Ugly houses are made, not built.
In Midwest City, a misbehaving renter moved in with a misbehaving, flea-bitten dog. And an ugly house was born.
In Edmond, homeowners let the garbage pile up and the termites invade. Slightly to the north, the owners shared their house with a 200-pound bobcat.
"The woodwork was a little scratched up,” Scott McLain said.
"We had to completely rehab it,” Richard McLain said.
For more than four years, three brothers — Scott, Mike and Richard McLain — and their father, R.T. McLain, have owned and operated a local HomeVestors franchise, also known as "WeBuyUglyHouses.com”
Constant advertising, mainly on seven digital and about 50 conventional billboards, generates both telephone calls and Internet inquiries from people ready to unload their ugly houses fast.
"For every 100 leads that come in, we probably buy about five to six of those houses,” said Mike McLain, 45, who is in charge of the home purchasing.
In all, they have purchased more than 250 ugly houses in the Oklahoma City area and renovated them. They have rented out some and sold others, although not under the "ugly house” moniker.
"We think there might be a little bit of stigma there,” said Richard McLain, 50, who manages sales for the family business.
The for-sale signs on the formerly ugly houses read "Mull Real Estate,” which is part of Mull Properties. The family business includes commercial investments, including one-third of the Casady Square shopping center in north Oklahoma City and the recently launched Red Dirt Lending, designed to provided quick-turn-around loans for rehabbers, Scott McLain said.
The "Mull” refers to Scotland's Isle of Mull, where the McLain family originated. All three brothers have traveled to the island and seen its deteriorating stone castle.
"It's an ugly castle. It's falling down,” Richard McLain said.
About six years ago, the McLain family took another trip, driving to Amarillo, Texas, to check out a cousin's investment in a HomeVestors "ugly houses” franchise.
The McLains paid $49,000 for the franchise operating rights in Oklahoma City, though Richard McLain said other HomeVestors operations could eventually be sold in the area.
The Dallas-based HomeVestors is now in 37 states.
The HomeVestors investment has paid off, partly because of the trademarked "ugly houses” phrase and the cartoon caveman logo called "Ug,” Richard McLain said.
"It's a trusted brand at this point,” he said.
Other investors, many who advertise on television, buy "as is” houses as well. Those operations often purchase the rights to a catchy 800 number and little else, Richard McLain said.
Other real estate investors "chase” foreclosure lists, looking for the bargain, Mike McLain said.
"The main way we buy houses is through our billboards and direct mail and Yellow Pages. Then people call us,” Mike McLain said. "The No. 1 reason we don't go out on a lead is it is too far away. The No. 2 reason is they owe too much. Some people have zero equity. Roughly, you need to have about 65 percent equity.”
Mobile-home owners also are rejected, he said.
"We probably go out on about 50 percent of our leads,” Mike McLain said.
Richard McLain said the most houses they purchased in a single year was 103 in 2005. However, a single Guthrie purchase inflated those numbers.
"Obviously, that was a big year for us, because we bought 48 houses on one day,” Richard McLain said.
The homes belonged to a landlord facing health issues, Richard McLain said.
"He had been milking his rental houses for a long, long time. It finally got to the point that he lost interest in them,” Richard McLain said.
Sometimes though, it is landlords who call when a house has been mistreated by a tenant.
One of those was the Midwest City house, at 107 E Northrup, a three-bedroom, one-bathroom home built in 1946.
In the last few years, the house had taken a beating. The flea-bitten hound made things worse.
"It was a horrible pet with horrible fleas,” said Scott McLain, 41, who is in charge of rehabbing the houses.
The home was the last of several rental homes owned by an older woman.
"It's a very classic situation. She didn't want to fool with it,” Richard McLain said.
The McLains did, paying $39,000 for the 1,020-square-foot home. They spent another $10,000 on renovations, including upgrades in the plumbing and the addition of some new doors, tile floors and a laminate counter in the kitchen. The interior of the home was painted in a neutral crème color. The now-pristine home, which includes a detached garage, has been on the market since Nov. 6. The asking price is $67,900.
"The phenomenon of people not maintaining their homes is not limited to smaller homes,” Richard McLain said.
In March 2006, the McLains bought a four-bedroom, 4,085-square-foot Edmond home from a retirement-age couple for $305,000.
"It was full of trash. It was unbelievable,” Scott McLain said.
"It was one of those cases where you walk in and say ‘I can't believe people live like this,'” Richard McLain said.
After extensive renovations, the house sold earlier this month for $384,000.
"It took a year and four months to sell. It's hard to make a profit when it's on the market for so long. That one actually didn't turn out so hot.”
But there are other benefits to their business.
"It's very rewarding. The neighbors love us. We get letters,” Scott McLain said.
