14-y-o Florida girl buys foreclosed house with money from Craigslist furniture-selling hobby

NPR's Planet Money profiles Willow Tufano, a 14-year-old Florida girl who saved thousands of dollars by harvesting furniture from foreclosed houses and selling it on eBay. She's just bought half interest in a house that went for $100,000 at the peak of the bubble. Her mom owns the other half, and the house went for $12,000. They rent it out for $700 a month now. Chana Joffe-Walt writes,

One day, Willow's mom, Shannon, saw a two-bedroom, concrete-block home on auction for $12,000 — down from $100,000 at the peak of the bubble. Shannon was telling her husband about the house, when Willow piped up.
"I was like, 'What if I bought a house? That would be crazy,' " Willow says...
As I was working on this story, I kept thinking that when a 14-year-old kid can buy a house, the market must have hit bottom. I kept saying this to Willow, and she'd sort of vaguely nod.
But it's hard for Willow to see herself as symbolic of anything. To a 14-year-old kid in Florida, the housing collapse is basically the only world she's known. It's the landscape. It's a Craigslist hobby.

This 14-Year-Old Girl Just Bought A House In Florida (via MeFi)

(Image: Chana Joffe-Walt)

I write books. My latest is a YA science fiction novel called Homeland (it's the sequel to Little Brother). More books: Rapture of the Nerds (a novel, with Charlie Stross); With a Little Help (short stories); and The Great Big Beautiful Tomorrow (novella and nonfic). I speak all over the place and I tweet and tumble, too.

MORE: bubble • Business • florida • housing • Kids • rentier

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sagodjur

I’m not saying Cory made this up, obviously, but it sounds like something that would happen in one of his stories.
penguinchris

It’s interesting, but the effectiveness of her business model is a bit baffling. If so many people have been foreclosed on that she can get their possessions for free (she literally got furniture and appliances and stuff for free from foreclosed homes), who exactly are the people buying the stuff from her?

I guess it just adds up over time – it says she was only making about $500 a month selling this stuff and that she was saving “most” of it- but still, odd. I hope this has a positive effect on her, and she doesn’t turn into a heartless and useless-to-society rent-seeker like most landlords.
- http://www.facebook.com/joshua.frazer1 Joshua Frazer
  
  She’s acting as the middleman, like most merchants do. I dont have time to sort and fix abandoned furniture, but she does. Plus she probably has transportation access to pick it up. I’m pretty sure someone in my area could make money doing this as well.
  - penguinchris
    
    Yeah that’s where I was going with that comment – clearly there are other expenses here which aren’t being accounted for, like what it costs for whoever owns and drives the pickup truck they must use, so it’s really the parents running the show.
    
    And I’m pretty sure she didn’t actually save anywhere close to the entire income she generated before buying the house, if every other 14-year-old on the planet is any indication :) With the income they’re getting from rent now, I imagine it’s probably more than any reasonable 14-year-old could spend each month and hopefully they’re putting it into a college fund!
    - Antinous / Moderator
      
      hopefully they’re putting it into a college fund!
      
      Why would someone who’s already making rental income at 14 spend money on a late-adolescence storage facility?
GoddessOfCarbs

I want to know where she is; what town?
- http://twitter.com/bazimmerman Brad Zimmerman
  
  Normally I have absolutely no interest in knowing anything more than what is in the article …but your question piqued my curiosity.
  
  Let’s just say that with nothing more to start with than the info in the article and Google, one can determine where Willow attends school, her interests, the street she lives on, her father’s hobbies, her mother’s various real estate dealings, a reasonable picture of their extended family, and so on. I mention this because it is fairly astounding how much information is out there (in general). This is a fairly obvious thing to say I suppose but it’s still astounding.
  
  Anyway, after doing the research, I wonder if she is really worthy of the some of the scorn and other negative stuff I’ve seen here.
intererro

Business plan: Get non-luxury household items for free. Sell them at low prices to people who need them. When your costs are almost zero, it’s pretty hard not to make a profit.
http://twitter.com/Dree10K1 Dree

I’m confused. How is “harvesting” furniture from foreclosed homes not stealing, or at the least, trespassing?
- Antinous / Moderator
  
  I’m confused. How is “harvesting” furniture from foreclosed homes not stealing, or at the least, trespassing?
  
  I’m confused. How is “not bothering to read the fucking article” not wasting bandwidth?
  
  One day, she went to a house that an investor wanted to flip. “It was filled with all kinds of stuff!” Willow says. “I was like, ‘I can sell this stuff if he’d want to let me have it.’ ” That was fine with the investor. So Willow sold the furniture and appliances from the house on Craigslist. She did the same thing with a bunch more houses. After a while, she was clearing about $500 a month, and saving a lot of it.
  - http://twitter.com/Dree10K1 Dree
    
    Service with a smile as usual.
    - Blaise Pascal
      
      I, for one, welcome a Mod who doesn’t suffer an audience which refuses to read about the topic. People are ridiculously expectant upon being handed everything while working for nothing…unlike Willow who will probably own Southern Florida by the time she’s 18.
      - DreamboatSkanky
        
        Oh? What did the moderator say?
    - Stooge
      
      It certainly made me smile.
koko szanel

best comment on NPR site :
“Aaron Hunt (t3chi) wrote: The girl does not own the house; her mother, who is in real estate, owns the house. Funny how being in real estate seems to be the only way anyone gets their hands on a $12K foreclosed home. This story shows just how easy it is for real estate agents to throw their money around and exploit others to do it. The home should have gone to the couple who has to suffer the humiliation of renting from a 14-year old with a parent in real estate who could have helped them get that home for $12K in the first place — oh, but wait then her mom wouldn’t have gotten her usual $50K cut on the sale, right? How about a story on how regular people who make less than $30K a year can get a foreclosed home for $12K, eh? How about a story on how self-employed people with flawless credit cannot get a bank loan in order to buy a house. It is *impossible*. Foreclosed homes should go to people who can afford them, not greedy “investors”! This story is not an example of what is right in our country; it’s shows exactly what’s wrong with it. Absolutely infuriating!”
- bcsizemo
  
  I didn’t realize the “usual” home selling price was 1.67 million.
  
  Considering most of the realtor fees I see are around 3%. And it is possible that the couple has no intentions on buying a home in the area and are looking to rent for logistical reasons.
  - travtastic
    
    It’s also possible that the couple is extremely wealthy and just humble, but it’s astronomically more likely that they’re a lower-income family that can’t get a loan to buy a house.
    - http://twitter.com/bazimmerman Brad Zimmerman
      
      Exactly. At least someone’s living in it. $700/mo isn’t cheap but it isn’t astronomical, either – I was paying $650/mo when I was renting a place 8+ years ago in Portland, Oregon.
      - Guest
        
        Are you actually comparing rents in growth-bounded city of Portland to the drained/filled swampland sprawl that is Florida? Okay then.
      - dragonfrog
        
        Were you renting a place you could have bought for less than two years’ rent? Of course not, only an idiot would do that. Or someone without access to thecrony network that monopolizes deals that good…
- Antinous / Moderator
  
  Assuming that the mother did one side of the transaction, the commission is (the generally maximum) 6% and she gets (the generally maximum) 90% from her broker, her commission check would have been $324 minus some fees.
  
  You might also consider that the average realtor makes less than one sale per year and, given the current real estate market, most realtors are living in a van down by the river.
  - http://burntheflag.ca Jardine
    
    Eating a steady diet of government cheese! Wait a minute. Government cheese? That’s socialism!
  - http://www.jjsaul.com Jim Saul
    
    It’s not all just like we see on HGTV?!
    
    Sigh.
  - EnglebertFlaptyback
    
    Minor correction…the average Realtor sells about 8 houses a year (though there are certainly many that DO sell just one or two houses a year).
    
    I don’t understand the latter group’s motivation for staying in business; unless those one or two houses are some high-dollar properties they’re barely earning enough to pay fees, membership dues, etc.
- http://twitter.com/bazimmerman Brad Zimmerman
  
  If people can’t get a bank loan for even $12k then how were they supposed to buy the place? Sounds like this girl and her realtor mother bought it, cleaned it up and are renting it. At least it isn’t sitting around, rotting.
  - EnglebertFlaptyback
    
    And even more to the point – you generally can’t get a mortgage for $12,000 in the first place.
- EnglebertFlaptyback
  
  This is in fact complete crap. I am a realtor in a mid-sized Midwestern city. I am currently working on a deal for a house that is $12,000. There are quite a few like it in my city.
  
  That $12,000 house, however, is in need of about 20-30K in repairs to make it habitable.
  
  In a real estate market like Florida’s, which crashed MUCH harder than mine, I could see how one might be able to encounter a house requiring far less repair for $12K.
  
  The problem that self-employed people have in obtaining credit is a perennial one. The first step is to go to a LOCAL bank. The second is to obtain a manually-underwritten loan.
travtastic

I appreciate the entrepreneurial spirit here. But this is ultimately a story about:

1) Getting someone’s furniture for free after they were kicked out of their homes.
2) Selling it.
3) Using the profit to buy another house that someone was kicked out of.
4) Becoming a landlord and recouping a $12k investment in about 2.5 years.
5) Earning probably $550-600 a month in perpetuity for… something.

And it’s all made possible by a foreclosure crisis. The circle is complete.

Come on.
ChuckieJesus

People sound pissed. I understand why, but frankly, I’m just pissed I didn’t think of it first.
http://mikeoshea.net/ somnambulist

Is vulture capitalism more worth celebrating when it’s a 14 year old doing it? “Harvesting?” A realtor? Foreclosures? Disgusting. She’ll have a great future if this country continues rewarding terrible, predatory behavior.
- RJ
  
  “Sanford & Son” was a serial documentary of the lives of two vulture capitalists.
  - ialreadyexist
    
    Wheezy!
    - http://pulse.yahoo.com/_WYCZA65MLHD2YODBOBD2JHK6TE ReynardB
      
      Wheezy? That’s the Jeffersons NOT Sanford & Son.
      - millie fink
        
        Yeah, well. You know how easy it is for white folks to confuse the black ones with each other.
        
        :/
- EnglebertFlaptyback
  
  The predatory behavior, if any existed, is on the part of the banks and mortgage brokers who largely created this crisis, not this kid. I promise you, the people who buy these houses have zero role in how they made it on the market in the first place.
  
  At *least* the houses aren’t sitting empty, slowly decaying and creating an eyesore.
http://theladyfingers.blogspot.com/ Ladyfingers

I wish there was a property collapse here in Australia. Unless I move to the sticks it’s a lifetime of renting for me.
- ialreadyexist
  
  There will be soon. Two years tops.
- ncinerate
  
  Haha! I actually just recently finished watching the most recent season of “the renovators” from Australia. I knew -IMMEDIATELY- that Australia is off the deep end just like we were a few years back – don’t worry, you’ll catch up.
  
  For anyone who has missed this absolutely hilarious show, it tasks groups of people with renovating homes in Australia with the intent to flip and make a profit. Then they introduce the homes. Here, let me demonstrate -one- of them for you:
  
  http://therenovatorstv.com.au/the-inner-city-terrace.htm
  
  That’s right, that’s a tiny little townhouse they bought for 749,000$. Guys and gals, just look at the 33 picture portfolio of the house and prepare to laugh. It’s got an “outdoor bathroom”, and appears to be completely eaten by bugs and animals from floor to ceiling. Sure, they renovated it – but is the renovated property honestly worth more than 900,000$?!?!?!?
  
  The rest of the homes are equally hilarious, absolutely trash buildings selling for nearly a million dollars apiece. INSANITY.
  
  Give it a bit of time, your real estate market will come crashing down to earth.
  - gwailo_joe
    
    “Give it a bit of time, your real estate market will come crashing down to earth.”
    
    I like that. For myself, I rent in San Francisco, and the housing market here is resilient and frankly, for me, unaffordable.
    
    But the next Big quake? Maybe it will all come crashing down. Literally.
http://www.facebook.com/people/David-Witt/1041651388 David Witt

I predict Rush Limbaugh will love this girl – she is proof the ‘trickle down’ theory works!
Aleknevicus

I’m curious as to how extraordinary the $12,000 price is for this house/market/location. Surely, if $12K is a typical purchase price, wouldn’t rental rates in the area be significantly less than $700/month?
- AZMarkS
  
  From the article:
  
  “The place was a mess when they bought it — “like there was a riot or something,” Willow says.
  They cleaned it up and rented it out to a young couple for $700 a month”
  
  It was $12K because it was trashed and the bank that owned it probably didn’t want to spend any time fixing it up. They just wanted it gone. So the girl (and her Mom) buy it, fix it up and now have a property that can be rented out.
  - Aleknevicus
    
    I understand that the house was trashed and required extensive cleaning. What I don’t understand is whether or not such houses in that area are commonly available for $12K.
    
    If they are, why would anyone rent a home for $700/month when they can buy one for ~$100/month? ($12K, $0 down, 15-year term, 5% mortgage.) Surely the expense/hassle of cleaning a house would be worth the vast savings?
    
    Given this, I suspect that the $12K purchase price is an extraordinary deal and not commonly available.
    - AZMarkS
      
      If it went for $100K at the peak of the bubble, it’s probably down 30-40% now. So, you have a 60-70K house that is trashed and in foreclosure. I could see that being available for $12K.
    - http://dansherman.info/ Dan Sherman
      
      Someone else reposted a comment from NPR which highlighted ~~the fact~~ their opinion that foreclosed houses selling for $12k are pretty much only available to those with the right connections. The 14 year old girl’s mother is a real estate agent. People with perfectly good credit and a down payment are being turned away. This is not a picture of success but of what’s wrong.
      
      EDIT: I don’t have personal experience with buying foreclosures, so I edited my comment to reflect that the person I was quoting was expressing an opinion and not a fact. I have no idea how difficult or simple the process of buying a foreclosure is.
      - EnglebertFlaptyback
        
        This is bullshit. Anyone can buy these houses. Ever hear of “HUD houses?” Here are a couple websites for your viewing pleasure:
        
        http://www.homepath.com (Fannie Mae)
        http://www.hudhomestore.com (HUD)
        
        Just to name a couple.
    - EnglebertFlaptyback
      
      You typically can’t get a mortgage on a $12,000 house. You either pay cash or get a private loan.
      
      Incidentally, a perusal of the Fannie Mae website (http://www.homepath.com) shows LOTS of houses <$25K available in Florida. Some of them even look decent, amazingly.
foobar

So isn’t it a good thing that houses can be had for $12,000? I mean it sucks if you bought in at $100,000, but for everyone else…
- ialreadyexist
  
  The government and the fed absolutely hate, hate, HATE that (price deflation). And they are willing to spend trillions of your money to prevent it from happening. The monetary policies of the US try to achieve around 4% inflation per year. Yes, they go out of their way to try to make prices go up. That people would be able to afford a house if prices wen’t down doesn’t fit into their plans.
  - PNWchemist
    
    wages fall in tandem with market prices. says my macro econ 202 prof
Blaise Pascal

there is no need to blame Willow for what Willow was able to do. Willow neither exploited nor manipulated anyone. Willow did what any honourable business person does – she monetized a situation in a perfectly legal way while causing no harm to anyone along the way. Does it really matter if Willow generated her capital by selling furniture from foreclosees who were either too poor to move it, or just didn’t care enough to take it? Not really…either way those possessions which Willow acquired and sold were abandoned…and, something about recycling comes to mind.

that young couple who are paying $700/month to rent that home comes out to around $400/month each with utils. Not a bad price to live in a home, as opposed to an apartment. Additionally, who is anyone to say that couple is being taken advantage of by Willow when they pay that amount for rent? Did Willow hold a gun to their head and force them to sign a lease? Lol!

Please, the calls that Willow is predatory are ludicrous. Did Willow manipulate someone out of their home? Did Willow just randomly foreclose on someone’s home like BofA does? No. She didn’t. She made a legal purchase in a non-exploitive way.

I’d love to see any of the nay-sayers in this thread, given a similar opportunity to profit, turn it down for so-called moral reasons.

In any case, our ire is best directed at the swine who created this entire housing mess.
- Guest
  
  “In any case, our ire is best directed at the swine who created this entire housing mess. ”
  
  Yes, you sure went right for them.
- Hakuin
  
  kid: hero
  system: sucks
technosean

I’d love to see a world where houses weren’t investments but rather were just places to live. Maybe then so many folks and their children wouldn’t have to live out of their cars or worse.

Why couldn’t that home been bought by disadvantaged family that actually needed it for shelter? No, let’s have an extra home, and make others pay to use it.

This world needs a lot of work.
- Wreckrob8
  
  The problem is not with investment and the need to protect against inflation but with speculation. Still shelter, investment and speculation are all legitimate uses of property in a capitalist economy. I don’t believe within those terms she did anything wrong. If you would like to change the terms of debate that is a different issue entirely and I for one would not object.
Hakuin

I’ll bet everyone would admire her more if she slipped outside the wire every night to hunt rabbits with her bow.
snagglepuss

It’s not about how she got the house.

This appears to be a kid with an understanding of the basics of capitalism. What bears watching is what she DOES with that understanding.

Does she now retire from the housing market, content with her stroke of good fortune, combined with her readiness to move on an opportunity ? Does she use that understanding to go on to making a career of real estate killings, moving inexorably in the direction of profiting off of others misfortune ? Will she be a consientous, responsible landlord ? Does she teach other prospective home buyers the dangers of blindly trusting something as volatile and as untrustworthy as the industry dedicated to unscrupulously making money off of somebody elses money, instead teaching people the fundamentals of caution, carefulness and price and institution comparisons ? Does she go out of her way to make people understand that she was lucky, and that not every one should expect that kind of luck in their own dealings ?

This whole article could just be the barest beginning of this girl’s story…
http://pulse.yahoo.com/_RREC2OY32JFN6JWSK4KZNBZF7Y Jim

Someone bought a house for $100,000 that, it turns out, is worth significantly less than $100,00. They could not afford to continue to pay for it. It got forclosed. For whatever reason, they did not move their possessions out of the house. The new owner wants the stuff out and will have to pay someone to get it out or do it himself….kid recognizes opportunity.

In Florida, where 50% of the mortgages are underwater, this kid can repeat this scenario at will. Her mom finds a foreclosure for $12k in a ‘decent’ part of town. Something anyone willing to look could do.

The kid has saved up $6k and her mom throws in $6k (I heard it on the radio). The house is in her mom’s name until the kid turns 18. The kid has no expenses because she lives rent free at mom and dad’s (as she should at 14). The couple that rents from her for $700 do not have to rent, they could have searched for the $12k foreclosure and bid on it. That’d have made the bank happy.

The kid gets $700 / month, uses part to pay off her $6k debt to mom and part to pay taxes and the rest to pay maintenance or profit. She’s no dummy and she’s not lazy.
Walter Dexter

Let me tell you about my experience with the current mortgage situation.

My wife and I bought a condo about 18 months ago for my mother-in-law to live in. We paid “cash” (pulled from existing lines of credit) of $73,000. It just appraised at $62,000.

We now want to pull some money out to pay down those other lines. Maybe $30,000.

Like many condo complexes, a good percentage of people aren’t paying their HOA fees (roughly 30%). The complex is also next to an interstate highway.

So Fannie, Freddie and FHA won’t touch it.

That is equivalent to saying “you can’t get a loan” because they make up the entire mortgage market.

This makes sense from a banker’s, “making loans on safe property” standpoint, but not from a public policy standpoint of facilitating the sale of properties to people who actually want to live in them.

Investors, of course, can get business loans to buy them then rent them out.

So why do pseudo-public corporations, nominally in the “public interest”, acting in the best interest of the bankers instead of the country? Oh, never mind.
- spydrmannyc
  
  Just one correction to your otherwise excellent comment. Investors can’t get a commercial loan on a single family rental property. Commercial loans start at five units and banks typically want more units than that against the loan. An investor can however bundle ten single family rentals together and get a commercial loan against all ten. A single rental unit is not even close to being considered a business.
http://pulse.yahoo.com/_RWQJCRYR4AONXZU6Z3OP66YU4Y Sheila

We rented an apartment once. When we took possession, the prior renters had taken the toilet seat but left a Danish modern couch, a cocktail table, and a magazine rack. Were we thieves? Don’t think so. Were they thieves? Nah. We bought a new toilet seat.

Anyone who claims reselling items left behind in a house that has changed ownership is thievery does not understand that these possessions legally and morally have been abandoned.
- foobar
  
  Vultures is probably the better word.
semiotix

The fact that she bought this with her mother (as in, Mom fronted some significant fraction of the cash), and that her mother is a real estate agent, sort of wipes away all the human interest here. Not to take anything away from this young woman–she’s got some pretty cool part-time jobs, for a 14-year-old–but what this boils down to is a parent investing some money on behalf of a minor child. Sure, it’s nice that Ms. Tufano is putting in some sweat equity here, but this kind of feels like a non-story in search of an angle.

Also, the reason she’s sort of “meh” about all the Very Big Significance Of The Housing Crisis is not because she’s some sort of shell-shocked child of war and “this is all she’s ever known,” etc. She’s “meh” about the intricacies of the housing market because she’s fourteen years old and even truly extraordinary tweens cannot be bothered to care about that sort of thing for more than five minutes at a time. Nor should they.
- Antinous / Moderator
  
  When I was 14, I had $500 saved from my allowance and Christmas gifts. She has $6,000 from working.
Navin_Johnson

Good on this girl, but this story is more depressing than uplifting. It will also be used by many to gloss over the rotten aspects of U.S. style capitalism (speculation, predatory lending, fraud,ugly rentier capitalism), and serve as a nice happy ending if you will. “See! The system works! If only you all weren’t as lazy as the 14 year old white girl!”

I felt a definite unease while hearing it on the radio yesterday.
- http://profile.yahoo.com/FSLZPG5WMYFW6M24BBGFZBKSSQ Rebecca
  
  Right, how dare she succeed when it makes other people uncomfortable!
http://www.fatwillie.net/ Willie

I wish i could buy a house for 12k!
technogeekagain

Right place, right time, some initiative, willing to buy a place that needs work… and I bet she hasn’t thought about upkeep costs, which is part of how we got into this mess.

Still, more power to her.
salparadise23

Not really sure why so many of you have have your panties in a bunch over a 14 year girl.
http://undulantfever.blogspot.com/ Bruce Arthurs

Whenever I shop at “Going Out Of Business” sales, I feel like a ghoul.

A happy, smiling ghoul.