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Rental Updates

January 1st, 2012 at 10:40 pm

So..the big news is that it appears we are buying the Chocolate House. We are taking the plunge and BB is going into a real estate career pretty heavily.

The last post stated that we had countered the banks counter offer by increasing our 1st counter offer by $1k.

The bank accepted!

I think we had a good negotiating hand because we made the first offer a few days before Christmas, and we negotiated through until we had an accepted offer about 2 days after christmas.

We didnt plan it that way, but we knew we had a strong hand because people are not looking at properties during the holidays, so it was unlikely there were any other showings around the time we submitted our offer.

On top of that, it rained for 2 days over christmas and we were able to make sure our realtor indicated to the banks realtor that there are water marks on the ceiling from the roof. We already knew the roof needed attention and built that into our offer, but since it was raining during negotiations, we reminded the bank that there are more water marks growing by the day! (There are not really, but the bank doesnt know that.)

So it was lucky timing for us.

We close in a few weeks, whenever the bank is ready, we'll be ready. We offered a 10 day closing, but have heard the bank wont be ready in time. Works for us.

So far we have had the pest guy out there, no termite damage.

A roofer is coming out in the next 2 days to give us an estimate.

The Air/HVAC is being inspected tomorrow.

The home inspection is scheduled for Wednesday.

The electricity and water was just turned on. BB and I did a walk through to see what is needed to get it renter ready.

The place is missing a lot of ligh bulbs, faceplates and some broken windows. One floor washer/dryer needs to be replaced, and a faucet downstairs. And several rooms need to be repainted.

When everything is done, I'll post pictures!

There is a local private college in town that fills most of the city rentals. We are hoping to rent each unit to the students. I doubt many students are looking to rent in February, but I think we'll get it rented to someone pretty quickly.

In other news, the tenants moved out of the upstairs unit of our original duplex (my Heart House). I'm not sure when they moved because when I went by this morning it was vacant. They never called to say they were going.

So BB and I worked for 3 hrs today cleaning the unit. It took longer than expected, and we did an inventory of some biig expenses coming in the next few yrs. But for now, we just needed to get a new stove and kitchen light. We ordered a stove for $360 and it will be in on Saturday. I picked out a pretty brushed nickle light for $130 to replace the pretty gross flourecent light.

I listed the place on craigslist today.

I saw the downstairs tenant (2 single guys) and they have requested pretty girls for the upstairs. I told them they have a 50/50 shot!

I hope the calls come soon!

Real Estate on my Block

December 11th, 2011 at 11:59 pm

Well, a friend of mine put an offer on a foreclosed duplex across the street from me.



The property was rented up until September and then it was vacant. A foreclosure notice went up about 2 weeks ago and I was curious about the asking price.

When a "For Sale" sign went up last week, I called to get the asking price.

$99,000!! I was totally floored. I paid $160k for my place and that was the cheapest purchase on the block in ten years.

I called my husband who was hanging out with our realtor friend. My husband relayed the asking price and the realtor immediately called the agent for the details. There were already 3 offers on the place.

The realtor put in an offer of $135k for a mutual friend of ours who has been looking to get into real estate by getting a duplex.

Over the last few days I had become a little bitter. This place was bigger than mine, a free standing property (mine is a rowhouse), and it has a double balcony! An upstairs and downstairs balcony. It had features I would love to get at a cheaper price!

Today we learned that her offer was accepted. So we all went to see the property. Why they didnt see it before, no idea. But since it is across the street from me- I got to go too.

I walked in, and instantly I had waves of stress and dismay radiate over me from the poor condition of the inside. It reminded me of my huge renovation that was completed in April and I realized...I am in no way ready to go through another renovation! The memories this place brought back were not good.

So I learned that I am not leaving my property for a long time...I cannot put myself through another renovation.

Back to my friend, she was overwhelmed. The place was in need of the same thing mine needed...tear down and start over. Actually it was in worse condition because I was able to continue renting my property out after purchase and had to ask the tenants to leave when I was ready to start construction.

This place...is not able to be immediatly rented. The kitchen was missing several parts of it, the 2 additions built onto the back were falling (I thought my floors were uneven), the porches do not feel secure under your feet. And the roof is leaking.

So the bad news is that my friend is going to pass on the property. It would need too much money to get it rentable, and be a long term constant repair property unless the structure was fixed and everything was replaced.

She is not looking to buy a major multi month long renovation.

The good news is that this is the worst looking property on the block and it is not immediately rentable without a good amount of improvements. So whomever does buy it will have to do some considerable improvements to it, ultimately raising the value of the neighborhood and my property!

I am quietly hoping it gets converted to a SFH like mine was. It would be such a great SFH with so many porches and being such a huge building!

So, changes on the block are coming!

Calculated the Return on Investment for the California Rental Property

November 21st, 2011 at 04:23 pm

I had a really big revelation this weekend regarding the rental property in CA. I wanted to share it, I doubt it’s a new perspective but it was a new to me perspective.

I have been debating about whether to keep or sell a property I inherited in California. There are pros and cons to both decisions, but a decision needs to be made soon because my renter is leaving in January.
I was trying to determine long term gain of the property if I decide to keep it. To look at the future, I looked at the past.

There are some assumptions at play here, but even being very cautious, the numbers kind of blew me away.

My mom bought the place in 1976 and lived there for 2 years before moving in with my dad in another town. She bought the place for $45,000. This property has been in the family for 35 years.

I assume there was a mortgage, so here are the assumptions:

Assuming she put 20% down, she had a mortgage of $36,000.

Assuming she had a 10% mortgage interest rate (I heard that rates were in the double digits in the 80’s. I’m not sure about late 70’s.

Assuming it was a 15 yr mortgage (I have heard the 30 yr mortgage is new?) She paid $78,080 total for her condo. Taxes are fixed at $1200 per year so in 35 yrs she has paid $42000 in taxes. In total, the place has cost her $120,080 plus HOA fees.

She has rented the property for 33 years. Rent goes up so I have no way of knowing what she has charged through the years. Right now the property nets (after HOA fees) $1250 a month. I’ll assume her rental income has averaged a net of $800 a month.

$800/month x 12 months =$9600 year. $9600 x 33 yrs = $316,800.

The property has brought in $316,800 and cost $120,080. Over the years, my family has had a $196,720 income boost from the property. And then on top of that- it has appreciated to a value of about $440,000! So with realtor fees and closing fees and fix up fees, we’ll say the property will net $400,000 after the sale.

So with the property equity and rental income, this little condo has given my family $596,720!!

Is my math right on this? Is my line of reasoning correct?

And I do understand there were vacant months where no money came in, things broke, needed repair. But even rounding down to $500,000. Whoa! That is serious money!

Now I can better understand why long term real estate can be so lucrative for long term investments!

Seeing the long term return on investment numbers are a bit more crazy than just considering how the monthly amount might impact/help your budget.

In this case, it pays to be patient with the real estate market.

The Impulsive Purchase Renovation-Pictures!

November 11th, 2011 at 03:05 pm

ok, I started renovations in September 2010 and moved in April 2011. I owe everyone some pictures! So here they are; my big renovation:

Before:



NOW
The kitchen



Length of the house


The Dining Room




Entryway



Living room



(I have a thing for light fixtures.)
Thats all the pics I have right now. I just wanted to share because I love looking at pictures too!

Real Estate! To Sell or Rent? WWYD?

October 31st, 2011 at 04:37 am

I am back from another long hiatus and I'd like some perspective from the seasoned savers.

A fun fact to keep in mind: I live in Georgia.

In 2007 I inherited a $1300 sq ft condo in Foster City, California. It was my parents place when they first got married and the mortgage was paid off long ago. (I found paperwork showing they bought it for $40k!)

Since the early 1980's, the place has been rented out. I inherited the place and left it alone because the tenant had occupied it for almost 10 yrs and had no plans to leave.

She was paying $1750 a month, and I pay almost $500 month in HOA fees. The taxes are $1000 per year.

Last year the tenant was laid off and the rent was reduced to $1250 month for 6 months while a job was found.

The 6 months turned into 8 months, and now it will be 12 months and we have agreed that the tenant needs to find somewhere else to live in January because they are still unemployed and cannot afford the actual rental charge of $1750.

So in January I have a big decision. Sell or Rent?

During the day I am inclined to rent out the property and tell myself that "real estate is at the bottom and this is the time to stay in the game if I want to get the full value of the property someday."

To rent it out, I figure I'll need some renovations, a trustworthy property manager, and some luck.

My currently unemployed husband (another blog for that story) and his contractor friend are planning to fly out to CA in January, and complete the renovations. They would put in builder grade materials and update the kitchen cabinets, countertops, bathroom tiles, vanity, maybe shower, and carpeting. And paint. We are hoping this can be done for $10,000. in 2 weeks. (Sounds like an HGTV show...)

Then we would use a property manager to rent it out for...$1900 a month? maybe $2000? But I'm sure 10% would go to the property manager, and then $500 in HOA fees, so I would clear about $1300 a month.

My fear with this scenario is that the property manager would be useless or unreliable and essentially steal our money. (I have heard scary stories!)I dont have any contacts out there so I would be hiring based on websites, phone conversations and gut.

And I fear that the place would be a merry go round of tenants who only stay a year and move, stay a year and move. So the $1300 a month would be spotty.

The pro of the idea is that I get to keep a completely paid for asset in one of the highest real estate areas in the country. (Though I'm also afraid an earthquake will take it down. It's insured...but you know how insurance companies are.)

Or I can sell it. This is the plan I formulate late at night (like tonight) when I am unable to sleep because of pending bills.

I am guessing I could net $420,000 for it as it is now. I could pay off some debts I have accrued and still have $366,000 to bank.

But where to bank it? In a bank for 1% interest? I have less faith in the stock market than the real estate market so it's not going there.

If I bank it for 1% interest I am getting about $3,600 a year vs the $15,600 a year that the rent would potentialy bring in.

I could pay off my primary house mortgage with $150,000 of the $366,00 and that would eliminate $1380 a month bill from my life.

Then I would have $216,000 to bank at 1% interest but the only debt I would have is a rental property that pays double its mortgage every month.

So it seems like $150,000 of the $420,000 would eliminate a $1380 bill that I was planned to have for 28 years. So that will actually put $463,680 in my pocket. Plus I would have $216,000 left over from the sale of the property.
...right? Am I thinking this out correctly?

So does it seem like the right choice is to sell it while it is at the bottom of the market and use the money to pay off (affordable) debts? Or to rent it for a nice monthly cash profit and wait for the real estate market to come back?

(I said "affordable debts" because we can make our monthly payments on our current debts.)

I want to do the right thing for long term sucess. Not short term gains. It's just hard for me to see the forest from the trees right now. I need perspective.

I have a lien on my house

August 10th, 2011 at 01:36 pm

I have to confess that the construction on the house also left me with a lien on my house. Thinking about the whole thing gets me angry and stressed. So I have been in denial. But yesterday I received another letter from the company and know it is time to deal with it.

Essentially, when we bought the house, the back wall was sinking and had dragged the floors down with it so the back of the house was slanted. The load bearing walls in the interior had been moved to non-load bearing areas and had warped the floors from the weight of the house sitting on them. This was all covered up with plywood floating on top of the floors so it appeared that everything was level. I am still really mad at whomever decided to fix the problem by floating plywood and then carpeting and not revealing the problem when they sold the place. But it is what it is.

Anyways, my general contractor hired a construction company to straighten out the floors. We went with the mid priced company who is a big name in town. The construction company sent some guys out and after a week we saw less and less of the guys. The job was dragging out. And the job site was vacant most of the time.

After a few weeks the guys said they were done. This was already longer than expected to take to complete the job. My general contractor (GC) went out to the site and pointed out areas that still needed work.
A few weeks later they said they were done again. My GC pointed out more areas that needed work.

Then they said they were done again and my GC went through and took pictures of everything that needed work and sent them to the owner of the company with a furious email blasting the company and threatening to tell everyone in town about the quality of work from this company. My GC got a VM apologizing and the owner went through the next day with the GC and they identified what needed to be fixed.

The workers came out the next day, did some work and said they were done.

My GC came out and they had done nothing to fix the problems under the house.

At that point he told me to forget this company, don’t pay them the remaining $3k and we’ll get someone else to fix it. He called the owner and said that we were not going to pay because the work was not complete and now we don’t even want them to complete it. The owner told the GC to pay what was fair for the work done. The GC said he would think about it. Then the GC had a day laborer who was on the job already fix under the house, and our carpenter kind of jigged the flooring so it was even-er. The plan was to send the difference in money to the construction company, but my GC got so angry every time he thought about it that he said to not pay anything. So we didn’t. But the dining room is still tilted, you can tell because my china cabinet leans. And my back guest bedroom is still slanted; you get a miniature case of vertigo when you walk across the floor. Both problems are so minute that people question me when they see it; “is it me, or is that cabinet case tilted towards the fireplace?”, “Gamecock, is something wrong with this floor, I kind of feel like I’m walking downward.”
I just nod my head and say “I know, it’s tilted.” And laugh it off because we are in a hundred year old house.

Anyways, I stopped communicating with the construction company. My better judgment was to call and explain why I was not paying the last draw, but my husband and GC both told me the owner of the company would construction talk me in circles and end up making me feel like I should pay or end up saying something he’ll use against me in court. So I never called.

I received a letter saying they were going to put a lien on my house. Oddly enough, it was for $4k, not the $3k I owed.
My GC explained I had two options:

I could go to the court and put down the $4k as proof that I have the money and have the money held in escrow type account while this is settled in court.

I could ignore the lien because it does not effect me until I sell my house which we have no intention to do. The lien needs to be renewed every 4 yrs by the construction company just to stay valid and chances are after 4-8 yrs they’ll stop renewing the lien.

We ignored it until construction was over. We were still ignoring it up til yesterday when I got another bill from the company asking me to pay $2200 of the $3k that I owed.

I am tempted to just pay it. But my GC says not to- we can go to court and win this because our floors are not level within ¾ of an inch which the contract states they would be. And our carpenter who jigged the floors and then worked on the rest of the house said he’ll go to court for me and we would win hands down.

But I don’t want to go to court. I don’t want to hire a lawyer. I don’t want to risk losing. I wish BB would handle it for me but he is more inclined to believe the GC and wait it out and not do anything.
I think I am going to call the owner and offer $1500. And ask them to send me a notice that the contract has been paid in full. But I am afraid the owner will argue me in circles or offer to come fix it now or corner me into something I am not prepared to do.

Ugh. I think I will think on it longer and deal with it next week.

The new house is still costing me money...but less money

June 1st, 2011 at 01:54 pm

Hi everyone,
I hope someone is getting some rain somewhere because Savannah is dry dry dry!

Anyways, I am starting to get my interest in savings and blogging again. For a while there I just shut out any thought of money because I was spending so much of it on the new house.

Now I am still spending huge quantities but its no longer at a fast and furious pace.

Our 19 yr old air conditioning went out 2 weeks ago. (The only original features of the house we kept was the roof, the A/C, the floors and the porch. Because they were still in varying degrees of functional)I wanted to squeeze 1 year out of everything so I could save up some money to start replacing those aging items when they started to go. But of course 1 month after I move in we lost the A/C.

I have been sleeping on the couch downstairs to stay cool and got 3 quotes to replace it. The first quote came in at $4200 which blew my mind. The 2nd quote came in at $3200. The 3rd quote came in at $5100. Although the $5100 guy was so high I was considering him because his presentation was so good. He really educated me on what they were going to be doing, the quality of the brands, and the warrenties/guarantees. He was a rep that seemed to come from a very comprehensive, well managed company that focused on customer service and customer comfort. Whereas the other 2 worked for themselves and had a more unreliable, non customer service based approach.

But in the end I couldnt wrap my brain around a price that started with a "5" or even a high "4". I went back to the $3200 guy and asked the brand A/C he was planning to install. He's using a Carrier unit which I understand is a lower end brand but I think it will last over 5 years and thats good enough for me. He'll warranty it for 1 year.

Otherwise the house is turning out nice. BB comes home from FL for 2 days next week. He has never seen the finished house because he had to leave in February before it was completed. He and I are both so excited.

I have not used any of the appliances except the washer/dryer. I kept the protective wrapping on them so he can be the first to use them. I want him to enjoy some of the excitement of a brand new home. And let me say- going to the grocery store and only buying food that can be made in a toaster or microwave is very limiting! But it add to the excitement. It's been months since I have had a plate of noodles. They'll taste great!

And financially we are stopping the cash flood. Our purchases still wipe out our bank account, but I am able to make the purchase when the money is in the account. Before I was writing checks on a several times a week basis that would equal a couple of months worth of paychecks.

Things are getting back in order. I am starting to find a new normal.

BTW: my computer isnt working so I cannot upload pictures yet. I am hoping BB gets it fixed when he comes home next week!

Renovating my Impulsive Purchase

May 4th, 2011 at 07:25 pm

Well it’s been a long time since I posted on here. I checked in once and that was it. I’m not sure if I’ll return to my regular blogging or not. But this is the first week where I have earned more money than I have to pay out.

My husband and I impulsively bought a run down section 8 historic duplex in the center of town about a year and a half ago. The location is so good that I still can’t believe we get to live there. The plan was to put $40k into it and convert it from a duplex to a SFH and move in.

I’m not sure where it all went so wrong (financially).

I guess the trouble started once we owned the house and we were able to start ripping into things. We discovered that the load bearing walls were not on load bearing piers under the house, so the weight was causing the floors to sink in spots and cause a lot of unevenness. And we found out that some very important supporting beams had been cut and shortened to make way for interior walls, but nothing was done to support the beam, or support what was on top of the beam. So the things on top of the beams (like the 2nd story) were kind of staying afloat by their attachments at the exterior walls. The exterior walls couldn’t handle so much weight and our rear exterior wall was sinking from all the weight on it.

So structurally we had problems. Then our carpenters took forever to get nothing done- so we fired them and got new carpenters. Now I’m in a law suit. I actually haven’t even worried about that yet. It’s more of a lien on my house than a law suit.

The plumbers failed their inspection 4 times. FOUR TIMES! That really ate away at our timeline. The plumbers also lost our original negotiated contract and then tried to charge us the original price after the job was done. We also lost our negotiated contract (it was a 7 month long process) and so it was “he said/she said” for a while. We ended up meeting in the middle.

The framers didn’t frame so well and it was not noticed until sheetrock was up. Then the sheetrock had to be torn down and things reframed straighter. I asked the workers to leave it as is until one explained that it would appear to a home inspector that our walls are tilting when we go to sell the house. We just paid a lot of money to fix tilting walls- so down the sheetrock went. That ate up almost 2 weeks and a lot of money in labor.

I paid $400.00 for 2 beautiful stained glass windows and then paid another $500 for them to be framed in and secured to the side of the house. The inspector came in- saw the windows and asked for our paperwork from the historic society that they were approved. Paperwork which everyone told me I didn’t need to get and after I was not allowed to keep the windows without that paperwork, my contractor told me that informing the historic society about the windows would open a can of worms for the rest of the work being done. So out of the wall the windows came. They are now in the attic. We had to piece together boards to use as siding to cover the holes in the exterior wall.

And then everything costs more than anticipated.
Some good things though…

I love my kitchen. Though it was about $5k more than budgeted. Originally we were going to go IKEA for $5k (including appliances) but BB (husband) had an attitude with the sales guy and decided we were not going to spend our money at IKEA. We went to Home Depot and got beautiful Thomasville cabinets for $5700.00 plus $5000 more for appliances. That really ate into the budget.

I love my Heart Pine floors. Our house had a good amount of original Heart Pine flooring in it but I wanted the whole place in the wood floors. We had to throw away a good chunk of the existing floors due to damage- so we purchased a lot of the flooring that we had already thought we had. So purchasing materials that we were already counting on having in the house ate into the budget.

I love my vaulted bedroom ceiling. We were having issues with the electric company. They wouldn’t give us a separate source of power without a firewall between our unit and the next door neighbors. So we had to tear into the 2nd story ceiling (not part of the plan or budget) and once I realized how high the ceilings could go- I wanted them. So my vaulted ceilings were not part of the budget or timeline but they are impressive.

I like my moldings. The molding was a big drain on the money. I asked for dentil molding in one room and my contractor told me it was an expensive upgrade. Then he “surprised me” and ordered it for me. I love it. Glad he did it. He also told me to get rid of the original molding (not 1900s original, 1980’s original) and let him redo it historical looking. It looks good…but I think the 1980’s molding would have looked fine too. The molding ate up about 2 months of labor and a big budget buster- not sure I would have made the same decisions.

So that’s a tiny recap. I’ll have more to come as I get back into blogging.

All in All…$118,000 spent on my $40k project.
I did keep a very detailed account of where every dollar went. Still not sure what caused it to go over so much though. I think it was the timeline. Paying hourly labor of 4-5 men for 7 months instead of 4 months really costs a lot. So glad I dont have to pay them anymore.

Renters got themselves straightened out

August 20th, 2010 at 10:45 pm

Well it's time for a check in and check up. I feel like it is the calm before the storm time.

In The Impulsive Purchase the tenants upstairs moved out a few days ago. They paid me for 1/2 of the month and now its empty. They left it completely bare. I love them. After living there for 14 years I thought they would leave a ton of junk. But they didn't even leave 1/2 used cleaning products.

The tenants downstairs told me they will be out by the 1st. They have not done anything that I can tell. They lived there for 16 yrs so I am hoping they leave it as bare as the upstairs. That would be sweet.

Demo is set to begin on the 1st. I am trying to schedule a walk through with an architect type so we can submit floor plans for permit approval. My contractor has been wishy about if the floor plans are really necessary- he has an excellent eye for layout himself- but he wants me to spend the money for easy permit approval and an easier process of outlining things to plumbers/elecricians and holding them to estimated budgets. So I guess the floor plans will be the first of many big expenses.

For my current home- the tenants upstairs just caught up yesterday. The one guy who never paid me his 1/2 of August had thought the "overage" they had given me the month prior would be used as 1/2 a months rent- and I used the overage as half their deposit (which they had not given me yet). So I applied the overage to August rent and we worked out a payment plan for their deposit. A DUI and Parking Boot prevented them from being able to pay it all at once. So they will pay me in installments over the next 6 months. A bit of a headache to keep track of but its all ok.

In other news I had my 1 yr review at work and got a 3% raise. I was hoping for a title promotion and a big jump in pay but that didn't happen. But the position I was hoping for is still wide open- as of yet I still have no supervisor!

I used the raise and increased my retirement contribution by 2%...the extra 1% will be "fun money"(partying money lol).

And...WE GOT ANOTHER DOG! We rescued another Rottweiler. Her name is Tai. Shes 4 yrs old and very sweet. We were not looking for another dog but my SIL heard of a family divorcing and the wife surrendered their rottweiler to the animal shelter. The shelter is a kill shelter so the dog was given a limited time to be adopted. After 2 days in the shelter the families cousin got the dog out of the shelter but then needed a family to take her. Since we have lost 2 rotties and love them- SIL called us. Lucky for us Tai is working out very well. She gets along with our other 2 dogs well. She's just huge. Our dog food consumption is going up.



Thats about it. Wow- thats a lot.

Renters Update

August 8th, 2010 at 01:05 pm

Things are progressing. Giving the renters 3 month notice to vacate was the right thing to do and has so far worked out well. One renter plans to be out a month and a half earlier than the move out date, and the other renter called to tell me she is waiting to find out if she is chosen for a rental house and will be moving out immediately if they get it.

So the renters are all set. Now I am scrambling to speed up the HELOC process. I dont want the duplex sitting empty for even 2 days, and dont feel comfortable starting construction until the HELOC money is in the bank.

On the day to day financial front- things are going well right now. Everything is staying steady. Once the renters are out and I'm carrying the mortgage and undergoing construction I am not sure how everything will fit together. It'll be some re-allocating and tight but ok after 5-6 months when expenses calm down. It's the frenzy of purchasing that I am worried about. But I take a deep breath and tell myself there is nothing to do about it now.

BB has scheduled his back surgery. He'll come home for 2 weeks and then return to FL for the surgery. I am very excited for the surgery, as is BB. He is in so much pain it effects his life so severely. I cant wait until he is pain free and can return to a normal life. He's had this bad back for so many years, I may not even know him afterward!

The renters upstairs are going...ok. The 6 month guy has paid his half of the rent but the other guy that I thought was more responsible of the two has not paid for August. And in July he asked for his deposit back because he wanted to take me up on my offer to just pay an extra $175 month for the 6 month lease duration and pay it that way, rather than all upfront. I didn't give it back to him. But clearly he's run out of money. I'm not sure how- he's only been in the apartment 1.5 months. I wonder if they didn't get their deposit back from their previous place. But the more responsible guy is also pretty spacey and it's very possible he hasn't realized its August yet. He's not dodging me. Every time I see him I want to ask for the money but keep hoping he'll bring it up. Next time I'm going to just ask for it.

It has crossed my mind that I have two shaky tenants living in the upstairs apartment. Their rent covers my entire mortgage on the house, and I have 2 very stable tenants who pay the mortgage on the 2nd duplex moving out by September 1st. I need to be prepared to carry 2 mortgages at once. I'm not looking forward to that possibility but I am somewhat prepared for it.

Thats about it. I'm headed to FL next week for a long weekend with BB. Just trying to hang low before the construction starts and turns my life into chaos.

Destination wedding and asking renters to leave

July 16th, 2010 at 12:58 pm

Well it’s been a few weeks since I posted but I have been lurking. I am glad Frugal’s puppy is bringing her joy and minimal headaches- and the rest of you are making progress on van loans, mortgage payoffs and other savings goals.

I’m doing fine. I just went to the tropics with BB for a destination wedding. We spent too much money but it couldn’t be helped. The price for food is stunning! $14 for a burrito. $24 for a dinner entrée. OUCH!

But in other news I went ahead and gave my tenants of The Impulsive Purchase 3 months notice to vacate. We will be closing on our HELOC at the end of the month and we are anxious to start renovations. I contacted the section 8 social worker for one of the tenants to notify her of my intent to ask the tenant to leave and the social worker wrote back that the tenants daughter contacted her that very morning saying they want to vacate in 1.2 months because the mother is very ill and the accommodations no longer work for the family. So it works out for both parties- they are welcome to vacate when they want and we can start renovations as soon as they leave.

The upstairs tenants…we’ll see. I chickened out of face to face communication and handed a sealed envelope to the sister who brought it inside for the tenant. I was expecting a pretty immediate phone call but I have heard nothing so far. The family has lived there for 15 years so I am expecting a lot of anger and bitterness. (…maybe my letter was so well written that they are accepting the news willingly? Lol, probably not.)

That’s about it. The savings are on auto-pilot and the accounts are growing. Yippee!

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.

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:

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.

Carpeting prices...ugh

May 27th, 2010 at 12:53 pm

I keep wandering away from this blog…start feeling uncomfortable about my finances (what is going on? How am I doing?)...and then come back and provide a vent that gets my head cleared up again. I guess it’s a new system I have in the works.

I was able to transfer the utilities with no problem. Relief. One thing I learned: the power company has an option called a “Landlord Agreement” where you pay one fee of $30.00 and you can then transfer the power back into your name whenever you want without paying a fee. So I got hit with a $30.00 fee this time but in the future that should be a helpful feature.

The boys are moving out this weekend. I talked with the boys who tentatively said they want to move in…and they DO want to move in. Relief there too. Their lease is up July 1st. They want to move in earlier but now I have a carpet conundrum.

This is about to get boring- you might want to go view another blog.

The carpet in the 2 bedrooms is gross. Definitely needs to be replaced. I have $3-400 put aside for new carpeting. I go to a local flooring store and get the basic renters carpet in a cream color and after they measured yesterday the price is $700.00!! For 40 yards.
$370.00 for carpet
$80.00 new pad
$160 installation
$60.00 remove old carpet
$31.50 tax

I know I can remove the carpet myself…at this price I will do that. And I know that maybe the pad underneath is still usable and I wont have to buy that. But it would still be $561.00 AND I would be doing a lot of heavy labor ripping out carpet!

I went to Home Depot and found the same type of carpet for cheaper. Their pricing is:
$250.00 for carpet
$78.00 padding
$97.00 Installation
$36.00 remove old carpet
$ tax
Total $461.00 plus tax

WAY CHEAPER!! Here’s the kicker…the Home Depot carpet COLOR is that UGLY shade of Brown. Really ugly and wont match any paint. PLUS Home Depot takes up to 3 weeks to install the carpeting. The first place will do it next week.

I am going to TRY to negotiate with the more expensive place today but I am awful at it. I already know I wont get anywhere. So it looks like Home Depot and ugly brown it is.

Update

May 24th, 2010 at 12:48 pm

Things are going well. Busy weekend with lots of fun stuff. The 2 boys (with 2 dogs) who said they think they want the upstairs unit now say they do want the upstairs unit. They cannot move in for a month after the previous boys have moved out (this coming weekend)- but that gives me time to update the apartment.

New question: What do I do about water & electricity? The previous tenants plan to shut it off, and I need it on to paint/replace carpeting and clean. How does that normally work? Will a utility company just transfer the bill into my name on request?

In other news: my job has given me a pretty awesome title-ish promotion. No pay raise associated with it, no title change- but I now get to do PR write ups to submit to various online sources who publish the articles. Our corporate PR person is overwhelmed and since I have a Masters degree in PR they asked me to do the work. I’m thrilled. My first article was published over the weekend! I love my job because it is so liquid. I find myself taking on different roles on a regular basis. It really challenges and teaches me about myself.

Still for rent- maybe

May 18th, 2010 at 03:30 pm

The upstairs unit is still for rent…I think. The very first guy who came to look at the unit liked it but told me he has a pitt bull mix dog. BB wants no dogs because of the heart pine floors (scratching), and the noise of a dog running around overhead would annoy downstairs tenants (currently me).

It seems like a hypocritical thing to say because we have 2-3 dogs at any given time. But it’s different when it’s OUR dog scratching up the floor. The scratches are worth it because we love our dog. We don’t want scratched up floors from some strange dog.
So I told the guy no. Then I show the apartment to 5-6 other groups and no lease is signed. So BB relents and yesterday the guy, his 2 roommates and their 2 dogs (not 1) come over to look at the unit. The dogs are not old as I was told. They are very much hyper and energetic. But friendly, and there was no barking during the time that I saw the dogs.

What can I say- they caught me a little tired and resigned. I said yes to both dogs with a $100.00 non refundable security deposit for each dog.

So the boys looked over the unit. The original guy loves it. His friend who owns the other dog likes it. The 3rd friend is not happy with the neighborhood. That’s been the mantra I have been hearing at each showing- that they are too nervous about the neighborhood. Hello- I live by myself in this neighborhood and I weigh 100lbs! Why are grown men scared? Not to mention that we had students living in the unit for 2 years…they are still alive to graduate school. Isn’t that proof enough? Plus there are 2 dogs living there!

Anyways, the original guy told me that he really likes it and might even just go into the apartment with the other dog owner and leave the 3rd roommate to find another place. The 3rd roommate has options because he does not have a dog…and I think the 3rd roommate makes the most money of the group. So he has options that the other two do not.

So I told the guy that I am not listing the apartment right now- I’m going to hold off until the improvements have been made. This gives him some time to "work on" the 3rd roommate. He was asking questions about the lease and deposits…all questions no one else has ever asked me. So I feel pretty good about him. If I don’t hear from him by tomorrow- I will call him.

If all goes as planned…I will be collecting $10 extra a month than I get now…but the $200 in non refundable dog deposits is an extra $16.00 a month over 12 months- meaning I am really getting an extra $26.00 a month. And that number makes me happy. Smile

So we’ll see how it goes.

For Rent...still

May 15th, 2010 at 01:48 pm

Well it's been some time since I posted. I went to Las Vegas for 3 days. The whole trip including airfare cost $620.00. I was prepared to spend double that- so I am thrilled. 7 women in Las Vegas gets you lots of free passes into good clubs.

I am still trying to rent the upstairs unit. I have 3 showings today. Every day I think is THE DAY where it will rent and I can forget about it. But not yet. I started out on the high end of the rent scale and now I am a little lower than I feel comfortable being. I plan to put $500 into the unit in new carpeting/re plastering/painting walls...and I will only be collecting an extra $10 a month than I am collecting now.

I feel bad for the boys currently living there- 4-5x a week I am going through the unit for a showing. They don't help it much though- they have posters and black out curtains over the huge lead glass windows. They have cables running all over the floors...and the laundry sits in heaps everywhere.

I cant wait for the unit to sit vacant so I can give it a good cleaning. I feel that once the upgrades have been made- the unit will command much higher rent than I am currently listing it for.

So I don't know if I should take it off the market until after the boys move out and the upgrades are in place. So I can list it for a higher rent. Or secure the renters at the lower rent, put in the upgrades and know that I have probably secured long term renters because they will be living in a posh place for a low price.

Ahhh...I'll just show the unit 3 x today and see what happens. Time to stop over analyzing things.

Today I got a Pretty Darn Good letter in the mail

May 1st, 2010 at 11:27 pm

Is it possible that today is one of the better days of MY LIFE!??

It's close. It's up there on very good days.

I open my mailbox and see a letter (bill) from my mortgage company. If it wasn't a bill it was a harassing letter badgering me to get mortgage insurance or accident insurance or to make bi weekly payments (I get something from the company nearly every week).

So today I open it and vaguely comprehend the words "Check included from escrow overage" as I am skimming the paperwork. As I started fumbling through the papers looking for the check I thought, "Great! A check! I could really use that right now- it's probably because I homesteaded the place a few months ago and they finally have it straightened out." I was hoping for something over $10.00. If it was $30-40.00 range I was in for a great weekend.

I finally found the check and its for $768.00!!!!! I almost screamed out loud. I was in total shock. Then I started jumping up and down before carefully reading the paperwork to find out how the heck I was getting a check for such a large sum of money.

I bet you just thought the $768.00 check was the best part of the story- right? No its not. It gets BETTER.

So as I was reading to see if this was a real check and not one of those fake checks that you can cash IF you sign up for some insurance/cash advance/money making scheme...I read "Your previous mortgage payment was $980.00 a month, your new monthly payment is $889.00."

MY MORTGAGE PAYMENT IS BEING LOWERED BY $100 A MONTH!!!

WTH!! OMG!! This is AWESOME!

And that, my friends, is why this is one of the better days of my life.

FYI: What will I do with the $768.00 check you ask? I'm going to put it towards my mortgage principal. Boring but it seems like the right thing to do.

HEL questions

April 12th, 2010 at 02:51 pm

First a bit of good news: on my walk yesterday I found 9 pennies! They were scattered in a trail and I thought I was on candid camera- stooping down to pick up a penny, then spying one a few steps away, stooping down again just to see another a few steps away.

Anyways, on to the tricky business:
BB and I want to borrow $40-50k to renovate the Impulsive Purchase. Our contractor quoted us $40k to complete everything we want…but we are already thinking of some other things as well. So somewhere in that range is what we would like to borrow.

In late July we want to hire an engineer/architect to draw up plans for our remodel.

Construction is not set until the 1st week of September, when BB comes home from the season. He plans to be at the site everyday checking on things, learning, and helping out. As of August 1st- we will have owned the property for 6 months.

I want to get a HEL on the Impulsive Purchase. But we only put down 3.5%. The Impulsive Purchase appraised for $15k over purchase price during the sale process…and BB & I bought it because we believe conservatively it is worth $30k over purchase price as it is now. There is 1 good comp (same bedrooms/slightly better kitchen/worse location) listed at $90k over what we paid on the same street now…but it’s been listed for sale for months and no offers.

So…what is the HEL process? I know we pay for an appraiser to come out. Does the property need to appraise as is for higher than we paid for it and we will be able to borrow 80% of the equity? Or would the appraiser account for the remodeling we have plans drawn up to do?

The other possibility is this (I don’t like this possibility):
We take out a HEL on our existing home. The house that I love and never want to leave. This home had 40% equity when we bought it (because we put 40% down)- but the equity shrunk as the housing market declined…but we still have about $62k in equity in it..I am guessing. So that would be enough for The Impulsive Purchase remodel. But I know that in the event that we cannot pay the HEL off…we are putting my beloved dream home in jeopardy.

So I would much rather borrow against The Impulsive Purchase- if possible. Does anyone think it would be possible? Or would I be wasting money for an appraiser to go out to The Impulsive Purchase? Is there another alternative maybe?

…Interest rates on HEL’s tend to be much lower than mortgage interest rates…right? Does anyone know what range they are in these days?

Gardening 101

April 9th, 2010 at 03:49 pm

Not much happening on the home front. I am still somewhat crazy in my gardening. I didn’t know it- but I love to garden. I know I spent around $3-400 last year on grass seed/plants/annuals/hanging baskets and shrubs. I am determined to spend tops maybe $100 this year.

I look around at my house and I love it. I must admit many of the plants I purchased never made it. My Mandevilla vines were spectacular- but the cold winter killed them, and I was never a fan of where I planted them- so they are gone, and I won’t be replacing them. I guess the winters are too risky in GA for them.

I bought a Lantana bush last year. It was tiny and pretty. Let me tell you they don’t look so pretty in the winter. They lose all their leaves and have dead looking twigs poking out of the ground. And after I bought the Lantana…they came into bloom in GA and they are EVERYWHERE in the wild. They are more like a weed. Why did I buy it? I didn’t know. I won’t be buying anymore Lantanas.

I bought some pretty yellow flowered succulent bushes to line my front walkway. Well- when the yellow flowers fall off you are left with a cactus looking bush- not so pretty. And cactus succulents don’t do so well in rainy Georgia either- they drowned.

And of course I spent a lot of money on annuals. I knew they were going to die but did not care. And they sure were pretty- might spend some money on them this year.

What I bought and lived…well the list is getting longer as I have become a little more educated.
I bought 3 Gardenia shrubs for the front flower bed. It was not until AFTER I bought them that I learned they are VERY difficult to keep alive. Surprisingly they are doing well. I have 1 shrub that has turned quite pale and seems to be on its way out- but I have been a busy mother hen- giving it plant food and lots of water. I am even trying to create acidic water to feed it. I hope it makes it. I don’t know what the problem is- as the other two are great.

I am a Hosta lover. I own 8. They are beautiful and I want to add more. But by September of last year they were quite ratty looking. Something was chewing on them in 1 bed. But the Hostas in the other bed survived the summer with not a single eaten leaf! So I guess the lesson is that all my Hostas need to be in bed #2.

My neighbor and I purchased Jasmine vines to run along the chain link fence dividing our properties. It had previously been overtaken by wild vines and I am still out there weekly trying to get rid of the wild vines and to let the Jasmine grow. Its coming along.

Yesterday I bought 3 pink Gumpo dwarf Azeleas to line my foundation line along one side of my house. 3 is not enough- I need about 4 more. They bloom in June and it will be beautiful! I already have 2 white ones in my front bed so I know their sizing and growth habits. They are warriors. When I bought the house last Feb they were on their last legs. 1 was already dead and had to be tossed. But the other 2 came back beautifully, and now I have a soft spot for them.

And my 2 Camelia bushes. They are my little darlings. I bought them a few weeks ago- so past their flowering season- but I cannot wait for next year. One pink Camellia has thrown up a lot of new growth- I know they are a very slow growing plant but I cannot WAIT for them to be big enough to tower over the Azeleas they are planted next to now.

Anyways, this is not a very great post. Maybe next week I will have some better topics.

Real Estate Saga

April 9th, 2010 at 12:28 am

Yes I changed my blog colors! The garish pink was getting to me. Made my eyes bleed late at night. This is a softer look...more SPRING!

Anyways....I might or might not (yes I do) know someone buying their first home. I am related to them. So I cannot give advice unless asked- and I know I will not be asked.

Here is the story...it blows my mind, and I could be wrong on the facts. This is all second hand info.

Lets name relative "Becca" (because I like that name). Becca cannot afford to live in her HCOL area and has decided to move to FL where real estate is tanking. Becca and her husband have a good income earning a combined about 80k a year...maybe more.

Becca saw a few houses and put in bids on a few foreclosures/short sales but was outbid. She really wants to take advantage of the $8k tax credit expiring at the end of this month, and interest rates as low as they are now. Because she was outbid on everything, Becca switched realtors.

She found someone who promised she can get a shortsale/foreclosure and close in time to get the credit. Realtor sent Becca online listings and Becca choose a house that she liked. Becca said she wanted to try and purchase it. Becca was told by the realtor that the house would ultimately sell for more than it is listed for- Becca needs to go get preapproved for $15k more if she wants to buy it. Becca goes to the bank to get approved for more.

Becca puts in an offer for $20k more than the list price and waits. and waits. The realtor tells Becca and her family confusing stories of an "Agent" who is in charge of the sale, there is no negotiating with the bank, but the agent..later they learn the agent is actually the realtors husband. The realtor spins it to sound like Becca is going to get a better deal and a faster close because the realtor has a "connection"..then finally Becca's offer is accepted.

A closing date is set, and an inspector must be found to look at the house. The realtor says "the homeowner is a contractor- he can probably inspect it for you. Call him." ...Wrong! Conflict of interest. Becca at least realized this and said- "no". That flew up a red flag for me...I was thinking- "WTH? What realtor would suggest that?"

But something still felt weird for Becca. No earnest money was given. A contract was signed..but something was off.

Finally the REAL story came out. The realtor's husband works at a bank. Before Becca put in her offer (while she was getting preapproved for more money)...the realtor's husband BOUGHT THE FORECLOSED HOUSE for cash. He is now selling the house to Becca for $20k more than he purchased it for! He has not even closed on it yet...he closes on the house the day before Becca closes on it.

And still somehow- Becca and her family are OK with this- they still think they are getting a good deal! They say its because the same house down the street is listed for sale for $20k higher than Becca is paying for her house! So they now know there is a middleman and that they are paying $20k more than he did..but since she can close and get the tax credit, and the house is still underpriced (in her head because of the house down the street listed for $20k higher)...she is going through with the deal!

I don't get it. On so many levels. Forget that most people would say "F it- I'm not paying someone $20k just because they owned a house for 1 day."...forgetting that, what about the ethics of this deal? A realtor took Becca's confidential information (how much money she had, what she could afford, what house she wanted to buy) and used it to her own advantage! She used Becca's trust against Becca! Isnt this fraud?! Isn't this enough to get the realtor fired if not arrested? I thought realtors were required to act on their clients behalf, to work in their clients best interest?! And why is Becca not backing out of the deal so quickly she leaves the realtor cold? Why is she still buying the house? I don't get it. The whole family just accepts it and tells themselves she is still getting a good deal.

If it was me- I would be so angry I would try to get the realtor disbarred from selling real estate. And I would realize that this ass man husband is stuck with a house he does not want in a declining market if I back out of the deal. I would go back and say "I will buy this house- but only for (what he paid for it...or less if I was feeling really angry).

Becca's just continuing with the sale. I am incredulous with her lack of personal judgment but actually don't think the deal will go through. I would think her mortgage company would see the title was held for 1 day before being resold and refuse to do business. Or that the house wont appraise. I hope the whole deal falls through. For Becca's sake.

Please- no one better post that this is common. It is so sleazy I want to throw up.

landloring

April 7th, 2010 at 01:31 pm

Ahhh…the first 5 days of the new month have passed. That means…rent collection! And I am thrilled to say all rents have been collected.

This was the first month that the boys upstairs would each be paying an extra $175 a month because their 3rd roommate moved out 2 months ago and used his deposit to pay his next months rent. The boys remembered, and they paid the extra.

This was the first month I would be personally collecting from The Impulsive Purchase. I don’t know the renters styles so I wasn’t sure what to expect.
But the upstairs renter mailed the check as she promised.

The downstairs unit is subsidized by government help…and that check arrived in the mail promptly…but no $194.00 that the tenant was responsible to pay. Yesterday I called her and she was very sweet saying she would give me the money if I came by at 7pm that evening. And she did.

And now all the money has been collected! Whew…that’s a burden off my mind. And let me say it is not a bad life to get all this money coming at you from all directions. I know landlording is not for everyone…but it is definitely for me!

Messy Finances

March 21st, 2010 at 02:44 pm

My finances feel cluttered. I have been feeling this way since we closed on The Impulsive Purchase. I have been able to ignore it till about last night.

Last night I watched Suze Ormon and her show combined with a very expensive St. Patty's celebration week (numerous people came into town- it's the 3rd biggest St. Patty's celebration in the country behind NY & Boston) made me want to get the finances back on track.

I didn't get anywhere other than realizing the next few months will continue to get murky. So bear with me while I try to at least get the facts down:

On April 1st I will owe my first mortgage payment on The Impulsive Purchase. I will also be trying to collect the rent from 3 different sources before the payment is due. That should work out ok. I will still need to cough up $85.00 because the property is not completely cash flowing due to the ridiculous low rents these tenants pay.

We have the upstairs tenants of the 1st property moving out in the end of May. Have not yet decided if I want to pour about $500 into the place to smooth out the plaster walls, paint and replace bedroom carpeting so I can charge more. But then the place wont be rented for about 2 weeks and that is lost rent. I think in the condition it is in now I can raise the rent...$50 a month. With the improvements I might be able to get out another $150 a month. Trying to be conservative in this recession. I prob should do the work- but the upstairs rent pays my whole mortgage and it might be a bit painful to cough up that payment right now- having just bought The Impulsive Purchase.

The California property is going to be $400 short this month. It was $400 short last month. The fridge broke down and the tenant got a new one for $720 plus taxes and haul off fee. She is splitting the bill in half each month so I don't have to deal with the pain of being $800 short in 1 months rent. But no matter how you slice it the shortage is still painful. But the new fridge is a tax write off- next year I will reap the benefits.

I seem to have entered wedding-land. I have 4 out of town weddings this year and 3 are in Mexico! BB will be accompanying me to 3 of the 4 so then the cost doubles. Just weighing on my mind. Especially because I committed and purchased plane tickets for a Vegas trip in May before I knew about 3 of the weddings. So not sure where the money for all this is coming from. Just gotta keep in mind these are short term obstacles. And 5 vacations in 1 year is very excessive but I guess a good problem to have.

So that's whats on my mind. I am going to be entering a few months where I will be borrowing from one account to pay bills for another...I don't like living that way- I like saving money every month- not going into the red- but I think it cant be helped until maybe July or August.

Then once September rolls around we start trying for the HELOC on The Impulsive purchase so we can convert it into a SFH and move into it. OIY. That will be 2 oir 3 months of having The Impulsive Property vacant while work is done but still being responsible for the mortgage and also living in our 1st property so it cannot be rented out to cover the Impulsive Properties mortgage. Messy messy times ahead.

The only positive is that I am back to E-Baying. I made $300 this month and have more items to list. I am going to try and use that money to make up for the shortages.
So the finances are cluttered. Messy. Not even blogging about it has helped.

My lack of Domestication cost me $69.00.

March 19th, 2010 at 12:19 am

So the upstairs tenant complained that his washer stopped working in the middle of a load. I ran up there real quick and confirmed that yes- the washer is broke.

I called Sears and agreed to pay a $69.00 service charge plus whatever it would cost to fix. 5 days after the washer "broke"- the repairman comes out and starts it right up!

Turns out the washer has an automatic shutdown if the motor gets to hot. The tenant admitted it was his second load when the washer died. If we had known to wait a few hrs and try it again- we would have saved $69! Oh well- live and learn.

I am not too upset because I thought it would be a $2-300 visit- but was really just $69. Though I should be annoyed I spent $69 for someone to walk in and press "start".

Small things here and there

March 16th, 2010 at 04:13 pm

Things are going well. Work has been cutting into my days a lot. I have a new office (with a view!) but cannot cruise the internet anymore because of the way my computer monitor is set on the desk to be seen by everyone walking by.

Money has been difficult. When BB got his job it took such a big burden off my shoulders and we suddenly had so much money coming in we didn't quite know what to do with it.

So we bought a second property. We looked at the long term costs and decided we could afford it- but the 2nd property has really put a new burden on us.

Just little things here and there. But the little things remind me how expensive a BIG thing might be one day.

The tenant in the upstairs unit of the 2nd property complained that there are several tiles missing in the shower. After inspecting further the whole wall is rotting and the tiles will continue to fall. I want to do a patch job since we plan to move into it in the Fall and do a lot of demo- but in the meantime it has to be fixed.

The tenant in the downstairs unit is now responsible for paying $200 a month of her $550 a month rent. The apartment is Section 8 housing (subsidized by the government) so she has to go through yearly evaluations to see how much of her rent she can pay and how much the government will pay. The newest evaluation decided she will pay $200 which is a $200 increase from last year. It worries me that this might be the beginning of bounced checks and late payments.

Then the Washing machine on our upstairs tenant in the 1st property broke. Its a 4 year old combo washer/dryer and it smells like the motor burned out on the washer. I think it will be around $260 to have the repairman replace the motor if that is all it needs.

So nothing heavy- no big issues. Just some small stuff cropping up that makes me wish we did not buy that 2nd property. We barely got to enjoy BB's new paycheck before it started getting eaten up by this 2nd property.

But in the long run it will be worth it. I am just looking forward to the renovations to start so that we can start seeing why we got into this property in the first place.

We bought the duplex

January 29th, 2010 at 03:41 pm



We got the place. I cant believe it. We found out late last night.

We submitted our offer (7% off list price)first thing in the morning- and I guess they countered in the afternoon sometime- but our realtor never checked his email until 7pm when the other realtor called him and asked when he was going to respond! They countered back at 5% off list price which we accepted. They must have been nervous when they heard nothing from us all day- but we were nervous because we thought we heard nothing from them all day! Before our realtor told us about the counter offer I checked realtor.com and all the listings for all the units had been pulled from the site. I was sure we had lost the place.

The property is one of 3 attached Federal rowhouses all for sale. All started out listed over a year ago for $150k over the final sale price. This past weekend the reduced price was reduced further causing a flurry of activity. BB and I didnt know all this of course. We knew that when we were house hunting last year this property was way out of our budget- but we didnt know about all the recent price reductions. We just looked online and noticed that it was now listed reasonably- so reasonably it was the cheapest place in the city!

So we requested to see the place and learned there were 3 offers that all came in the day before or that day. Our realtor explained to the selling realtor that he was showing it to an interested couple (us) and our offer was likely to come in. We wrote an offer that night.

The next morning we learned that 2 full priced offers were in on 2 of the properties. Another offer was on the table not full priced and we didnt know what unit it was for. We had already submitted our 7% off list- price offer but our realtor told us to go in full price. We didnt- because we thought we were competitive enough to at least be given a "final and best" chance. I still and likely never will know what the other offer was for but the seller chose to counter with us which we accepted. We saved ourselves enough money to buy all new kitchen and laundry appliances when the time comes-so we were happy with that. The other 2 units were sold for full price to a single buyer who I believe wants to convert 1 unit to a SFH like us- and rent out the other unit.

After over 350 days on the market all 3 units sold the same day! That seller must be doing a happy -happy dance.

So I am in shock. BB is stepping up to the plate- he scheduled a meeting with a bank for a mortgage for this afternoon. He is handling it all himself. Thankfully- because I have still not recovered from the mortgage hell I went through last year.

I am excited because it is 1 block from a favorite bar I like to go to. $1 drink night on Thursdays!

Anyways- it's bittersweet because I am in LOVE with my current home. Far more in love than this new place. But the new place has renters in place so it will be another 6 months or so till we figure out if we want to move into it or not. The only reason we would want to is because of the KILLER location. And it's resale value will hold up whether it is converted into a SFH or not. My current property is worth more as a duplex right now because we are in a low income/high renters neighborhood.

Without further ado:


Pocket doors!


Floor to ceiling windows!


Primo neighborhood


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