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Archive for June, 2010

Fighting and Resolutions

June 24th, 2010 at 01:31 pm

BB and I got into a mini fight again a few nights ago. We handled it pretty well but it was still stressful. It started when our contractor friend who will be working on The Impulsive Purchase called me over to a project he’s been working on for the last few months. The couple bought a historic duplex and are converting it into a SFH. Exactly as we plan to do. I have been keeping tabs on the progress because we will be following in their footsteps. Their costs have spiraled up but that was due to unforeseen defects and then a lot of additional high end upgrades.

I went over there and it is pimped out. The place looks phenomenal. They are still working on the first floor but they are doing a lot of nice details. Tray ceilings, built in bookshelves, glass doors and wooden design in their concrete floors. Not only am I impressed with the contractor’s skill, but also just how much it is starting to look like it should be on HGTV!

Anyways, then the contractor starts telling me about how BB and I are going to need more money to get anything like what he did here. I kept telling him “but I don’t want an outdoor shower” and he kept giving me this look like “you say that now…” (but I really don’t). He had told us when we bought the place that we could convert it to a SFH for $40k. Now he’s saying that will cover the first floor. He’s telling me that if I put $80-100k into the house it will hold it’s value in that neighborhood (he’s also a realtor).

I totally got annoyed and called BB. I was venting to BB and BB started taking the contractors side! Saying things like, “well, lets say we just put $65k into it and maybe don’t do the upstairs for a year.”…what!? NO! We were told we could do it all for $40k, that was a condition put in place before we bought it. The argument grew. A lot. My CA property got dragged into it with using it for a HELOC (I was telling BB we don’t have equity to get that kind of money out of our properties anyways. I was really thinking I just don’t want to borrow that much but used our equity as an obstacle.) Then the CA HELOC argument turned back into “we should sell it” and then it turned into “Gamecock your going to do whatever you want to do so just tell me what we’re going to do. Since I have no say in the matter.”

It went on like that for a while. We eventually came to a resolution but we don’t really see eye to eye on the two main argument points. I am angry because BB PROMISED me that we could do it all for $40k. Does he know ANYTHING about construction? No. But I told him that I didn’t think it could be done and didn’t want to buy the property. BB talked to his contractor friend and then repeatedly matter of factly told me it could be done. I told him that I don’t want to hear later that they need more money. Now we are hearing that we need more money and BB is just going along with it! He didn’t question it then, he’s not questioning it now. He’s doing zero research –just agreeing to whatever he is told. It makes me SO MAD. I feel really deceived. I trusted him against my better judgment.

And he is angry because I have been using the income produced from the CA property to put into savings in case we need to do a big renovation job out there some day. In case of an emergency or in case we want to remodel it before selling it or whatever. The money in the account is enough to cover the additional costs of The Impulsive Purchase. BB of course wants to raid it and does not think we should have the account in the first place. Because we need to sell the property. Today. As is.

We did find one lightbulb moment. BB kept asking me if we could afford to take out a $65-80k HELOC. I kept interpreting it as "Why CANT we take out a $65-80k HELOC if we can get it?" And would hysterically yell "we cant afford it!" Until BB made me sit down at a computer and plug in the numbers in an online calculator. The payment was going to be about the size of our mortgage payment. BB asked... "can we afford to pay that every month?" to which I said "No we dont have the income. Maybe next year when we both have raises but not today." And that worked. BB said "Fine. We might have the equity to borrow but we dont have the income to pay it back. We're not flipping this house so we need to make sure we can make the monthly payments. And we cant. So we stick with our original numbers."

So we eventually agreed to divide up The Impulsive Purchase into 3 stages. The first stage outlining what we can do now with the money we have. And then see if we can live with that until we have the money for the 2nd (finishes) and 3rd (outdoor) stage. We’ll work with the contractor to create the plan and budget in the next few weeks.

So there is peace in the household today. I say cautiously.

Tenants are still confused

June 18th, 2010 at 12:13 am

Today both tenants showed up. They still cant get on the same page. "J" is still completely excited about the place. "6 month guy" has serious concerns about the neighborhood and now refuses to sign a lease so he can move out if something happens. "J" thinks the concerns are unwarrented and is willing to let 6 month guy be noncommittal. So only J signed the 6 month lease and 6 month guy agreed to pay J every month.

The third roomie "T" is willing to move in in September but the 3rd bedroom wont fit his queen size bed (3rd bedroom is about half the size of the other 2 rooms). So T is dragging his feet... (and why don't T and 6 month guy switch rooms since 6 month guy doesnt think he'll stay anyways?) So I suggested they use the living room as a bedroom, and the 3rd bedroom or finished attic as a living room. J was kind of blown away by that idea and is going to figure out how that could work.

I think J just needs 1 roommate. If its T its cool, if its 6 month guy its cool. So 6 month guy will try it out- and if he doesn't like it by the time T can move in- then 1 will move out while the other moves in.

So J is on his own here. Poor guy. Sweet personality- I hope he can work it out.

I negotiated $100 off the prorated rent for June. J wasnt expecting to have to pay anything for June because his lease at his other place is not up till July. So he thought he could just move his stuff in upstairs and leave it here while he was living at the primary place. Then move in in July and start paying rent.

That's not really gonna happen, but I also want to collect something rather than nothing- so I knocked $100 off the prorated rate. J paid me in cash. He has the keys- tomorrow I am canceling my name on the utilities...hopefully this is an open and shut case.

please please let us have a quiet couple of nights in the neighborhood while 6 month guy is moving in!! J and I both think that once 6 month guy gets used to everything he will calm down and appreciate how close it is to the downtown bar scene (not walking distance, but $5 cab ride distance). But maybe not. Some guys are nervous, they act nervous and they become a target. We'll see.

my tenants are confusing

June 16th, 2010 at 08:20 pm

Well the new tenants were supposed to come by today during my lunch hour to get the lease signed for the upstairs apartment. Only 1 boy showed up. We couldn’t track down the other boy. But the guy who did show up walked around and made a comment about being happy with the apartment and wishing he could get the lease signed so they could move in.

Then as he was walking out the door he turns around (I am behind him) and says “I’m graduating from school in December and don’t know what I’m going to be doing so I want to sign a 6 month lease.”

…WHAT!? This was never brought up before!

I was stunned and then he quickly filled in the awkward silence “I mean “J” can sign a lease for a year. But I want to sign a lease for just 6 months.” (Does that even make sense?)

I was not able to recover from that very well. I told him that he needs to formulate a plan with J and let me know what they want to do. They can sign a 6 month lease together, or a 1 yr lease together- but not 2 different leases. (Reflecting on the conversation afterward I HATED agreeing to the 6 month term- December/January is the worst time to find renters.)

Anyways, J called me an hour later apologizing for missing the appointment. He “woke up around 9am…but then fell back asleep around 11am.” (As if it was a praiseworthy accomplishment to wake up in the first place at 9am.)

I told J to talk with his friend about their lease plans because now the other roommate needs to be out in December.

J called back a few hrs later and we rescheduled the lease signing for tomorrow evening. I asked what they had decided and they are going with a 6 month lease (cringe) though J said he will probably sign on for an additional 6 months after the lease expires but that he wants the option to leave when "6 month guy" goes because he will need to find a roommate.

But they have a 3rd roommate coming in August. I think. “T” walked around a few weeks ago and seemed to like the place. But maybe privately he said no. I don’t know. T is not signing anything, J and 6 month guy are signing the lease.

If T moves in in August I think J and T will stick it out through the year. Both boys are in college and I doubt they want to be moving their furniture if they don’t have too. Especially if T is moving everything in August- he’ll have 5 months before possibly moving out again. So hopefully T is on board to move in. I’ll ask tomorrow.

If it’s just J and 6 month guy there is still a good chance that 6 month guy will stay on for the 2nd 6 months. 6 month guy needs to find a job. If he finds one in the area –he stays. If no job comes up- he probably stays too. If he finds a girlfriend he likes- he’ll probably stay.

I try to look at the bright side- 6 month guy is paying a non-refundable pet deposit for the dog being there just 6 months. In 6 months the dog might be out but I will still have the big deposit.

I just want them to move in. Theyre not a very organized group…I feel like they are little wanderers who will wander to the shiniest object. A shiny new place for $40 more a month just came up on the rental market. I don’t want the boys to get distracted and wander over to that place. Heres hoping I lock them in tomorrow night.

was stressed...now I am not.

June 15th, 2010 at 02:06 pm

YES!!! Doing the very happy dance.

This is a weird thing to read I am sure because I have not let on that I was UNcomfortable, but I was and I didn’t know it. I felt a little stress whenever I thought of our finances, I would go through phases of obsessively running numbers to gauge future savings goals, but I felt like that was a part of being a grown up- always a certain amount of burden that you live with.

I have been slightly uncomfortable…well since the Impulsive Purchase. I don’t know how to explain it really but when BB was a baseball player and earning less than $10k a year our day to day expenses were stretched. Then when he got a job as a coach 7 months ago our yearly income more than doubled.

So what did we do? We bought a fixer upper property (The Impulsive Purchase). We used up all liquid savings we had outside of our emergency fund, retirement or property equity on the closing and 3.5% downpayment. We raided savings accounts that were meant for other goals such as future cars, primary home renovations ect. And after the closing a few minor expenses came up that kept us a little more behind than we had planned. AND THEN! Everyone I know decided to get married this year. In an exotic location. 5 trips in one year.

Looking back now we had taken on more commitments than we could handle if everything came tumbling down. We had been looking at the monthly numbers of what we could afford with BB's new paycheck- not if we could afford it right that day. I subconsciously knew it and didn’t really know how to recognize it. So I just felt uncomfortable. Low level stress all the time.

But today we have made it through to the other side. One trip completed, two trips canceled, one trip already paid for, and one trip not yet on the books. So those obstacles no longer weigh on me.

And today, BB got his paycheck for the month. It has put us ahead of where I thought we would be in mid June. Today we broke the $4k mark on the emergency fund (we almost didn’t- but I added an extra $85 in today just to see the account reach that number ). BB has $700 saved for his future car (we expect him to need a new car sometime late next year). All our other mini savings funds are at a point where they will be enough if we need to access them today. And my bill paying account is now in the black where I can handle several of next months bills if my paycheck this month never comes in (for some freaky reason). The account is no longer paycheck to paycheck.

I feel good. It's only 10am and I feel like I have accomplished a lot. Bring on that air conditioning repairman. Today I am ready for him!

HELOC it is

June 13th, 2010 at 10:06 pm

It’s been some time since I have posted a money related blog. I have been caught up in life (work) and less caught up in money. I think it is because our budget and expectations have finally settled down since The Impulsive Purchase. We have the same amount of money back in the bank that we used as a down payment on the property, it’s been a few months and the place (and tenants) are showing no signs of problems. And I have tenants lined up to move into the upstairs unit. They’ll be signing the lease on Wednesday. The only cause for concern I have is that the air conditioner is leaking when I run it. BB says he thinks the pipes are clogged. I'll be calling a maintenance man tomorrow. Luckily I have been saving up for an air conditioning tune up and have $300 saved. I hope that will cover whatever is wrong.

So this weekend I called around about securing a HELOC or HEL on our property so that we can start the process of converting The Impulsive Property into a SFH. I think we are going to go for a HELOC…it’s cheaper-ish than a HEL. It’s a variable rate interest that concerns me- but we can leave it dormant for several months (construction is not scheduled to start until October) without having to pay anything, and we can pay it off and leave it open as we need.
BB initially wanted to get $50k but based on the equity I think we will qualify for $25-30k. This makes me happy. It will keep us more efficient and less extravagant. I thought of taking the amount out of my inherited IRA but decided against it for a few reasons:

I don’t want to mix my inheritance into my and BB’s stuff. In the event of a divorce the property would be split despite the fact that my inheritance paid for almost the whole thing.

I don’t want to get into the habit of using the IRA as an ATM. I decided long ago it would be for retirement and that’s what it will be for. People don’t raid their retirement accounts for house renovations (or they shouldn’t) and I am not an exception.

The stock market is crazy these days. Maybe some people say I am taking money from investment stocks into another investment vehicle but I want to try and be diversified. So the money stays in stocks.

I am of course not happy about taking on additional debt but think that the long term rewards will be worth this risk.

Rental Unit Painted

June 13th, 2010 at 03:05 pm

I have been painting the upstairs rental unit and as promised- pictures!

Some learning tips:
I bought more than enough paint for the entire place to be painted and I completely burned out halfway through. The 3 bedrooms and living room were painted. The hallway and kitchen were left white. I have 3 gallons of unopened paint left over.

I really like certain colors. I chose the colors in my unit that I live in downstairs- and when picking upstairs colors I wanted to try out other colors. I picked out a few colors and decided to give them a try. One bedroom is THE EXACT SAME color scheme as my dining room. I thought the colors were totally different until I stepped back and realized "OMG! These are the same colors as downstairs!" Oh well. I like them.

I picked out a historic yellow for a bedroom and a more neutral creme for the living room. They are the same color. On the walls- they look the exact same. Oh well.

I found THE PERFECT COLOR Blue. In my downstairs unit- 4 of the 7 rooms are a shade of blue...but it was not until I stumbled on this blue when painting upstairs that I realized I found my color soul mate. Walking into that room instantly relaxes you and just looks so beautiful. I tried to capture it in the picture but the photography does not do this blue justice.

Here is the kicker: The blue is a "custom color match". I ordered 6 sample cans based on paint chips and took the sample paint home. One of the sample jars was this blue. But I do not have a paint chip to match it to and the color sticker on the jar says "custom color". It's a mysterious jar that I somehow got and it held my magic color. Oh I love this blue!

And 2 of the unopened gallons will go to future use. I want to use the Living Room yellow in the kitchen of the new property, and I will use my Soul Mate color in the next property as well. Either the living room or master bedroom.

The yellow living room that was supposed to be neutral:


The bedroom that is the exact same color scheme as my dining room:





My SOUL MATE Color:





Historic Yellow that ended up being the exact same color as the yellow living room:

Hey FrugalTexan

June 7th, 2010 at 07:07 pm

A librarian position is opening up at my employer in Austin TX. The job starts in January but they will be hiring soon. I don't know how far you are from Austin but I know your in Texas. I am pretty sure you are going to school to be a librarian...right? If you want more info let me know. I don't know how to do private messages.

Spent a lot on not very much

June 3rd, 2010 at 08:48 pm

I have not been around because I have been painting whenever I am not at work. The tenants moved out last weekend and I have been working hard on getting the upstairs apartment ready for the new tenants.

Everything costs more than I anticipated. I have spent $500 on not very much.

I had a guy come out to look at the plaster walls. He told me it would be $220 to repair the cracks plus I buy the supplies. I knew that was high but I am an awful negotiator. So I agreed and hoped he would do a really good job. Well he did a mediocre job and was “finished” in 1.5 hrs. I was taken advantage of but I tell myself it was a learning curve to control the anger inside of me. I had “that feeling” in my stomach when he set the price and I ignored it. Not next time. I say “finished” because the sheetrock mud needs a day to dry but he has jobs lined up and couldn’t sand the repairs down after it dried- so he provided me with sandpaper that I bought- and told me how to sand the walls when it’s dry. (I was even mad he used sheetrock material- these are plaster walls- I don’t want sheetrock on my original walls!)
Anyways- I spent like 10 min sanding and stopped. It’s a lot of work and I paid him to do it! So I never did sand it down. I just painted over it.

And the paint. $250.00 for 7 gallons of paint (primer in the paint) and some brushes. EXPENSIVE! I nearly fell over when the cashier rang me up. The sad part is that the Primer in the paint works so well I have 2 gallons left over. I cant do anything with them.

Sucks.

So that’s $250.00 right there.
I decided not to replace the carpets. They are in much better shape than I thought. The old tenants didn’t own a vacuum (lived here 2 years!) so after I vacuumed they look REALLY GOOD. Plus the new tenants have dogs so it’s better this way.

And there has been a leak in the bathroom. Water got in through some molding and ran behind the latex paint and ruined the wall. It’s all soggy to the touch. I’m going to get to that repair next week.
But the apartment looks GOOD! I should have waited for it to be empty before showing it to tenants. I could have gotten an extra $100 a month at least. Next time I’ll remember not to be impatient and panicky. An empty apartment is way bigger, cleaner and nicer than college kids apartment.

And I am still in love with this house. I know I have commented on and off about my conflict in moving to the new house and renting out both halves of this duplex rather than converting it to a SFH. I’m still conflicted. I still love this house. So much. BB comes home for 2 days next week. I am trying to get the place sparkling so maybe he will love it too.