Browse Category by Fixer Upper

Financial independence – FI

You know it’s time to move when you look through pictures of your home after you remodeled it and realize you’ve changed out most pieces of furniture.

My brother Phillip was in town visiting for the holidays recently and as usual we got into talks of our hopes and dreams. He showed us this amazing video of a man named Slomo in San Diego who rollerblades all day and night and is living his best, and happiest life.

The conversation then shifted to financial independence. Phillip asked if we had heard of the FI movement, and the answer was yes. Back when we lived in Colorado I remember reading Mr. Money Mustache’s blog a few times, as he was located just 15 min from where we lived, and I’ve always been fascinated by personal finance. I had also just read this NY Times article on the FIRE movement (Financial Independence, Retire Early). During this conversation Zach and I became acutely aware that we have gotten too comfortable.

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Business planning, Buying houses, Debt Free Living, Fixer Upper, Investments, Move forward, Planning, Small living, Smart money, Uncategorized

We bought a duplex.

Back in 2016 we bought a duplex in Vancouver, WA. We went in on the purchase of this investment with my parents, and my brother and his wife. We started making a video of the process, but it was difficult to do because this property was already rented out on both sides and we didn’t want to invade anyones privacy.

This home is not the most beautiful, and it needs a lot of updating. We plan to make exterior improvements (I’m thinking some shutters, fresh door color, and removal of the awning would be a great start) as well as many interior improvements (The washing machine and dryer are in the kitchen so those need to be enclosed, replace carpet on lower levels with laminate, and fresh paint -goodbye cream!- would be the first items on our list) when the time comes for our renters to relocate. But we like our current residents, so there is no rush!

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Business planning, Buying houses, Fixer Upper, Investments, Planning

Offer accepted… now what?

The house was listed at 218k, we were able to get it under contract at $203,029 which we felt was super awesome. However, there was no inspection contingency with this property. Meaning that we could do any inspection we wanted but we would not be able to get our earnest money back in the event we decided to back away from the house. (Earnest money is held by the title company and used towards your downpayment-usually 1-2% of the house price- but this can be lost if you walk away from the property.)

The bank sent us a purchase and sale agreement and we had 48 hours to sign it before the house would go back to auction and before we would have to turn in the earnest money. So… we used our time wisely and had the house inspected by my Dad and also made sure the septic tank was running smoothly.

When you buy a house, you want to know everything you possibly can about it before you purchase it. So inspections are critical. 48 hours is not enough time to get everything done, but we wanted to make sure the big stuff was good. And as it turns out, the septic tank was shot. Needing full replacement. After talking with several septic companies we found out that costs were anywhere from 8-15k and that doesn’t include redoing the lawn that was just torn out! You can’t get a full quote until the soil is tested and the system is designed, so this price range is all we had to go off of.

When you don’t have a functioning sewer or septic at a property… you cannot get financing. So, we went back to the bank with an all cash offer of $165,000 and they said no. We decided that this news of the septic put us over our comfort level with this house and we decided to back out. Luckily we did this all within the 48 hours and are now free and clear of this money pit! We are bummed because we are anxious to get a property and get it rented out, but we are also going to make sure that we make sound investments.

And icing on the cake is that the bank re-listed the house at 218k and didn’t disclose that the septic is not functioning. I feel like posting a sign at the property for the next interested buyers.

And now, the search continues!

 

 

Be decisive, Buying houses, Fixer Upper, Investments

On the hunt for our first investment property.

We finally went out to look for our first investment property. We had all 4 kids with us, and Jane and Michael were taking turns being in charge of  holding the new microphone. Sound quality is off, but we will work on that for next time! Watch and see what changes we would make to this house and why we think it would make a good investment. Leave a comment with any questions and we will do our best to answer!

This house:

3 bed/2 bath 1,356sf single family home listed at 239k.

After pulling comps (comparable home sales within the last 6 months) we felt like this home was overpriced. A goal offer price would be 210k leaving our payments around $1200 a month (with a 20% down payment). Based on what’s currently on the market for rent, we feel we could rent it for approx. $1550 once all the updates were made. Which would leave us at a cash flow of $350 a month.

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Buying houses, Fixer Upper, Investments

How to do a real life fixer upper.

After watching season after season, and loving, HGTV’s Fixer Upper I couldn’t help but be critical of the fact that the buyers budgets were just not realistic for the average American. Of course, it’s a show, and I shouldn’t expect full transparency. But after having multiple buyers ask me if they can just “take out an extra loan for repairs on a fixer” I thought it would be good to set the record straight. In this video I go over the most commonly used methods of financing the repairs on a house as well as share a realistic approach that anyone can do, even you!

Please leave a comment if you have any questions or would like more clarity on any of the information. Thanks!

Buying houses, First time homebuyer, Fixer Upper, Investments, Smart money