Mansion of Mystery

In the spring of 2010, I was showing lots of multiunits and old, dilapidated mansions in a few neighborhoods on Pittsburgh’s east side. These were in both up-and-coming areas and established neighborhoods that border rougher parts of town. This area was of particular interest to some young investor-developer clients I’d worked closely with over the last few years. We would often take a few hours in the afternoon and go look at as many potential investment properties in one part of town as we could.

It was on one of these outings that I came across one of the most baffling places I’ve ever shown. The guys were looking for a duplex or multiunit and although they were general contractors, it was preferable that the structure be easily renovated to a rentable condition. The property in question was of particular interest to them because it was zoned for four units, and while it wasn’t clear from the MLS listing how it was currently divided, it was always a bonus to have the approval for that many apartments. Not only were the zoning and location checks in the plus column, it was listed for $80,000 on a street where homes in ideal condition were priced at more than $300,000. The listing photos and text indicated the property was partially renovated and boasted two furnaces, so we thought this could be a real money-maker.

We pulled up in front of the run-down old mansion on a weekday afternoon. The building, and pretty much every other house on the street, had a huge front porch. We noticed some very nice single and multifamily homes close by. However, the two immediately flanking the one we were going to see were not in great shape and — judging from the overgrown yards, broken plastic lawn chairs, and general state of disrepair — they did not appear to be owner-occupied, either. After a general street scan, we headed into the house.

From the get-go, this place seemed a little off. We noticed right away that there were hooks in the walls in this grand foyer and all kinds of bicycle parts everywhere. Who puts bike racks right in the foyer of an old mansion? Also, the first floor was pretty much gutted. There was a formerly grand staircase to the left of the entrance and a large, open formal dining room to the right, and everything was sort of gray from a layer of construction and plaster dust.

As we began making our way through the house, my suspicions about it being weird were confirmed. Hanging from the ceiling in the dining room was a swing made out of a plank of wood and white nylon rope. The only lighting in the room appeared to be icicle-style Christmas lights. There was a piece of notebook paper with something written on it stuck to the wall above the fireplace mantle, and some writing with chalk on the dining room floor. When we got closer, we noticed the sign on the mantle read “Bathroom this way,” with an arrow to the left.

“What the hell?” was pretty much all we could say at that point. One of the clients went to investigate the bathroom. There were more signs along the way directing us to it. We thought it was funny that there were so many directional signs for the toilet when this home was just slightly above the condition in which it would be somewhat acceptable for a construction worker to pee in a corner. It made us start to think some serious parties or gatherings went down in this place. I mean, obviously having a swing in the middle of your dining room means you like to have a good time, right? It was so bizarre. Anyway, when we finally located the first floor “bathroom,” it turned out to be little more than an empty Home Depot bucket on a closet floor.

The house had an old fashioned butler’s pantry off to the side of the kitchen. We headed that way as we exited the playground-living-dining room area. In the pantry were jars of mysterious liquids that looked like lab chemicals, and rubber hoses, large rubber gloves, and PEX piping laying around. There was more of that in the kitchen, as well as a few 100-gallon drums of God only knows what. The wheels were definitely spinning as to what possibly illegal substance was being made here. Plus, the MLS referenced a renovated kitchen, but this one was more like a laboratory.

“Wait, we’re in the right place, right?” one of my clients asked.

“Right. Onward …”

In the basement, there were two furnaces (as advertised), both wired up to PEX piping that appeared to be running all over the place. The guys poked around at the furnaces with their flashlights, while I stood back scanning the scene. The basement was large, and there were at least fifty of the 100-gallon drums down there. The furnaces were somewhat taken apart, and we wondered if these people where stealing energy somehow. Or we thought they might be crashing at the house and illegally making their own fuel.

Now we were practically convinced that we’d stumbled on to some type of illegal operation, and we really didn’t want to be in this dank, potential biohazard of a basement when the occupants got home. It was time to scope out the rest of the place and see if it had any real rental potential. We went back up to the first floor, down a hall leading back to the front of the house, and up the main staircase. Walking up the stairs, there were some creepy charcoal drawings on yellowed drawing paper pinned to the walls. It was as if this building was home to some type of cult or off-the-grid militia headquarters.

Still, this place was actually not in the worst condition ever. You could tell it had been beautiful in its glory days and probably could be again. There was even evidence there had recently been some construction, but all the weird drawings ripped from notebooks pinned to the walls, the swing, the jars of chemicals, and drums of strange matter were definitely distracting us. All we knew for sure was that the furnaces were probably nonfunctional and the layout had serious potential. We discussed where a second entrance would go and the guys were calculating hypothetical construction costs. As far as we could tell, it wasn’t really divided into apartments at this point. Trying to figure out a cost-effective way to break the house up would happen after we’d seen how the other floors come together.

At this point, the conversation drifted back to the residents of the house, and there was some discussion about squatters. We entertained the possibility that there was a group of runaways or some underground political movement of disgruntled youth hiding out there. This was only a few months after I’d had a run-in on a winter night with a real-life group of squatters, so I was pretty quick to jump to that conclusion. (Read more.)

We got up to the second floor and walked into one of the bedrooms. The door was slightly ajar. I pushed it open to reveal the most shocking thing we’d seen in this house yet: a well put-together office! Definitely not what we were expecting. The walls were painted, there was lots of natural light, and there was a glass desk with a couple computer monitors on it. The desk and chair were modern and did not look cheap in the least. There was quite a bit of expensive electronic equipment around as well. There were also binders, books, and papers somewhat strewn about. It was a little messy, but otherwise quite normal. It was obvious someone actually worked there. Um, OK …

There were a couple other bedrooms on that floor. I remember them being painted dark and tapestries hanging over the windows. The floors featured the original wood. It seemed as though several people were sharing a room, but nothing too crazy. On the third floor, one room was set up as makeshift living room. There was an old chair that looked like it had been picked up off the side of the street for free, more artwork on construction paper tacked to the walls, and mismatched coffee tables. There was also an old gas heater in the room and a large bag of some type of pellets that we discerned the residents were burning for heat.

This was also where we found the kitchen we’d seen online. Or, I should say, what we thought we’d seen online. It was one of those kitchens that looks like it’s going to be sleek and contemporary in the photos, but when you get there, it looks like a blind contractor put in the countertops. Poorly done. It was actually kind of sad that they’d wasted so much of their materials. The kitchen renovation may have been a botched job, but there was good light up there in the finished attic. And it had some cool features, like exposed brick.

After walking through the whole house, we were still baffled by the nature of the living arrangement. But it didn’t matter: The property had a great layout, was in a promising location, and could be easily converted to apartments. Despite the possible environmental hazards, we believed it was worth bidding on. Of course, it was overpriced considering the damage to the mechanicals and botched renovations, but the clients and I were in agreement about making an offer. We walked around the exterior, then headed off to the next one.

We looked at a couple more properties that afternoon but none had as much potential as the off-the-grid “commune” house. My clients were interested, so we agreed to do some research and touch base later on. I could not wait to talk to the listing agent. He was another young, in-the-know real estate pro, and I figured he’d have some frank answers.

When I finally connected with him, my first question was, “Have you been inside this place recently?”

He laughed — of course he had. I said, “OK, can you tell me a little bit about what’s going on there?”

He told me there were no squatters; the home was owner-occupied. The owner moved to Pittsburgh from Los Angeles and bought the place for $37,000 three years prior. Since then, he had spent nearly $50,000 on “updates.” One of the more costly and labor-intensive improvements had been converting the house to run on vegetable oil, which the owner and his girlfriend also made themselves. (That explained the large metal drums.) I instantly felt a little bad for them, because I knew what my clients’ reaction was going to be: “They spent how much? Ha! What idiots! They’ve decreased the property’s value, not increased it.”

When we made an offer, the owner did attempt to use their vegetable-oil conversion as a selling point throughout negotiations. To my clients, however, having alternative fuel in a rental property was not an upgrade, but rather a hassle they weren’t prepared to deal with. In their eyes, it was going to cost them money to repair or replace the furnaces, not to mention the scope of the other work that still needed to be done. The seller, who wanted to unload and head back out west, was prepared to give a little on price, but wasn’t willing to give up all of the blood, sweat, tears, and money he had put into the house.

Ultimately, we weren’t able to come to an agreement, and we moved on to something else. The seller ended up closing for significantly less than my clients offered about six months later. By my estimate, he ended up losing about $30,000 because he couldn’t find someone who saw value in the same over-the-top improvement that he did. I guess he had the satisfaction of enjoying it while he lived there, right?