I feel like it has been way too long since we’ve had a good heart to heart.
Two weeks ago, we gave a vlog update if you missed it:
But in our unpredictable world, a lot changes in two weeks!
We’ve been living here for five months, and life sure doesn’t look the way we thought it would by now. There have been many difficult moments. A lot of sleepless nights. But we’ve been learning to take it all in stride and roll with the punches, focusing on our goals and pushing forward.
Let’s get right to the latest news…
The Heights House:
Nearly three months ago it caught on fire, and it has been sitting vacant ever since. We spent the first month or so working with insurance, which (surprise!) was an easier process than we expected. We came to a fair agreement and they’ve already given us a portion of the settlement. We’re waiting on the rest (they definitely take their time) but it seems like the rest should go smoothly (famous last words, right?).
After insurance was worked out, we had a big decision to make: repair or build new? We ran through each scenario and crunched the numbers, and ultimately decided that it makes more sense to demolish the existing home and build new.
I can’t explain the level of excitement around this new house—I never thought I’d be sitting down with an architect, designing my own home—I’ve dreamed about this for years and it’s actually coming true. Well, sort of. Insurance won’t cover a brand new house, of course, so we’ve had to curb our expectations and make some sacrifices. We’re pinching pennies and saving every dollar to make this happen (all while saving for our wedding in September!)
Beyond just wanting to build our dream home, it’s a strategic investment because the neighborhood will more than support the new value (this is why it’s a good idea to buy the worst house in the best neighborhood). We should end up getting a 200-250% return on our money after it’s all said and done. I’ll talk more details about how this all works in a future post.
Our drawings are supposed to be finalized with the architect in the next week, and I can’t WAIT to show you as soon as we get them back. For now, visualize with me for a moment—it all started with this charming Tudor inspiration:
Which we ended up merging with this classic French country style:
You guys, it’s going to be amazing. Stay tuned.
The 5 Unit Bungalow:
Talk about testing our patience… we found this house back in December, before we moved to Florida. Right after landing, we put in an offer and went under contract. It has now been five months, and we just found out last week that the contract has been pushed back another 30 days!
This deal has been a headache from the start. It took weeks for the listing agent to even show us the units after we already had a signed contract, which pushed back the original 45 day escrow. We had a bank lined up and were assured that everything would be approved and cleared in time. Several more weeks went by as the seller found more reasons to delay the closing, and in April we were finally ready to close! The week before we planned to sign the papers, we received an email from the bank stating our loan was denied. Panicked and confused, we spent the next week trying to figure out a solution and even lining up a hard money lender as a last resort. Long story short, we will never trust or work with a large national bank on investment deals again.
Just when we thought the deal was going to fall apart and we had wasted months and thousands of dollars, the title company informed us that they couldn’t clear the title because there was a lien against the seller (on another property he owned). They asked for another 30 day extension, which we gladly accepted, because it meant we had time to find another bank!
This time we looked for the smallest local bank we could find, and found one with just one branch. A couple days later we sat down with the president, showed him the numbers and told him our story, and two days later we were approved—just like that. It was our proudest moment yet.
With three weeks left until closing, we made all the preparations to begin our new role of becoming landlords, and couldn’t wait to finally get started.
But of course, another setback. A couple weeks ago we found out that the lien still hasn’t been taken care of, and they needed to extend the contract another 30 days. Apparently there are several parties involved (including the court system and the city office) and they aren’t sure how long it’s going to take.
So here we are, five months later, still patiently waiting. Our original plan was to renovate some of the units right away but that is no longer in the cards—at least not for this year, as we need to save our money for the new build. We’re just hoping we’ll actually close on this place in 2018.
So that’s what we’ve been dealing with lately. On one hand it’s incredibly exciting and liberating knowing that we’re in control and building this business while designing the life we want to live. But it’s also scary because our future is riding on every decision, and the responsibility falls entirely on us. If we fail, there’s no hiding and there’s no backup plan. We must pick up the pieces and move forward—and that’s what we’ve been trying to do over these past couple months.
We took a leap of faith by moving across the country, and there hasn’t been a day that’s gone by without uncertainty. Real estate investing is not for the fainthearted, and you can’t be afraid to take risks—especially to be successful in today’s ultra competitive market. Fortunately, Lucas and I love a good challenge and don’t like to play it safe. Screw comfort zones.
We’ve learned how quickly things can change in an instant. One moment you’re drifting off to sleep, and the next you’re standing in front of your house engulfed in flames. One week you are preparing to close on your first investment property, the next you’re denied by the bank with no backup plan. One month you spend rethinking your entire investment and life strategy, and suddenly a house comes on the market that changes everything.
^Yep, another major turn of events yesterday. We found an opportunity that may be a game changer, and would completely turn this next year around for us. You may have caught some of it on my instagram stories, but we’re less than 24 hours into it now and things are happening rapidly. I’ll be sure to keep you in the loop—follow me on Insta for the latest updates!
This rollercoaster of ups and downs is just getting started, and we have no plans to get off. We appreciate your patience through the bumpy start, and we’re incredibly thankful to have you on this ride with us!