor and Buy a House

Cash-poor people can buy a house.  It's a struggle, and many routes easy for those with money are closed, but if you can be patient and be okay with a house not-quite-of-your-dreams, you can do it.  I know because we finally did it ourselves.

I've read plenty of "inspirational" stories of people with "no money" flipping houses and getting rich, but their version of "no money" is not really no money.  They have a house they sold, or stocks they sold, or money they could borrow from family.  We had no house to sell, no major savings, and no family who could lend to us.  We pursued several avenues to a house, and while any could have possibly worked, only one finally did.  We tried:

• City auction
• "Homestead" housing
• Traditional bank lender
• Specialty "low-income" lender
• Asking to be given a city-owned house

Each of these paths had problems, but sometimes they have worked for other people so we tried them all.  To see how you match up with our personal version of "no money", you need to know our details:

• We make less than $25,000 a year and we need just about all of it to live (rent, food, gas, utilities, etc.)
• We have approximately $5,000 in money we can liquidate to cash (not IRAs, which I refuse to touch!)
• We have no debt--no credit cards, no car payments, no loan payments of any kind.

I understand others may be in more dire financial straights than we are, but you can see we are not in a position to lay down big bucks, nor do lenders offer us much in the way of a mortgage.  In the end, it was the "simple" use of huge balls of brass that got us a house, and even more gigantic balls that helped us to make it habitable.  The only way we got our house was by asking to have it from the city.  It had no plumbing, missing radiators, a leaking roof, and a back door that was wide open.  It was filled with garbage, including a stairway used as a feral cat litter box.  The first floor toilet was broken--in half!--and the iron fire escape was pulling free from the back of the house.  The sofits were see-through with rot and it was in a questionable neighborhood.  We asked for it.  We got it.

We cleared out the garbage, secured the doors and replaced broken windows, put a tarp on the roof leak, and lived without water or heat.  We couldn't afford to rent and fix a house, so we had no choice.  Our relatively low rent was to go to repair savings, and in the meantime, we were on a one-year waiting list to get a repair grant that could fix our roof.  We polished up our brass balls and started asking for free to cheap renovation help.