True Gotham

Readers of TrueGotham know how excited I have been about the apparant win-win-win formula that comes from raffling a house.  The owner gets out from under a mortgage, a charity benefits from the money raised above and beyond the mortgage  or appraised value amount, and the winner gets a home for the price of a raffle ticket.  I have absolutely acknowledged that the winner also has to pay taxes on the winnings but never dreamt that would be such an obstacle. 

First, I'm very sorry to report that it seems as if more than 90% of attempted house raffles have failed.  In Maryland where the SanMar raffle of a house in Hagerstown was a "success," the 10th house raffle of the year is being attempted and according to the Maryland secretary of state's office only the one in Hagerstown, has been "successful" so far (via Washington Post). 

So what defines a successful house raffle.  In my opinion it would be where the mortgage is paid, the charity makes money and the winner can either afford the taxes on the winnings or sell the home for a profit above and beyond the tax liability.  So by that definiton, the Hagerstown raffle was NOT a success...at least not yet.  Check out this report on the SanMar raffle winner from WJZ-TV in Baltimore:

Kelly McPherson reports selling a house is getting tougher, even if you won the house for a $100 charity raffle.

That's what happened to a Hagerstown man earlier this year, and now he's stuck with a house he can't sell to cover the costs of his win.

Who would have thought that winning a home in a charity raffle would turn out to be a curse?

"Up until last night, I never regretted buying the ticket. Now I'm a little worried," said Dennis Weaver.

A sad ending to what appeared to be a wonderful story.  With many housing markets across the country still in decline, the risk of winning a home that's value can quickly become less than the tax liability may become a reality.  When I purchased my tickets for the Hagerstown home, I first saw it as an opportunity to help SanMar but I also thought that if I won, I would be able to sell the home for about $50,000 more than the taxes due.  Thank goodness I didn't win!  Because of this tax issue, many are coming up with creative ways to circumvent this problem.

New Jersey resident and homeowner Jacquie Davies has come up with what may be an ingenius way to conduct home raffles without the burden of the tax liability on winnings.  On her web site ownahomefor100.com she asks that "entrants" pen a 50 word essay on what homeonership would mean to them and their family and send a $100 "gift" for the opportunity to be selected to purchase her home for $1.  It's a very interesting design and she is donating part of the proceeds to Save The Animals Foundation.   I wish her the best of luck as she is even considering petitoning congress to change the laws regarding house raffles to enable more homeowners to avoid foreclosure. 

It remains to be seen if someone will develop a way to truly make the house raffle a win-win-win and a viable means for underwater homeowners to move on with their lives.

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PLEASE READ THIS ENTIRE BLOG ENTRY:

WE DO NOT RAFFLE HOMES...so contacting us to assist you with a house raffle will be a fruitless effort. 

Good Luck to all of you!

I've decided to re-post this blog entry because of the overwhelming amount of traffic that this site is getting from people interested in raffling their homes...a sign of the times indeed.  Many have suggested that some sort of National Raffle could contribute to solving this country's housing woes.  An interesting concept.  Below is the original post on How to raffle Your House followed by an update including a link to Charitable Gaming Laws for each state in the country (it seems Florida doesn't allow raffles and might want to consider changing that legislation).

With housing markets slumping across the country, I have been receiving an unbelievable amount of inquiries in to just how to go about successfully raffling off your house. Since I have absolutely NO experience with such a house raffle, I posed the question to Bruce Anderson, CEO of San Mar Children's Home and one of the successful orchestrators of such a raffle that took place in Hagerstown, MD. It's not easy at all says Bruce but he graciously offered the following for anyone who is considering a house raffle:

Having just completed a very successful house raffle in which we raffled a house ($380,000) and a car in 77 days resulting in a $214,000 net profit for the charity we have been besieged with calls and emails from all across the country asking us to tell others how to do it. The Maryland Secretary of State, the office issuing the required permit to conduct a house raffle, tells us that since the conclusion of our raffle they have been receiving more permit requests than ever before from persons who desire to replicate what we have done. Unfortunately, most will fail.

Conducting a house raffle is a high-risk adventure with no guarantee of success. With that having been said let me share a few of the observations, if not actual lessons, gleaned from our recent experience:

1. Do your homework ahead of time. Many raffles fail due to the persons beginning without a good understanding of what is involved in the process, and therefore plan improperly.
2. Get the right nonprofit from the outset. Each state is going to require that the raffle be conducted by a nonprofit organization. If you are the homeowner it is vital to match up with a charity that has the ability to accomplish such an event. How can you tell? Well, as stated earlier there is no guarantee, however, look for the following: Do they have a track record of knowing how to raise money? Do they have an active board that believes such a project can succeed? Are they as a board willing to work to make it successful? Have they helped other projects of the organization? Do they have connections to the media? What is their reputation in the community? What is their appeal to the broader community beyond the local area? Do they have vision for their organization?
3. Beware of narrow marketing. Market beyond your local community. Many raffles fail due to marketing only to their own community. One of the biggest mistakes is to not allow enough time to complete the project. Typically a house raffle should take between six and eight months. That may be true, however, we completed ours in 77 days due to marketing beyond our own community. Additionally, do not limit marketing efforts to any one or two actions. For example don’t think sending letters to your mailing list and a letter in the paper is going to sell all your tickets. Get as creative as you can and generate as much momentum as possible in as many ways you can. Some of the things we did: Sent a mailing to our mailing list, put up posters all over the county, contacted the local paper and convinced them of the interest behind a family raffling their home (we ended up with 6 front page – Sunday editions that specifically talked about he story), The local TV station picked up the story, AP press ran the story opening the door to numerous newspapers around the world, we ran a story in the Chamber of Commerce newsletter, we spoke before service groups, we wrote of the event in numerous blogs, we contacted radio stations all over America and shared how we had a AP story of interest. That lead to numerous interviews. One radio station in Florida followed the story regularly interviewing the Realtor we worked with at regular intervals. These are just a few!
4. Set up a website for on-line (secure) credit card purchases. Have this in place as soon as you are ready to go. We had our website and credit card processing system in place but not before the local paper ran a front page story of what we hoped to do. We were able to contact an Associated Press reporter and convinced him to pick up the story. The problem was that the story went national before we had a permit. We simply took orders and did not process any cards until the permit was in hand. Include on the website a counter that gives regular and accurate feedback as to the progress of ticket sales. We were amazed at the number of people who were following the progress daily (We also set up a stat counter on the website).
5. Pay absolute attention to details and use integrity in everything. We maintained meticulous records of every ticket sold. We kept all ticket stubs in alphabetical order so when someone called and told us they purchased a ticket on-line and never received a stub in the mail we were able to at once find their records and get a copy to them. At the end, the day of the drawing, we turned everything over to a CPA firm and had them conduct an audit on all the tickets so that we could testify to the truth of a ticket being in the barrel for every person making a purchase.
6. Determine to enjoy the process and attack every obstacle with tenacity!
   These are just a few of the things we did and learned. Will we do it again? We have certainly been asked … we shall see!
   
   Bruce T. Anderson, CEO San Mar Children’s Home

Thanks so much Bruce for your time and energy in providing these excellent tips.

And to those considering this as means to unload your house...

REMEMBER...IT AIN'T EASY!!!

Update November 2008:

The amount of traffic to this site and this post specifically has been overwhelming and a strong indication of the masses of people who are struggling to sell their homes.  Since I have no personal experience with running a successful house raffle and certainly can't help anyone raffle their home, I am offering the following link that I think is the best place to start to determine the state office that you must contact in order to get the proper permits/licenses to hold a charitable raffle.

State Charitable Gaming Laws <---this is the LINK

Update December 2008:

Please read The Sad Truth About House Raffles.  Most of these raffle attempts are failing.

Posted By Douglas Heddings | Permalink | 124 Comments | Email This

It wasn't long ago that the San Mar Children's Home in Maryland successfully raffled a house to both raise money for charity and get the property off the hands of the owners.  Given the number of inquiries I have received since posting that story, it indeed seems that house raffles are becoming more commonplace in depressed real estate markets across the Unites States.  Now there is another raffle taking place in Maryland and this time the proceeds will benefit our troops through the charity AnySoldier, which is the brainchild of Sgt. Brian Horn.

AnySoldier is a non-profit 501 org and support the troops serving in harm’s way. It started five years ago when Horn parachuted into Northern Iraq with the 173rd Airborne. He stayed on the ground for a year and after 5 months finally got to call home. He asked his parents to send more care packages because his buddies didn’t get any mail from home. This was the beginning of Any Soldier Inc. On Feb 14th they exceeded supporting 1 million troops! Currently, Horn's sister is serving in Iraq. 

An awesome cause indeed and one that I will definitely be supporting.  Here is the press release from AnySoldier regarding their current house raffle:

Any Soldier Inc., a 501(c)3 non-profit charitable organization, is holding a real property house raffle for the support and benefit of our troops. Homeowners Steven and Natalie Skyrm have offered their home to conduct a raffle where the net proceeds will be for the exclusive benefit of Any Soldier Inc. Raffle tickets are $100 each and will be sold online at www.AnySoldierHouseRaffle.com. The home is valued at $835,000 and YOU could be the proud new homeowner.

Any Soldier Inc. currently helps approximately 100,000 service members in all branches of the military, both active duty and reservists, with over 3500 military service contacts. Any Soldier Inc. supports America’s troops in dangerous deployments by facilitating a connection between our citizens and our servicemen and women. The Any Soldier® effort has given hope to most and inspired many of our soldiers knowing that the public will care for them and support them until they return home safely.

AnySoldier Inc. provides information on how anyone can send letters, care packages, and other demonstrations of support, as well as establish networks of soldiers who will be responsible for the delivery of these items. Any Soldier Inc. also aids in the facilitation's and delivery of medical, school, and other humanitarian supplies to the soldiers who donate their time and expertise to the people of the nations they are assigned. Any Soldier’s programs include not only supporting our troops deployed in the war directly but also our wounded soldiers who have arrived home safely. Many of the supported efforts can be seen on the organization’s website.

The house, located in Prince Frederick, Maryland, approximately 30 miles from Washington, D.C., is a single-family custom colonial located on approximately 8 acres with water view of the Patuxent River, approximately 5100 square feet, five bedrooms, 2.5 baths. It is a beautiful farm property with 5 stalls, barn and 6 paddocks.

The drawing will be held at the property on Veteran’s Day 2008, Tuesday, November 11, in honor of our troops. The 2nd through 5th place raffle winners will receive cash prizes. You can purchase tickets and see rules and regulations (including those relating to the winner’s tax obligations) on the website.

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Yes indeed there is yet another house being raffled for $100 per chance.  Remember the SanMar House Raffle?  That was a smashing success raising over $200,000 for the SanMar Children's Home while allowing the sellers to get the $380,000.00 for which the home was appraised. This time the 2900sf home belongs to a NJ woman who is raffling the home on eBay.  From WCBSTV.com:

Looking for a house in New Jersey? How about four bedrooms, a huge living area, cathedral ceilings and a stone fireplace for, say, $100?

"One hundred dollars, yes," owner Sharon Hart said.

Say hello to Hart and her 2,900 square-foot ranch home in Willingboro, which admittedly could use a coat of paint, but is now available on eBay, she says, for the rock-bottom price of $100.

The obvious question: Why?

"Well … I had the house on the market for about two-three years. It's not selling so I need to get rid of the house. I cannot afford it anymore," Hart said.

Now of course there is a catch. Not a big one, but a catch nonetheless.

"The house is being raffled off," Hart said.

That's right. Hart says the house will be sold via raffle on eBay -- $100 per entry. And who knows how many hundreds or thousands of people are competing for it?

When asked how much money – or entries – she needs, Hart said, "About 2,000 people to purchase the tickets. To pay the mortgage off."

If Hart doesn't get what she wants, she says she'll keep the crib and return everybody's money. If she does, she says somebody will be getting a house – for a C-note.

Hart says the raffle will be drawn on May 1.

Good luck Ms. Hart.   Several people from across the country have emailed me and commented on TrueGotham that they too would like to raffle their homes.  Both of these seem like viable options but I have a strong preference for the SanMar way where a charity benefits from the sale as well.

Are we going to see a trend here?

For tips and advice on conducting your own raffle, check out How To Raffle Your House.

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For those unfamiliar with this story, here's a snippet from WBAL-TV in Baltimore:

"Well, the real estate market has been compromised over the last two years and so we decided to hold a raffle to sell the property and to benefit a charity," Crawford said.

The house sat for a year in a stagnant real estate market. Crawford's dedication to the youth drove this idea.

"I've been a teacher all my life and my focus has been children. And naturally I thought of San Mar because it's very nurturing and rebuilds the lives of children with difficult life experiences," she said.

San Mar's Children's Home For At Risk Girls is celebrating its 125th year. It provides residential care for adolescent girls who have been abused, neglected or have behavior problems.

Director Daniel Day sees this raffle as a win-win for the homeowner and the children's

6,284 tickets were sold over 73 days in a win-win situation that sees desperate owners and a wonderful charitable organization walk away very happy.  Not to mention those who won the house and runner-up prizes.  Here are the WINNERS:

• House: Dennis J. Weaver - Hagerstown, Maryland
• Car: Randy Huff, Maritzea Falcom - Adamstown, Maryland
• Carpet: Dennis Wayne &Vicky Myers Jr. - Boonsboro, Maryland
• Furniture: Brian Kopp - Rochester, Minnesota
• Cash: Kenneth L. Clagett - Henderson, Nevada

Since the house re-appraised at $380,000 and Realtor Cynthia Moler donated her commission, San Mar Children's home raised over $200,000 for their cause!

Although all house raffles haven't been so successful, the outcome of this one makes me think that some sort of National Lottery System could be modeled after this in an effort to simultaneously assist desperate homeowners while raising money for charity.

For tips and advice on conducting your own house raffle, check out How To Raffle Your House.

Posted By Douglas Heddings | Permalink | 1 Comments | Email This

I'm re-posting this story yet again because I think it's brilliant and it's a success...so far.   Check out the comments section below though as more is revealed about the history of this home.

From WBALTV.com in my home town of Baltimore comes this incredibly creative and ingenious marketing strategy for selling your home in a down market.

HAGERSTOWN, Md. -- Frustrated by a nationwide housing slump, a western Maryland couple is selling raffle tickets for their $390,000 house and hoping they'll sell enough $100 tickets to get the farmhouse off their hands. (3900 tickets and they get their price!)

Dennis Kelly and Karen Crawford put the four-bedroom house for sale for $425,000 a year and a half ago. But they say the housing slowdown means they haven't had any takers. The house is now valued at $390,000.

The real beauty in what Mr. Kelly and Ms. Crawford are doing is that all of the proceeds above and beyond the $390,000 will go to benefit the San Mar Children's Home.  This seems like a win, win, win (yes three wins) to me.  At $100 per raffle ticket, it's highly likely that more than 3900 tickets will be sold.  The sellers get their price, San Mar will likely make a considerable amount of money, and one lucky winner will get a $390,000 house for $100!  With additional donations from local businesses the raffle offers a total of five prizes.

The four-bedroom house will go to the grand-prize winner. Second prize is a 2008 Toyota Camry, third prize is a Persian rug, the fourth is furniture and the fifth prize is $1,000 cash -- all offered to raffle organizers by a local car dealership and furniture store.

The raffle has been approved by Maryland gaming authorities.  Assuming 5000 raffle tickets are sold, the odds are not bad and knowing that the excess $110,000 goes to a worthwhile charity makes the $100 ticket price that much more palatable.

In Manhattan, we would only have to sell about 15,000 raffle tickets at $100 a pop to sell the average priced apartment.  So will 2008 be the year of the housing raffle?  It seems that in some markets across the country, we are going to see some very creative marketing strategies.  Here on the home front, creativity hasn't yet become a necessity.

Here's the complete listing for the house.

There is still time to buy a ticket.  CLICK HERE to purchase online with a credit card or download a pdf and pay by check.

UPDATE:  They have sold well over the minumim of 5000 raffle tickets making this a win-win for the homeowners and SanMar.  The raffle is being held tomorrow, Thursday March 13!  I will post winners on Friday.

For tips and advice on conducting your own house raffle, check out How To Raffle Your House.

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Win a House, Car, Cash or More!
Enter San Mar's Annual Raffle Today
Order your tickets at www.sanmarhome.org  
or www.sanmarraffle.com  
Hurry -- Drawing Date is March 13
Raffle Limited to 7,000 Tickets

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