Priced to Move : Salesman Has Some ‘Real Charmers’ on Used-House Lot

Tony Lozano strolls through his used-house lot with a customer in tow and stops in front of a battered pea-green bungalow with splintered redwood trim and boarded-up windows.

“This one’s a real charmer,” Lozano says cheerfully.

Lucy Valdez studies the carport, which gives new meaning to the term “detached garage.” It had been sawed off from the house.

Lozano is undaunted. “Give this house a little face-lift and it’ll look like new.”

Valdez peers inside the house and then mentions that she likes the size of the kitchen. Lozano, smelling a sale, extends his palms toward Valdez. “Tell you what I’m going to do. I’ll let you have this place for $22,500, sold and delivered right to your lot.”

The house, which is precariously balanced on a few rusty beams, is not exactly a model home. But compared to the cost of most houses in California--the median home price in the state is $197,000--Valdez knows it’s a bargain. So after climbing inside and examining the interior, she tells Lozano that if her husband also likes the house, he has a deal.

For 30 years, Lozano has been hawking houses on his lot, a 20-acre field just outside Stockton filled with structures in various states of disrepair. He has a reputation in the San Joaquin Valley as a man who can provide housing for farm laborers and cannery workers, for families with no collateral, no down payment and no equity.

And now, because of the dramatic increase in California real estate prices, an increasing number of middle-class people are buying homes from Lozano. To many in the San Joaquin Valley, Tony Lozano’s Used House Lot is the last resort in affordable housing.

“Some people who make pretty good money can’t even afford a tract home today. As prices continue to go up,” Lozano said, expansively waving an arm toward his lot, “this is going to represent the future.”

Lozano, 67, greets customers wearing a wide straw hat and cowboy boots, refers to his houses as “steals,” and “charmers,” and generally runs his operation like a used-car lot. And many customers check out the houses as they would a ’79 Dodge with the sticker price on the windshield. They kick the walls to see if they’re solid. They climb underneath the houses and poke around, checking for dry rot. They run their fingernails along the stucco.

There are many house-moving firms, but Lozano has the only lot in the state with an inventory and a sales office on the property, said Ed Kay, president of the Housemoving Contractors Assn. of Southern California. A business like Lozano’s would be impractical in Los Angeles and most other metropolitan areas, he said, because obtaining a 20-acre lot would be prohibitively expensive.

Lozano has sold more than 2,500 used houses, most of which were once slated for demolition to make room for freeways, shopping centers or housing tracts. Business always has been good, he said, but in the last decade, as California real estate has skyrocketed, he has been selling houses as soon as they hit the lot.

His houses usually sell for between $20,000 and $40,000, including the transportation. He will move any house within a 125-mile radius and will even provide his low-income customers with financing for up to a year.

Lozano decided to open a used-house lot when he purchased 70 houses that were slated for demolition. He was facing a removal deadline and wasn’t able to sell all the houses in time.

“I started thinking that maybe you could sell houses just like you’d sell used cars,” he said. “Volume’s the name of the game, and with a lot I could definitely increase my volume.”

John Patton, an electronics technician, has a 10-acre lot near Stockton with a 2,100-square-foot, Tudor-style home that he purchased from Lozano. The house, with hardwood floors and a large flagstone fireplace, was once on a 40-acre ranch that was recently subdivided. Patton paid Lozano $36,000 for the house, spent about $15,000 in wiring, plumbing and other restoration costs and paid about $90,000 for the lot--a total cost of $141,000. A comparable house on 10 acres in the Stockton area would cost him, he said, almost $500,000.

“We looked at new tract homes in Modesto--places we could afford--and didn’t like the feel of them,” Patton said. “For what we wanted, this was our only option.”

Lozano said his problem now is not selling houses, but finding sufficient inventory. He has only one rule when purchasing a used house: If it doesn’t have termites, he will buy it. Dry rot can be cut out, he said, but termites keep on munching.

“If I had 100 houses on the lot now I could move them like this,” he said, snapping his fingers. “I can’t get enough houses to keep up with demand.”

When Lozano finds a house, his crew usually slices it in half--”like a loaf of bread,” he said--jacks it onto trucks and transports the house to the lot. For an additional $5,000 to $7,000, Lozano’s crew will put the house back together and lay the foundation, but many of his customers are handy, he said, and make most of the repairs themselves.

Sometimes Lozano’s houses are in such demand that people fight for them before they even reach the lot. He bought a four-bedroom Victorian in Stockton that was scheduled for demolition, but before he could move the house, a woman who lived nearby told him she wanted to buy it. They made a deal and she promised to return with a cashier’s check in a few days.

The next day Lozano’s workers were transporting the house through the streets of Stockton on their way to his lot when another couple spotted the Victorian and “fell in love with it,” Lozano said. They offered to write a check on the spot for $13,000 if the house was delivered right to their lot. Lozano’s workers agreed.

They turned around and were heading toward the couple’s lot when the original buyer spotted them towing the house down the highway. She informed the driver they were taking her house down the wrong road. But Lozano’s workers said the house had already been sold, and they delivered it to the couple’s lot.

“The woman was really hot,” Lozano said. “It turned out to be a mess. My workers made a mistake, but what could I do at that point. I ended up getting sued.”

The transactions are much simpler, Lozano said, when he can sell houses right off his lot. His ramshackle bungalows, ranch-style houses and white clapboard farmhouses are set in two rows, 12 abandoned structures in the center of a vast lot, like a Hollywood set after the cast has gone home.

“It’s true that some of these houses don’t look like much,” Lozano said, surveying his inventory. “But,” he said, shrugging, “the price is right.”