DreamStone Update


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!



21 thoughts on “DreamStone Update

  1. How are you doing all this and living with food and a roof over your heads? And with no jobs how do you get approved for things, please do share. I really am sorry you are meeting with so many difficulties. Take luck

    1. Im interested in that too. To get approval for a 2nd mortgage is super hard. I have a job, so does my husband and I was told a 2nd mortgage for an investment property requires 20% down and is not that easy to get.

      1. Hi Leila — see my response to Alison above! We aren’t looking for a second mortgage, we’ve been approved for the one commercial loan and have no plans to add another anytime soon.

      2. An investment on 2nd properties usually does require a hefty down payment which can be a deal breaker for a new investor who’s usually cash poor. BUT it’s not the only way to get proinvestment perty if you’re willing to work hard.

        We have properties we both bought and sold with little to no money down because (1) we took over the existing mortgage from someone who no longer wanted to deal with it. And vice-versa (2) we mortgaged properties we no longer wanted to deal with to someone with little to no money down (these properties fit their investment strategies and are now cash flowing for them….and us because they pay us) (The investors who bought from us found us via yard signs and craigslist…it’s been a win-win for both of us)

        You might want to look at what your local REIA (real estate investment assoiciation) can offer. Don’t spend a dime on the investment strategies their speakers offer no matter how convincing they sound….just listen and learn. And start talking to other investors…..they are your gold mine of information.

        Btw….many REIAs are operated as a cash making operation but not all.
        Our local REIA is nonprofit and works hard to help wanna be investors not get burned. That’s the best but even if your local REIA is a for-profit it will still give you contacts with other investors who are really your lifeline to learning how to invest. You can find your local REIAs by googling…..they usually come up right away.

        1. Agreed, we’ve been going to REIA’s since the day after we landed in FL! We participate regularly and actually help organize some of them, and have made a ton of great connections here. Being a member of the Bigger Pockets community for the past year has been huge as well — you should check it out if you haven’t!

          Oh, and creative financing is the best. We’re currently working on a creative deal with a new property 🙂

    2. Hi Alison, I never stopped running my business 🙂 We only have one approved loan for the Bungalow (the Heights House was a cash purchase) and the Bungalow is a commercial loan which adheres to different lending requirements than residential. It’s a cash flowing property and we qualify so there’s no reason we shouldn’t be approved. We’re still juggling a lot right now so I’ll be able to explain more once things pan out!

      1. Jenna, Thanks so much. I would love to learn more about it. I wish you luck on all of it for sure.

  2. That bungalow has had too many setbacks to not make you feel like the universe is telling you something. I’d get out of the deal (hard to call it that if it’s going nowhere) if you could.

    1. We did consider that at one point, but it’s really no fault of the property itself! It’s still a cash flowing deal and one we want in our portfolio. Investing requires a ton of patience and persistence 🙂

      1. I really understand what Michelle said and yet I have to reject it too. So many times I tell myself, well the universe is talking, just listen. But really so much of that is random noise. Paperwork, other people’s issues, delays (which we aren’t good at accepting) if I can just stay on the path I might get there eventually. I will say, this presents an opportunity to back down on your original offered price. The seller is probably softened up a bit after all that.

        1. Agreed! It’s easy to let your emotions take over but you have to step back and look at everything objectively. Deals are all about the numbers. And they’re scarce right now so we don’t have the luxury to pick and choose. If it gets delayed again, we’ll certainly consider a renegotiation as our earnest money will have been tied up for nearly half a year.

  3. Wow! You guys must have nerves of steel! I would have been drooling on myself….

    I hope things smooth out and you can move forward, you’ll be hell on wheels!!

    Keeping my fingers crossed and sending up prayers and positive thoughts.

  4. Amazing! This is the best marriage prep course you guys could do! Learning how to best work as a team, encouraging each other, constantly evaluating and reaffirming your priorities and goals,practicing patience and effective communication… you two, together as one, will be unstoppable!

  5. You guys are so cute! I love your design aesthetic, and know that your plans will be amazing. I can’t wait to see how you merge Tudor and French Country. Wishing the best for you guys!

  6. Hi there, while waiting for demolition, could you mow the lawn please.
    Thank you,
    Your future neighbors

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