The first time Thomas Blum tried to sell his house the conventional way -- with a broker, a Realtor and a "for sale" sign on the front lawn -- he struck out. He even lowered the price three times, eventually bringing it down to the amount he paid six years ago for the three-story row house in Shaw, but still there were no takers.

So Blum decided to raffle off his house. He placed cardboard signs in his bay windows on Eighth Street NW saying, "Buy a ticket and win this house," and he sold 1,000 tickets at $10 apiece in the first week.

It was then, as he started to feel "terribly optimistic for the first time," Blum said, that he learned his operation was illegal, and he is faced with having to return all the money he collected.

"Why can't I sell my house whatever way I want?" complained the 32-year-old former real estate broker, who said he had hoped to sell a minimum of 11,700 tickets in order to make a profit on his house. "I think it's crazy . . . . I'm not out to do anyone harm; in fact, I was going to give a $100,000 house to someone for just $10."

But according to the Charitable Games Division of the D.C. Lottery, only nonprofit and charitable organizations that have been incorporated in the city for at least a year are eligible to hold raffles. They must also have at least 20 members who are District residents.

"People come in our office with all kinds of good causes for holding a raffle. Everyone wants to feed starving people ," said Vivien Cunningham, assistant director for charitable games. "But the law says no individual can hold his own raffle . . . . We do this to protect the people who like to gamble and buy these tickets. Anyone can run off with the prize."

Blum, before learning that his operation was illegal, sat in his front yard at 1532 Eighth St. NW perched on a small red chair, watching passers-by for potential ticket sales.

"Most of the people tell me that it is too good to be true, and then they come out with the money," said Blum. "No one ever questioned whether it was legal or not."

Leonara Lewis, who lives two blocks from Blum on Rhode Island Avenue NW, passed the house in a hurry en route to a nearby Giant Food store, but she stopped to read one of the yellow fliers posted around the house.

"Dream House Raffle . . . Live like a King and Queen," she read. "How much is the house?" she asked.

"You pay only $10 and I pay all the closing costs and tax," replied Blum.

After leading a short tour through the three bedrooms and 2 1/2 baths, down the spiral staircase into the living room, through the large kitchen and out the back door to the three-car garage, Lewis stood on the front porch and sighed.

"We are not rich people, and we pay a lot of money where we live, and we'll never own," she said. "I can say this neighborhood is very good because I've lived here for seven years . . . and I would love to have this house."

Blum said that "after testing the waters for a year," he realized that the house was "overbuilt for the neighborhood."

"It is too nice for this area. No one who can afford to pay my price is willing to live here in this neighborhood because it's not gentrified enough," said Blum.

"That is why my raffle is such a good idea, because this way someone who cannot afford such a house but would love to live around here can have their dream come true for simply $10 . . . . That's just the price of two movie tickets," he explained."

Blum said he bought the house for $90,000 six years ago and is asking now for no less than $115,000.

But Roslyn Abitol, a broker who has been trying to sell the house for Blum, said she thinks his price is too high for the neighborhood, though the house might be worth it.

"The people who see the house think it's great, they think it's sexy, but they don't qualify for the loan," she said. "Not everyone wants to pay that price for the only renovated house on the block, but I still think he might do better leaving it up to a professional."

Blum said he still plans to raffle his house but will do it legally by finding a nonprofit organization to sponsor him, perhaps a church in the neighborhood.

"These obstacles are small," he said, "and I come from a long line of fighters. This house will be raffled and I will get my asking price, you just wait and see."