Jeff Jardine

Modesto home that was victim of housing crisis gets new life

A residence on Orange Avenue in Modesto is undergoing renovation by Tony De Sousa and business partner Jim Schilber. The house has been empty for quite some time and has been a home to squatters.
A residence on Orange Avenue in Modesto is undergoing renovation by Tony De Sousa and business partner Jim Schilber. The house has been empty for quite some time and has been a home to squatters. jlee@modbee.com

On Orange Avenue, just a couple of blocks east of Modesto Junior College, a renovation in progress might seem like any other.

Built along McHenry Avenue in the 1920s, the 2,439-square-foot house was moved to a triangular lot bound by Orange, Morris and Terminal avenues more than two decades ago.

“They tore down an older home there and moved this one in,” said Lonnie Wright, a 40-year veteran of the neighborhood, pointing toward the work in progress. “The guy (owner) had a big white rabbit that used to beat up the neighborhood cats.”

Until 2010, the home needed only the perpetual TLC of a 90-year-old dwelling. Instead, this old house came to represent everything that went wrong locally during the real estate bust that began in 2006. Until the property finally sold in May, the place reigned as the most frustrating blight case on record in Modesto, going from spectacular to a spectacle in a matter of months and staying that way for more than four years.

“I never thought it would last that long – not in this neighborhood,” said Bert Lippert, the city’s building inspection program coordinator.

The recent history: Deborah Naylor of Modesto bought the property for $300,000 in 2002, restored the home and then sold it for $685,000 at the peak of the market in 2006, according to real estate records. Soon after, the economy went horribly south. Jobs disappeared. Real estate values plunged. The new owners eventually walked away from the property and vandals walked in – broke in, actually – repeatedly. The home became one of the 85,000 that have gone into default since 2006 in the Northern San Joaquin Valley. Many fell into disrepair or were vandalized, but this was worse than most.

The appliances, cabinets and fixtures vanished. The sound of breaking glass became routine, and whenever Lippert had workers board up the home, vandals tore down the boards within days and sometimes within hours and resumed their squatting. Neighbors routinely called the city and the police because of the illegal activity. The blight disgusted the area’s residents, including one who declined to give her name but said she called the city and police many times. In fact, the police alone went to the home 12 times in the past three years, booking suspects on charges ranging from parole violations to outstanding warrants.

“The police ran the homeless out all of the time,” the neighbor said. “They chase ’em off, and the minute the cops left, (the squatters) would come right back.”

Lippert made visiting the property part of his routine. “I walked the perimeter of the property once a week,” he said.

It didn’t matter. He’d find the plywood torn down and everything from hypodermic needles to excrement on the floors inside. A couple of years ago, someone torched the upper floor.

He said BAC Home Loan Servicing, which held the note on the property, claimed it only serviced the loan and bore no responsibility toward cleanup. So the city forced the property into receivership and twice issued notice-and-orders, in essence proclaiming its intent to demolish the house. It was that bad. Their actions compelled the lender to finally sell.

Modesto contractor Tony DeSousa bought the property in 2014 for $116,000. He and Jim Schilber are co-owners of All About Kitchens Inc. They are renovating the home entirely and intend to flip it when it’s finished, as they did with another foreclosure home on Sycamore Avenue a year or so ago. They’ve also contracted to restore about 30 other foreclosure homes for other investors over the past several years.

In fact, it’s the second time around for Schilber at the Orange Avenue home: He helped remodel it for Naylor after she bought it in 2002.

That time involved more of a spiffing up. This time, the place was so badly damaged that he and DeSousa tore it down to the studs, replacing battered lath-and-plaster interior walls with new drywall textured to replicate the original look.

“People try to modernize an 80-year-old home and it ends up looking like a brand-new one,” Schilber said. “We’re trying to keep the bones of the original (building).”

Some replacement couldn’t be helped. The abuse and weathering ruined some of the tight-grained old-growth Douglas fir and redwood lumber noted for its durability.

“There was lots of wood rot,” DeSousa said.

They replaced the exterior with new stucco. They put on a new roof and installed new windows. Hardwood flooring, new cabinets and fixtures are next.

The best investment was the new alarm system, DeSousa said, because until it was installed, vandals kept returning even though the property is fenced in and renovation had begun.

“We had some fascia (exterior trim) board stored inside and they broke in and stole it,” DeSousa said. “They were looking for materials to sell.”

By the time they’re done, DeSousa and Schilber expect they’ll have invested more than $250,000 in materials and labor into the home with hopes of selling it in the “mid-$500,000s,” DeSousa said. Some of the proceeds will pay attorney fees from the receivership. They figure they’ll make about $50,000 if they’re lucky.

The lucky ones, though, are the residents of the neighborhood who deserved better than watching that home being methodically destroyed. Likewise, a property owner across Morris recently tore down an old home and is building anew in its place.

“It will be nice when they get it all done,” one neighbor said.

Modesto’s most frustrating blight case, off the books at last.

Bee columnist Jeff Jardine can be reached at jjardine@modbee.com or (209) 578-2383. Follow him on Twitter @JeffJardine57.

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