One Room Challenge: Week 2

Who is ready for another week of the One Room Challenge?!

In case you missed the first week, you can get the scoop here.

I’d love to show you a bedroom that is 1/6th of the way to a big, beautiful reveal… but instead it’s a mess of paint products, tools and tarps—and we’ve been sleeping on a mattress on the living room floor with our confused cat for 4 nights. Speaking of, did you catch our Spring Home Tour on Instagram?

While on the surface we’ve taken a few steps backward, we’ve made progress in our new furniture flipping venture! Watch it all go down, including our furniture refinishing process and the Before + Afters in this weeks vlog:

And meet our first project:

A $20 coffee and end table set (found on OfferUp) that had seen better days. The shelf on the coffee table was in need of repair, the wood was stained and the veneer had chipped off in several places. Nothing a little elbow grease couldn’t fix.

We were doing everything by hand at this point (I finally found my Mouse sander in storage a few days later) so it was a long and arduous process. It has been a while since I’ve refinished a piece of furniture, so my skills were a little rusty. Between patching, sanding, painting, sanding, fixing some mistakes, repainting, sanding, waxing and then fixing more mistakes, it took us three solid days to complete this set. Fortunately, there’s no primer needed with this paint, so that saved us a huge step!

Still not the encouraging first experience we were hoping for. By the end of it we were rethinking all of our choices to embark on this new venture, but we had an entire apartment filled with old furniture that had to go.

Once the job was finished, I took the opportunity to clear out a corner of the living room for my first styled shoot in over a year! Oh the joy…

Seeing this happy completed space was an instant mood lifter. It’s amazing how a little effort makes a huge impact on your overall well-being.  This is why I do this. 

The pieces were painted in 3-4 coats of Maison Blanche La Bonne Terre (a soft white-grey putty shade), lightly distressed and sealed with Maison Blanche amber wax—PS, you can finally order Maison Blanche paints online!

I listed the set on Facebook marketplace for $175 and was swarmed with messages—sold at full price within hours! It’s amazing what well staged photos can do for a sale.

When you break it down, Lucas and I probably spent around 15 hours each from start to finish. That profit breaks down to $5.17/hr per person… folks, don’t quit your day job to do this full time 😉

With our hopes slightly deflated after the first experience, we started the weekend with a new attitude and a plan to tackle two more items in our bedroom. This bed was our first purchase after moving to Florida—we found it on Craigslist for $60 and paid another $60 to have it delivered.

I just love the vintage charm and initially I had every intention on keeping it for the long haul, however 1) the new room design calls for something fabric and plush to break up all of the wood pieces, and 2) the frame is too long for our mattress so our pillows constantly fall behind it.

As sad as I am to see this bed go, there’s plenty of other similar beds in the sea (I spot em all the time locally) and we have no room to store an extra bed, so I decided to let this one live its’ best life and get it back out in the world with a brand new look.

This wardrobe I picked up for $45 on OfferUp. I couldn’t resist that beautiful wood detailing.

Don’t be fooled by its looks, though—it’s actually cheap veneer and particleboard that’s falling apart in the back. But the front is irresistible and I wanted to make her shine.

Before getting started, we made a trip to Lowe’s to stock up on a few essentials.

You can never have too many sanding pads or foam paint rollers (foam is required for a smooth finish!) I stocked up on 80, 120 and 220 grit for my Mouse (I’ve had the old version for 5+ years and it still works great!) along with my favorite paint brush in the world—the $5 short handled angle brush (smooth lines every time!)

The spray primer was purchased as a ‘just in case’ for tricky items with lots of small detail that would be tough for a brush to reach, but we haven’t needed it yet. But the most exciting thing in that shopping basket is this dainty wood applique:

When I bought the bed back in January, an applique was the first idea that popped into my mind to give it that extra touch of charm. To apply it, I first sanded the surface of the bed for better adhesion. We then measured our center line, dabbed some E6000 glue to the applique (wood glue works just as well) and hammered in three small finish nails (we don’t have our nail gun here but hand tools work just fine!)

Super easy! And with that, it was time to start painting. The bed was in great shape and didn’t need any patching, and there is no priming or sanding required with Maison Blanche paint (talk about a time saver!) Honestly if I was using latex paint and had to prime and sand all of the furniture—I’d never do it, it’s just not worth the effort!

Lucas and I figured this would take all weekend and be as exhausting as the coffee table set, but this time it was actually enjoyable. Maybe our expectations were curbed? Or perhaps it was the lack of patching all the wood holes & trying to sand them smooth by hand? Either way, we finished painting both pieces entirely on Day 1!

For these makeovers, I decided to keep it simple and go with ivory paint from Maison Blanche. Bright white would be too stark for these vintage beauties, and when in doubt, you can’t go wrong with a neutral hue. Here’s the bed after one coat:

The best way I’ve found to paint furniture is to use the foam roller on the flat surfaces (basically anywhere it will fit) and come in with the brush to reach all the uneven crevices (like the spindles and around the applique).

Meanwhile, the wardrobe got its first coat of the same ivory paint (watch the video for a timelapse of this process!)

The surface of this piece is veneer that had some staining, bubbling and cracking. I spent a few minutes giving it a light sanding in some of the rougher areas to minimize the texture a bit. Very different surface than the bed, but it took the paint just the same.

The goal is to get a nice and even coat, and we let it dry for a couple hours in between. Before adding the next coat, I came in with a 220 grit sanding block and lightly went over the surface to eliminate any imperfections/dirt/fuzzies left behind from the roller. This makes the paint velvety smooth and sets it up nicely for the next round.

Depending on the wood type and how thick your coats are, 3-4 coats are needed for full coverage. Here’s the bed after 3:

We gave the furniture one final pass to make our touchups, and we were done before dusk!

Now onto Phase 2—time to decide how to finish off the look.

The wardrobe was an easy call—with the inherently imperfect surface of the veneer and the antique detailing, it was just begging for a lightly distressed finish. This part is my favorite…

A gentle hand sanding with 120 grit paper does the job. I tried to create an even overall wear throughout the piece so it looked naturally worn over time.

SO PRETTY. I just love it.

The bed on the other hand… I was on the fence. I normally lean towards adding some kind of distressing, because I prefer those “imperfect” pieces—who wants to constantly worry about accidentally scratching their painted furniture? Let’s just embrace it, right?

But in the end, I will be selling this bed and I realize that some people prefer a cleaner look. Plus, they can always go back and add distressing later.

Distressing or not, all furniture needs to be sealed and protected. For indoor furniture like this that won’t be exposed to a ton of surface wear or moisture, wax does the job. I wanted to simply enhance the natural ivory color rather than change it, so I used Maison Blanche‘s Amber wax for both pieces:

Wax will slightly deepen the paint color, so keep that in mind when trying to determine your final output. You can see the difference of the bare paint vs the wax below:

And here it is on the bed—before and after:

I gave the furniture two thick-ish coats (no buffing it out, just letting it dry in between the two coats). It will need to dry and cure for a while before subjecting it to use—I like to wait at least a few days.

I kept the existing wardrobe hardware and gave them a couple coats of champagne gold spray paint from Lowe’s:

And here’s the finished bed (excuse the lighting—it’s difficult to see the true colors with so many different light sources!)

Not bad for a day and a half’s worth of work…

We’re going to hang on to the bed for a few more weeks before selling it, but I don’t think I can part with that wardrobe! No plans to let it go anytime soon 🙂

Honest opinions here—how much do you think the bed is worth? I thought I priced the coffee table set high at $175 but I had people fighting over it within hours, so I guess I need to raise my prices. For the bed I’m now thinking somewhere in the $300-$400 range. Let me know your thoughts below!

Next week I plan to finally tackle those wood night stands. I’ve been dreaming about this makeover for weeks. If you missed any of our furniture refinishing process/details, make sure to watch the video which explains and shows the process a lot more. And I’m always posting live updates on my Instagram stories for every project, so check there frequently! I’m starting to think that the more we do this, the more fun and easier it gets 🙂

Now head off to the other participants to see how their week went!

Apartment 34 | Beginning in the Middle | Coco & Jack | The English Room | The Gold Hive

Gray Malin | Jenna Sue Design | Jojotastic | Kelly Rogers Int. | Linda Holt | Marcus Design

Michelle Gage | Natasha Habermann | The Painted House | Rambling Renovators

Sacramento Street | Shannon Claire | Sketch 42 | Stephanie Kraus | Style Me Pretty Living

Media Partner House Beautiful | TM by ORC


One Room Challenge: Week 1

And so it begins… welcome to Week 1 of the Spring 2018 One Room Challenge!

Last week I made the announcement that I’d be participating again, but I didn’t reveal which room. Any guesses….? Watch this week’s vlog and find out!

Originally, I was looking forward to using the great room at the Heights House…

You can imagine the pressure of scrambling to figure out a Plan B when the house was destroyed just two weeks before the event was scheduled to begin! Do I drop out of the ORC and leave everyone hanging? Can I find a new room and come up with a design plan on such short notice? Well, they don’t call this the One Room Challenge for nothing—bring it on!

I’m excited to announce that the room I’ve officially decided to make over is…

Our bedroom! We’ve been living in a temporary one bedroom apartment since we moved to Florida in January, expecting to move into our house in July when our lease was up. Well, that’s not happening anymore, so we might as well make the space feel cozy while we’re here!

We’ve been so busy focusing on the renovation of our house that we haven’t bothered to make this apartment feel like home at all. We moved in with nothing but an air mattress, and I bought a few pieces of used & inexpensive furniture online, with the hopes to eventually refinish them.

I found the bed on Craigslist (I believe it cost us around $120 delivered?) and haven’t had the time to paint it, but I think it’s better suited for a future guest room.

The night stands were an OfferUp score for $80 and they have so much potential—they’ll be the first item I tackle in here! Above them, flanking the bed I’ll hang two pretty vintage mirrors.

This beauty was just $45, also found on OfferUp—how gorgeous will it look with a few coats of paint?

On this empty wall I plan to put a small desk & chair so we don’t always have to work from our bed:

I also plan to swap out all three boring hollow cores with custom solid wood panels from Metrie:

On the empty wall across from the bed, I’ll hang some large scale art along with a vintage coat rack:

The window will be updated with some new blinds and curtains.

Above the bed the plan (as of now) is to build a small shelf, and the fan will be swapped out with a beautiful beaded chandelier.

I was really hoping to go all out with picture frame moldings, trim and paint on the walls, but my apartment manager vetoed the idea so I can’t do anything permanent. That’s the biggest challenge of all for me—not having complete creative control! This is the first apartment I’ve ever decorated so it will be interesting to see how far I can go without making any permanent changes (I’ll have to remove the chandelier, blinds/curtains, doors & shelf when we move out).

On the flip side, this could be inspiration for my fellow renters out there who are dealing with restrained designing too! I’m determined to make this work, and to make these temporary walls feel like home as we spend the next year rebuilding ours.

Here’s my vision board for this space. I’m dubbing it the “French Bohemian Bedroom”…

(Coming up with descriptive names is my favorite :D)

Here are some of the key elements I’ll be using:

Bed from Overstock

Floral sheets from Spoonflower/Roostery

Bedding from Pom Pom at Home

Rug from eSale Rugs

Doors from Metrie (painted in Farrow & Ball)

Door knobs from Nostalgic Hardware

Chandelier from Bellacor

Art from Minted

Chair from HomePop

Mirrors from Bellacor

Lamps from Lamps Plus

Hanging Map from Bellacor

Blinds from Overstock

Curtains from Overstock

Vases from Lamps Plus

DIY night stand makeover

DIY desk makeover

DIY wardrobe makeover

DIY wall shelf

I’m really looking forward to seeing how it all comes together, and to share my progress with you all each week! It feels amazing to be back in my zone, dreaming up room designs and brushing up my DIY skills.

Did you know you can get in on the action, too? Take this opportunity to finally tackle that space you’ve been putting off, and join us as a guest participant! It’s a great way to stay accountable and we can all cheer each other on!

Make sure you check out the 19 other participants and see what room they’re working on…

Apartment 34 | Beginning in the Middle | Coco & Jack | The English Room | The Gold Hive

Gray Malin | Jenna Sue Design | Jojotastic | Kelly Rogers Int. | Linda Holt | Marcus Design

Michelle Gage | Natasha Habermann | The Painted House | Rambling Renovators

Sacramento Street | Shannon Claire | Sketch 42 | Stephanie Kraus | Style Me Pretty Living

Media Partner House Beautiful | TM by ORC

I’m off to see them now—this is gonna be a great season… I can feel it!

 

 


One Room Challenge: Round 2!

It’s official—I’m coming back for another round of the One Room Challenge!

You may remember my first time at this, back in Spring 2015…

That six week renovation was certainly a challenge in many ways, but after a year out of the interior design game I am SO READY TO BE BACK!

I have been keeping this a secret for a while and had everything in place for a massive renovation of the Heights House, but as you know, that went up in flames 10 days ago along with all of our plans. But when there’s a will, there’s a way—and no fire’s gonna stop me from moving forward. Bring on the challenge!

The fun and games officially kick off next Wednesday, April 4th, and will run for six weeks until the big reveal on May 16th.

This season, I’m joining 19 other talented bloggers—many of which are new faces to me!

Apartment 34 | Beginning in the Middle | Coco & Jack | The English Room | The Gold Hive

Gray Malin | Jenna Sue Design | Jojotastic | Kelly Rogers Int. | Linda Holt | Marcus Design

Michelle Gage | Natasha Habermann | The Painted House | Rambling Renovators

Sacramento Street | Shannon Claire | Sketch 42 | Stephanie Kraus | Style Me Pretty Living

Media Partner House Beautiful | TM by ORC

And you can join along too as a guest participant! It’s a great way to hold yourself accountable to finally tackle a room you’ve been meaning to cross off your list, while having a community of other designers & DIY’ers to cheer you on.

I can’t wait to get this party started after so long, and I hope you’ll check in with me each week to see the progress! Tune in next Wednesday to see which room I’m transforming 🙂

 


Our house caught on fire

As many of you saw the news on social media over the weekend, our Heights House caught on fire Friday night.

We found out by a call from our neighbor at 10:30pm, and raced to the scene to find the road blocked off and lined with fire trucks and police cars. Thankfully, no one was inside and no one was injured, and the fire department was able to contain it before it spread to the neighbors. We feel incredibly lucky because it could have been so much worse.

The investigators were able to confirm that it was an electrical fire, and pinpoint the location it started in the ceiling. Our electrician had installed a new panel and shut the power to the house off the week before, so we’re not sure how this happened. He was scheduled to come Tuesday to replace all of the old wiring, so we were just a few days short of preventing it.

We were able to walk through the house that night and it was difficult to get a good look without any light, but the next morning we came back to assess the damage. It’s worse than we thought.

Fortunately, we are insured under a construction policy, but neither of us have been in this situation before and we’ve been hearing horror stories about insurance companies and their policies.

It looks like the house may be a total loss, so at this point we are just hoping they’ll work with us so we can start over from scratch.

After the initial shock wore off, we’ve managed to stay hopeful and positive that everything will work out for the better. In the grand scheme of things, this is just a bump in the road, and it will surely make us stronger.

The hardest part for me is the dissolution of everything we’ve been working on for months—all of the dreaming and planning that went into this home, our very first home together and that we were supposed to start our family in.

We were finally starting to see our hard work pay off and our vision come together, and now it’s gone. We have to start over, and we don’t know how long that will take or what it will look like.

But I know all too well about the beauty that comes from the ashes, and I feel at peace knowing that our silver lining is on the way. We can’t wait to come back better and stronger than before!

We put out a quick vlog update this morning which includes our feelings about everything, plus video of the fire scene and the aftermath:

I’m not sure what this means for the blog and vlog content, but I’ll keep posting and updating you all as we go. You can find me on instagram and facebook where I’ll be posting frequent updates, and more in depth video and vlog episodes on YouTube. I hope you’ll continue to follow along as we begin to put the pieces back together. Thank you all tremendously for your love and support—we’ve felt it from across the world and are incredibly grateful to have so many people who care! Onward we march…

 


Is this a Good Deal? Vlog Episode 7

Another week of demo means another round of surprises—it’s like Christmas in March! This week we uncovered fun things like broken plumbing, termite-damaged joists and roof leaks. It feels like we’re taking leaps backwards, with the house becoming more dismantled by the day…

At this point it would probably have made more sense to bulldoze the place and build a new house from scratch, but that wasn’t in our budget, so we’ll stick with the plan and keep forging ahead.

A few angles for reference, as it’s easy to become disoriented in a sea of dirt and 2x4s…

Here’s the Before, looking at the old living room and front door:

And today. They spent days trying to remove that tile and layers of laminate and screws below, only to end up ripping out the entire subfloor:

Here’s the original view walking into the house from the front door:

And the After. We’re going for that “rustic look”…

The good news is that most of the plumbing is done (we had to re-route the master bathroom shower lines, add washer/dryer hookups and change the sink location in the kitchen). The electrician has also installed a brand new panel, and today we’re meeting with the HVAC crew so they can begin installing the new system. All of our ducks are in a row, so we just need to avoid any big surprises to stay on track (what a miracle that would be!)

In this week’s vlog you can see more progress on the house, and we also addressed a topic that many of you have been asking about—”How do you know if it’s a good deal?!”

In this episode, Lucas walks you through the steps we take to analyze a deal to see if it’s a good investment or not. We go through this process for every potential purchase, including the two here in Florida (update on the 5-unit Bungalow—still under contract and we’re hopeful that it’ll finally be ours by the end of this month!)

If you can’t watch the video now, I highly suggest you save it to come back to later (for Susie’s adorable cameos, if nothing else!) but I’m also including a written summary here.

 1. How do you find deals?

These each deserve a blog post of their own, but the basic ways are through direct mail marketing (you can buy lists online and target specific niches), driving around to identify distressed houses and reaching out to the owner directly, advertising with road signs, joining local investor groups and partnering with people, working with wholesalers, and of course the most common way—working with a realtor/broker or looking on MLS sites like Zillow and Redfin.

We found the Heights House on Redfin, and our 5-unit bungalow on LoopNet which is similar to the MLS, but for commercial properties. Nowadays, deals are scarce and competition is at an all-time high, but they’re still out there if you look hard enough.

2. What do you look for?

This all depends on your specific strategy, but location should always be a major factor as it will have a huge impact on your results. Make sure you drive through the neighborhood first to get a good feel of the demographic, and the pros & cons of investing there.

Value-add opportunities are crucial. We focus on buying properties that need work, so that we can unlock its potential and therefore increase the value. Properties that have already been remodeled are going to go for top dollar, making it difficult to cash flow or sell for a profit, especially in today’s market.

Key words in the listing are great indicators of a property’s condition—we look for terms like “Needs TLC” or “investor special”—there’s also less competition since your average home buyer wants something move-in ready.

And of course, you’ll need to take the price into consideration. Compare the price per square foot to similar homes in the area, and make sure you aren’t overpaying. Don’t eliminate a property you like simply because they are asking too much—it doesn’t hurt to put an offer in and you never know where it will lead!

3. Decide on your strategy

Most investors either buy & hold to keep as a long term rental, or flip it. We’re focusing on building wealth by buying & holding to keep as rentals, and also plan to utilize short term income (AirBnB) in the near future (more on that in a future post). Eventually we’ll look into flipping too, but that requires a very different evaluation. For this post, we’re focusing on a long term (annual lease) rental strategy.

The two most important words when evaluating a buy & hold deal? Cash Flow. This is your profit each month after all of your expenses have been paid (Rental income – Expenses = Cash Flow). Here in Florida especially, you can’t count on appreciation (remember what happened in 2007?), so the tried & true method to build long term wealth through investing is slowly over time. This is a marathon, not a sprint!

Let’s take a look at a real-life active listing here in Tampa to evaluate.

This one popped up on the market not too long ago, and at a glance, it meets our basic criteria: decent location (it’s in an “up and coming” neighborhood), value add opportunities (Craftsman charm and that garage could be turned into a third bedroom) and price ($125k is affordable!). Now that we’ve determined it’s something we want to take a closer look at, let’s do a thorough evaluation.

4. Crunch the numbers

We use the Property Evaluation calculators over at biggerpockets.com. This website & podcast has taught us a lot of what we know, and I think it’s the single best resource out there for investors. We did pay for a Pro membership, but you can do a few evaluations for free using their calculators without the membership.

First, let’s input our expenses. This is where a lot of investors go wrong. You just have to pay the mortgage, taxes and insurance, a property manager and maybe a few utilities, right? Wrong! Don’t forget maintenance, CapEx, and Vacancy, not to mention potential HOA’s, PMI or Flood Insurance if you live in a coastal area. Let’s break these down as they appear on our calculator:

Electricity: Most tenants pay their own, so we leave that blank (unless it’s for a short term/AirBnB rental)

Water, Sewer & Trash: That’s usually on the landlord. Around here it averages $55-$60/unit total.

PMI: Private Mortgage Insurance is required by your lender if you put down less than 20%.

HOA: If you have a home or especially a condo in an HOA, those expenses can eat up your profit—don’t forget to include them!

Monthly Insurance: This number will vary by the provider you choose, but you can look on the Redfin property calculator which will give you an estimate.

Property Taxes: Redfin or your local county assessor’s website provides this data, but make sure to round up for next year because they almost always increase annually!

Other Monthly Expenses: These can be special things like landscaping, pool maintenance or other utilities you will pay for each month.

Next comes the important variable monthly expenses that people often forget to include!

Vacancy: The property is most likely not going to be rented 365 days/year—don’t forget about tenant turnover (or worse—the dreaded eviction!) ! 3-10% is a typical range and we budget 5% on average, but this will depend on your location and specific market.

Repairs & Maintenance: These are smaller routine expenses like clogged drains, a broken window, etc. that regularly pop up. Make sure you set aside between 5-15% of the monthly rent to cover these costs for when they inevitably arise.

Cap Ex: Your big ticket items like a new roof, HVAC, driveway, etc. These are less frequent but very costly, and can wipe out your entire profit over a decade with one bill if you don’t set aside a reserve each month. As an average we use 5%, but you can decrease that number if it’s a brand new or remodeled home, and increase it if it’s an older home that will likely need larger repairs soon.

Management Fees: This is commonly 8-10% of your monthly rent, and it’s important to make sure the property still cash flows with it even if you plan to self manage. Just because you can be a landlord now, doesn’t mean you won’t end up moving/getting sick/tired of doing it in the future. In fact, that most likely WILL be the case one day, so plan for it now. For this evaluation, we decided to omit this number because we do plan to be full time landlords for our properties—but we wouldn’t buy it unless the numbers worked both ways!

After you have your landlord expenses figured out, you need to determine the biggest portion of your monthly expenses: the mortgage.

For demonstration purposes, I’m using standard bank loan terms of 20% down, 5% interest and a 30 year amortization. Note that if we were actually evaluating this property for ourselves, we’d either have to pay cash or use private investors since we don’t qualify for traditional bank loans (you can learn more about why here).

Another thing to note—it’s quite difficult to get a good deal these days (unless you get lucky) without paying all cash. That was the only way we were able to get the Heights House, and it was a 48 hour bidding war that went way over asking, due to fierce competition. And it’s not just Florida—the market is tough everywhere right now.

Next, we have to think about our rehab budget. This won’t affect your monthly cash flow, but it will impact your overall return and your purchasing power, if you plan to continue investing.

People often ask “How do you calculate your renovation budget?” and my answer is: practice and experience. It takes a long time to feel confident in your numbers, but even then it’s just an estimate because you can’t predict everything. Although I’ve renovated four homes, the Heights House is the first one in a new market so I’m still learning the ropes. At just a few weeks into demo, we’re already quite a bit over our original budget prediction, but with each house we’ll become a little better at hitting that mark.

Of course, if you can get estimates from contractors before you buy, that will help immensely. A lot of experienced investors warn that you should double whatever you think your budget is to be safe, and I can agree with that, especially if you’re a beginner.

For investment properties that you plan to use as long term rentals, you don’t want to overspend. Keep the finishes in line with what renters expect for the neighborhood, and choose durable and long-lasting materials to reduce the inevitable wear & tear. For this evaluation, we’re using a rehab estimate of $50k, which should cover a basic repair including a garage conversion, exterior/landscaping, and account for a few surprises along the way.

Don’t forget that unless you get a construction loan (or private loan), you’ll need to have cash reserves built up to pay for your renovation.

And that is it for our costs and expenses! Now you need to figure out how much you can expect the place to rent for. An easy way to figure this out is to use sites like Zillow, Craigslist, local Facebook groups and Rentometer.com to compare similar properties in your area.

Make sure to factor in things like washer/dryer hookups, parking situation, if it’s a condo/apartment/single family home, proximity to freeways/airports, school districts, etc. Things that seem small can have a big impact on both price and vacancy rate. Be as thorough as possible, and err on the side of caution.

For this property, it seems like $1200 is a reasonable asking price (especially if you added that third bedroom!)

Landlords can also find ways to earn additional income, like charging application fees, a pet deposit or having coin-operated laundry installed in a common area (for multi-unit buildings).

5. So… should you buy it?

Now that we have both our rental income AND expenses, we can figure out the most important number: Cash flow!

According to our calculator… we’re cash flowing $225 per month!

Personally, we aim for at least $200/mo per unit, but this will vary by investor depending on the market, volume, amount of work, risk tolerance, etc. A big factor for us is also the total cash needed and ROI, since we need to recycle our funds to use for future deals.

Now you might be thinking, “Hold on a sec—I’m taking on $125k of debt PLUS spending over $50k in cash, plus months of rehab work AND I have to become a landlord, all to potentially make just $225 a month?

Yep. Welcome to the world of Real Estate investing. This is NOT a get-rich-quick solution. It’s going to take us years, decades actually, to build up a portfolio large enough to reach our financial goals. We’d be making a whole lot more money right now if we’d have just stuck with our day jobs… but it’s not about the money—it’s about the lifestyle. We love what we do and we have our freedom. Of course we still work our butts off every day, night and weekend, but a lot of it doesn’t feel like work at all. And we’re working towards a shared goal that we can only reach on this path of self-employment.

Sorry, got a little off-topic there. I could get into this for hours and hours—it’s truly my passion! Anyway, the moral of this post is to share how we have learned (through months and years of studying and practice) to evaluate potential deals, and I hope I’ve been able to explain it in a way that you can easily digest and reference if you are on your own investing path. If you have any more questions or need clarifications, I’d love to answer (we really just scratched the surface here!) and of course, we plan to do more vlogs on specific topics in the future. Just let me know what you want to hear about!

Also, we thought it’d be fun to do an ‘Ask Us Anything’ Q&A video so you can get to know more about the faces behind the vlog/camera—so leave your anonymous non-real estate related question here—don’t be shy, nothing is off limits! 😉

Thanks for taking the time to read if you’ve made it this far! More updates on the way…

 


Lowe’s Shopping Trip! Vlog Episode 6

Another week of demo on The Heights House is in the books, and boy it feels like this past year went by in the blink of an eye and I’m right back at the Cottage House Flip again! Funny how the sound of saws and the smell of drywall dust never leaves your memory.

The week started off strong with fast progress on deconstructing the house—the kitchen being the biggest transformation:

Ahhh… so nice and open! And we said goodbye to the hallway and half bath—here’s the view from the sunroom/back door:

Now we have room for a huge dining table:

Here’s the view looking towards where the new dining table will be (you can see into the master closet and bathroom) and to the right is where the new third bedroom will be.

There was a step down into this room before, so they had to build up the subfloor to make it level with the rest of the house. Next they’ll add a wall to enclose it.

The view from the back wall of the kitchen, looking towards the dining room and the living room/front door on the left:

This was taken a few days ago from the front entrance, looking into the living room, dining room, and the kitchen on the right:

And a shot looking at the front door, which will be moved a few feet back to where the current screen porch door is, so we can create a small foyer/drop zone area:

The only big surprise is the floor, which has proven to be quite tricky to remove. It was a mix of tile and vinyl, with various underlayment that was haphazardly glued, nailed and screwed into the subfloor with approximately 2,391 stripped screws. Eventually they decided it was easier to just tear the entire subfloor out. Today they began that process, only to find that the joists are rotted (termite damage) in sections of the house.

These boards & subfloor will all need to be replaced, and will set us back thousands in labor and several days (at least) in our timeline. Fortunately, this is a house we are moving into and plan to keep long term, so the setbacks are slightly easier to swallow.

To decompress from the stress and take our minds off all the not-so-great stuff… we decided to have a little fun in this week’s vlog, with our first big shopping trip to Lowe’s! Click to watch:

This week’s episode shows a few clips of the demo progress, and also takes you down the Lowe’s aisles with me as I point out my favorite products and paint colors, and Lucas plays “Name that Object!” (he’s still learning about all this DIY stuff—I think it’s cute). We had fun with this one, and hope you enjoy watching! I’m still trying to convince Lucas to do another round at Target 😉

It has been over a year since I’ve shopped at Lowe’s, so I was pleasantly surprised to find a few new products in stock and some long-time favorites still standing. For those wanting more details, here’s a recap of some of the items I called out in the video:

MDF (Medium Density Fiberboard): This material is super versatile and a great substitute for wood. It’s smooth and takes paint well, lightweight and great for building furniture. I’ve used it many times—remember this DIY paneled wall?

Or this DIY cabinet?

Brought to you by MDF, baby! You can buy it in strips or 4×8′ sheets and cut to size. It’s quite affordable and there’s no need to worry about warped wood or pesky knots like you do with pine!

Honorable mention: these 4×8′ sheets of thin hardboard for only $8 are perfect for covering up textured walls (this is what I did for my paneled wall). They’re super smooth and paintable, and would be great for craft projects, too!

Next up: Lowe’s has officially jumped on the shiplap bandwagon! They come in a variety of sizes, finishes and price points. It’s about time, guys! I think the selection is quite nice:

I’m not currently in the market for a tub, but this beauty sure caught my eye:

When it comes to lighting, it seems that Lowe’s has been stepping up their game. They still carry my all-time favorite bang for your buck indoor/outdoor sconce:

Remember them in my old laundry room?

Good to know they’re still alive and well. I’ve also fallen in love with their reasonably priced crystal chandeliers:

And of course, perhaps my favorite of all—the one I used in the Cottage House Flip! $169, what a bargain.

As for paint colors, I’ve used nothing but Valspar Signature for years. My go to colors are Valspar’s Cracked Pepper (rich black), Bistro White (neutral white) and Woodlawn Colonial Gray (pale gray) [UPDATE! I just found out that Woodlawn Colonial Gray is now called Soulful Gray]. These were the only colors I used for the Cottage House Flip, both interior and exterior:

I loved them so much that I’ll be using them again for The Heights House (if it ain’t broke, don’t fix it—right?) By the way, do yourself a favor and get this brush to paint crisp lines and save yourself hours of taping!

Lowe’s has introduced a few new types of tile since last year—this Epoch ceramic mosaic caught my eye:

I love that you can customize it with grout color—it would look really neat with black or gray (or green, tan or blue…)

And how cute is this hand-painted looking porcelain tile?!

It comes in two different colors, and look at that price! Less than a dollar a piece—Bravo, Lowe’s. Now, please start carrying more patterns and sizes!

Our original plan for the flooring in The Heights House was engineered hardwood throughout. That is, until we walked in and saw this Pergo laminate:

Honestly, it looked so much nicer than any of the real wood samples they had. I love the 7.5″ wide planks and the textured surface. Not to mention, it was half the price of anything comparable in wood! You may recall that I used Pergo laminate in the Cottage House Flip:

Unfortunately, they discontinued that color (Scottsdale Oak) but guess what—they have even more colors now! I was immediately drawn to the Wheaton Oak, but I also ordered a sample of the Brier Creek Oak, so we’ll be deciding between those in next week or so. It’s hard to find photos online, so if anyone has any experience with these, let me know!

In the vlog I showed you the cabinet color & style we chose for the kitchen, but soon I’ll do an entire Kitchen Plan blog post so I’ll be sharing everything then! We’ve made a lot of decisions but still have few more to make, so hopefully in the next month it will all be finalized. I’m probably the most excited about the kitchen in this house—I think you’ll understand why after the Kitchen Plan is revealed 😉

And last but not least—did you catch the whole door debacle I posted about on Instagram? A few days ago I found this antique beauty at a local salvage yard:

It was love at first sight, and I thought it’d be perfect as a laundry room door (it needs to be cut down a few inches to fit) BUT it was listed at $245—more than we were hoping to spend. Feeling internally conflicted, I left the salvage yard and posted it on Instagram to get your feedback.

Within hours I was bombarded with hundreds of messages from you guys insisting I go back and buy the door. It was just the push I needed to make the call, and the next day, the door was all mine!

We even talked them down to $230 delivered! #SoWorthIt. Glad I didn’t pass this one up and live with the regret forever. This is the first official purchase for this house, so I think we’re starting on the right track!

I’d love to think that by this time next week, there will be a lot of new and exciting updates to show you, but now comes the phase of necessary but boring stuff like plumbing, electrical and HVAC. I’ll make sure to update you on our progress, but tell us what else you’d like to see! More shopping? More design/inspiration? More about Real Estate Investing? A video Q&A? We’re all ears over here.

Happy March, people!

 

 

 

 

 

 

 

 

 

 

 

 

 


#DemoDay and Due Diligence: Episode 5

Another week in the books, and time is officially flying here in Florida! Part of me likes that because I’m so anxious for progress and our future plans… and the other half of me is screaming ‘Slow down! I’ll never get to relive these youthful days again!’

The internal struggle is real. But the show of life goes on, and in this week’s episode we get our hands dirty on #demoday and talk about where we’re at with the Bungalow!

Some exciting news to come out of this episode—we were interviewed for our first podcast! The hosts invited us on as guests after we met them at an investor meetup last month, and no one was more surprised than us! We’re still so new at this, so we’re thinking this will be our “Before” interview, and we’ll return a few years down the road after we’re ‘seasoned investors’. It was a fun interview—we talked about how we met, what our strategy is and our plans for the future, and a lot more. You can listen to it here!

In other house-related news—finding a qualified and reliable contractor has been a struggle for us here in Florida, and certainly the cause of some stress over the past couple weeks. I know firsthand how critical a good GC is to these renovations (especially on a timeline and budget) and we were worried we’d never find one. At one point we thought that our only option was to be our own GC and hire individual subcontractors for the work, but last week we ended up finding someone who we feel good about. It’s a trial and error process, especially when you’re new to an area. Now we have a team in place and a schedule we feel good about, so we’re hoping all goes smoothly!

On another note, we’ve been playing around with the kitchen layout and came up with another option. In the Before Tour last week, I showed you our original idea:

Please ignore all of the finishes—the Homestyler software is very limited so this floor plan is purely for spatial planning!

Anyway, I didn’t love the idea of being able to see the fridge from across the house when you walk in the front door (even if it blended in with the cabinets), but the options were pretty limited with this layout.

Until… I decided to think outside of the box (literally) and move part of the laundry room wall to accommodate the fridge…

This plan leaves the perfect amount of space for a washer & dryer, and now you can only see the fridge if you’re in front of it. Plus you get that triangle workspace flow.

We’re pretty sure we like this idea better, especially if we can’t afford a $10k fridge with integrated panel doors (we can’t). I don’t like stainless steel, but it’s much easier to live with if it’s not constantly in my face.

Oh yeah, and we’ve been having fun dreaming up ideas for the back oven wall (despite the mismatched mess you see above, we think the end result will be pretty spectacular). The jury is still out on whether or not a small island will fit/make sense in this space. Now we just have to figure out what to do with this big open empty wall!

More cabinets & windows? Open shelving? A sconce? Nothing at all? We need to decide pretty quickly since cabinet production takes so long and it will hold up other things. We’re hoping to meet with Lowe’s this weekend to get an idea of what our options are. If anyone has any awesome ideas, shoot them my way!

As for the Bungalow, we’re still under contract (I told you this was going to take a while!) and currently in our Due Diligence period. This is the time where you get your inspections done, estimates for repairs, etc, after you go under contract. It was easy with the Heights House—we bought the house as-is and there were no major surprises with the inspection.

Commercial deals, however, are quite a bit different. Before submitting our offer, we had pretty limited information about the property (an estimate of annual cash flow and expenses), but during due diligence, the seller is required to give us all of the actual records—rent roll, copies of the leases, all expenses and costs and anything else on file. We were also able to walk through each of the 5 units with our contractor, and got a thorough inspection.

We knew the electric on this 1925 build property was in bad shape, but yesterday the quote came in at $55,000 to rewire it! That is just insane. So, now we have to go back to the seller to ask for concessions and do some renegotiating. We still very much want this deal because the numbers work, so we’ll see what the seller agrees to do. Keep your fingers crossed for us! If all goes as planned, the Bungalow will be ours by the end of March.

That’s all the news for this week! As always, I’ll be sharing daily updates over on my Instagram stories if you want to stay on top of The Heights House progress. You can also find me on Facebook, occasionally Snapchat, and of course there’s a whole lot more on my YouTube channel.

It’s nearly 90° here in Florida—sending some of our hot February air your way!

 

 


The Heights House Before Tour

What’s the next best thing to an After Tour? A Before Tour, of course! Well, at least it is when you can visualize the end result!

I’ve done a few of these Before & After’s over the years, and this house is certainly expected to be in the running for the “most improved” award. In today’s vlog episode, we’re taking you on a walk-through of the house, showing you how it currently looks along with an explanation of the upgrades, with a 3D design of the completed home! Watch now:

The video tour is definitely the best way to visualize the space, but I’m also sharing the photos & overall plans here in this post. Let’s start with the current floorplan:

We did our best to measure here and the numbers aren’t exact, but they’re pretty close. The house is just over 1400 square feet, plus an enclosed sunroom/porch in the back. It’s a 3 bedroom, 2.5 bath built in the 1940’s.

The current floor plan is pretty chopped up, with two potential living rooms that are too small to be functional. The kitchen is a decent size, but it’s galley style and at the end of the hallway, closed off from the rest of the house.

Here’s what we came up with:

The biggest change will be to open up the space by removing the small half bathroom in the center of the house, and eliminating the narrow third bedroom just across from that. A third bathroom isn’t necessary in a house this size, and we will enclose one of the second living rooms (in the top left) so it becomes the new third bedroom. The old narrow bedroom and closet will become part of the open living space, and the back of the old bedroom will become a new laundry room. The horizontal wall in the center of the home is load bearing (it was originally the exterior wall) so we’ll build a header to support the part we’re removing, along with decorative vertical columns.

The master bedroom/bathroom and the front bedroom/bathroom will stay pretty much the same.

In the kitchen, we’ll remove the existing pantry closet and laundry room, and extend the new cabinets all the way to that wall.

Hard to follow? Let’s take a look at the photos! Starting with the modest little exterior:

We certainly didn’t buy this home for its looks—the neighborhood is what sold us! It’s on an oversized corner lot in a desirable neighborhood, just off the river, surrounded by much nicer houses. Here’s the view from above the house:

And this backyard is the stuff of dreams…

Bonus: it comes with a detached 2 car garage and a large storage shed!

We aren’t going to focus on the exterior for a while, though. The plan is to have the main living areas completed (living room/dining/kitchen) before we move in, in July.

Back to the front of the house. Currently there’s a small enclosed entryway with a screen door, which I’d like to become the new front door.

The porch will become an interior foyer/entryway area with hooks and a storage bench.

New view from inside the living room! I’m using the free Homestyler app for these. It’s great for spacial planning, but very limited on decor and finishes, so ignore all of that—this is just to get a general idea.

And here’s the view from the front door into the living room (you may want to put on sunglasses):

It’s yellow! The color of sunshine and happiness, right?

Let me tell you, felt great to sledgehammer that thing a few days ago (demo coverage coming soon). The room is not in the best of shape, and we actually plan to rip all of the overly-textured drywall out because it’s easier to replace than mudding and sanding it all down to a flat finish. Cracked popcorn ceilings are going bye-bye too.

The biggest change in here will be the layout—the entire back wall will be gone! 

On the left wall will be an office/study (hopefully with built-ins one day) and just beyond that will be the new living room.

The door on the far right (below) leads to the front bedroom, which will stay the same. The next door on the left leads to a narrow third bedroom, which will be eliminated, with half the space used for the living room, and the other half for a new laundry room. The hallway leads to the kitchen and that wall will be gone, and the space to the left is the half bathroom which will also be gone. The far left door leads to the master bathroom, and that will stay. This house will feel so much larger!

That back wall is load bearing (it’s actually the original exterior wall of the home!) so we’ll add a header to support the section we’re removing (almost 18′), and add decorative vertical columns on either side for architectural interest.

If you walk down the hallway (which is where the new dining room will be) and turn around, you’ll see the half bathroom we’re eliminating:

Across the hall from that is the kitchen.

It’s a decent sized kitchen, but we’ll be eliminating the pantry and laundry room on the back wall to gain a few more feet.

Again, ignore the finishes (this program only has one range hood to choose from!) but this is our general idea for the layout. We want to add a wall of windows above the sink to allow plenty of light.

To the right of the kitchen will be a door to the new pantry (currently the back of the narrow bedroom).

Here’s what that bedroom looks like now:

From where you’re standing in this photo, you’d be right between the new dining/living room. The door on the far right is a walk-in closet which will be removed and become part of the living room, and the door in the middle is to the guest bathroom which will stay put, and be accessed through the new laundry room/pantry area. Here’s another angle:

That creepy pink glowing wall will be the new back wall of the living room, where the TV sits.

Let’s take a look at the guest bathroom situation:

This might actually be the largest bathroom I’ve ever owned!

I haven’t even started to come up with plans for this one—we’re saving this renovation for later. I just know I’m changing the two doors to pocket doors. One leads to the laundry room, the other leads to the front bedroom:

Nothing special here. It’s basically your most average bedroom in the world.

But it’ll make a cozy guest room someday.

Exiting the guest bedroom takes you right back out into the entrance/study area. And on the other side of the study, we have our master bedroom.

It’s long and narrow—not the easiest shape to work with. Definitely can’t fit a King sized bed or a dresser in here (don’t let the wide angle lens fool you).

Once again—the drawing is just for scale & reference. 

On the opposite side of the room are two closets and a bathroom.

The bathtub will have to be moved in by around 12″, because right now it’s cutting into where the new living room will be, but it’s still a nice sized bathroom.

Haven’t even started thinking about the remodel in here yet—that will come in the future.

If we go back out into the living room and turn left, you’ll end up at the door of the new third bedroom.

 

Here’s what the room looks like now:

I’m not sure what they used this space for (maybe a dining room?) but we believe that it’s highest and best use is a third bedroom.

We’ll close up the 4th wall, add a door, and switch the wall on the master bathroom closet so that it’s accessible from this room.

Finally, we have our sunroom.

Haven’t quite figured out what to do here yet, but the options are limitless!

I know that I at least want to replace the back door with a set of glass french doors. Can’t get enough natural light and backyard views!

Standing at the back door looking towards the front of the house, here’s the new view:

I know it may not all make sense right now, but the video tour is a lot more clear since you can physically walk through the space. And don’t worry, I’m going to be posting about this renovation constantly so you’ll probably be sick of it before long 🙂

And there you have it! Aren’t these 3D renderings total game changers? Lucas and I spent hours and days arranging and rearranging, even changing the floor plan a handful of times, thanks to this software. It has certainly helped us to decide the best use of space, and it’s really great for figuring out furniture sizes. I just wish there were more options for colors, styles and products, or the ability to import your own. Then it would be perfect!

The day this is published we’re supposed to be doing another walk-through and inspection of the 5-unit bungalow (can you believe we’ve been under contract for 3 weeks and still haven’t been able to see one of the units?!) so fingers crossed all goes well there.

Things have already started out a little bumpy for us with contractors, budgets and timelines… but the road to success is never smooth, right? At least that’s what we’re telling ourselves 🙂

More coming soon on my YouTube channel, and as always, daily updates on my instagram stories & facebook. Wishing you a happy mid-February,

 

 

 

 


A special announcement

If there’s one thing you can count on from this blog, it’s no shortage of big changes and newsworthy updates! Today’s announcement may sound familiar if you’ve been following the blog for a few years… watch below to find out what it is!

 

For those who can’t watch right now—here’s the short story:

I’ve officially decided to start offering design services again! Lucas and I have been talking a lot about our goals as investors and the life we want to build together, and figuring out what we really love to do—what drives and motivates us.

Over the past several months, it has become clear to me that my passion is interior design. Three years ago I launched my e-design services, but that was right before a chaotic time in my life and I had to put everything on hold a few months later. To be honest, I didn’t think I’d ever design another house again, but life is full of twists and turns—and here I am. And there’s no place I’d rather be—doing what I love, with the person I love, in a city I’m beginning to love. When you’re this passionate about something, you want to share it with the world and channel that energy into helping others.

As of now, the plan is to focus on local clients in the Tampa area, but I’ll also be taking on a select number of e-design clients monthly. If you’d like to learn more, check out my new Design Help page and click the fill out a consultation form to get started! To all my Tampa friends, I’d love to work with you, and please spread the word to others in the area!

In today’s vlog I gave a quick update on our two properties along with a preview of our single family home, and next week you’ll get the full walk through tour before demo begins! We’re still making slow progress on the 5-unit bungalow, but things are moving in the right direction.

There’s new updates constantly over here, so the best way to keep up is to follow me on instagram and facebook. And as always, you’ll get the full show on my YouTube channel, so make sure to subscribe so each episode reaches your inbox!

Next up: A Before Tour, our plans for the house, and demo day! And so it begins again…


All About Financing!

We’ve officially been here in Florida for three weeks now, and somehow it feels like months—I guess that’s what happens when you stay as busy as we have!

Last week we shared that we went under contract on a single family home here in Tampa, and by the next day we were under contract for another property—a 5-unit apartment bungalow!

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It’s adorable, right? We found this place months ago and have been talking to the agent and lining up financing so that we could jump on it as soon as we landed in Florida. The seller hasn’t been the easiest to work with, which is why it has taken so long and we don’t expect this deal to be over for another two months—if it even makes it that far. There are a lot of obstacles with this one, and we’ll share more about that in an upcoming episode.

The real game changer here is the single family home, which popped up on Zillow one night last week, and within 18 hours we were under contract after a bidding war!

House

It may not look like much, but this modest little home sits just off the river in one of the best neighborhoods in the city—one that we think is going to take off in the next several years—and we wanted to get in while we had a chance. This place needs a complete remodel down to the studs, but I’m preparing for a full-scale Jenna Sue Design renovation, and don’t mind spending the extra cash because we can picture ourselves settling down and starting a family here after we get married in September.

In this week’s vlog episode, we’re talking all about financing—how investors are able to buy properties, why bank loans are a little tricky for us, and how we’re making it work anyway:

Financing

I’ll break it down for you here on the blog too.

There’s a handful of ways that you can get started buying real estate:

1. Through a bank

This is the most obvious method of course, and for good reason. Bank loans are the cheapest money you can get, with current mortgage rates in the 4% range (this is historically low, people, and it’s about to go up!) But not everyone will qualify. You must be able to prove an income that falls into standard debt/income ratio guidelines (some banks are stricter than others) and there is a limit to how many mortgages you can have in your name (usually up to 10, sometimes less). If you have a decent job without a ton of debt and you want to buy real estate—you’ve hit the jackpot! This journey would be infinitely easier for us if we fit into that mold, but unfortunately, we don’t.

This formula doesn’t always work with say, folks who are retired, or self-employed and take a lot of tax write-offs. It certainly doesn’t work for Lucas, who quit his job last year, nor I (self-employed). We simply don’t qualify for a traditional residential loan.

Notice I said residential—fortunately, commercial loans are treated a bit differently. A house becomes a commercial property when it has 5 or more units, aka an apartment building. The bungalow barely makes the cut with 5 small units between 2 buildings. After we tirelessly ran the numbers and put together a pro-forma package to present to the bank, we were able to convince them that it was indeed a good investment. With commercial loans, the banks put more emphasis on the property as an investment rather than your personal financial situation or history as an investor—although that does weigh into their decision. Since we’re new investors and new to to the area, it’s a bit of an uphill battle for us to gain their trust, but so far our efforts have paid off! We still don’t have the official approval yet, but we’re expecting everything to go smoothly on that front.

But there are so many banks, where do I start?! Your best bet is the small, local banks and credit unions. Why? You’ll be able to develop a personal relationship with them where you’re more than just a number. Over time, they’ll come to understand your goals and trust you, and therefore be more willing to fund your deals—unlike a highly regulated big bank, where everyone is a number that has to fit into their calculators and guidelines. We’ve already opened up a business account with a local bank here, and hope to start laying the groundwork for a long-standing relationship.

2. Private Investors

Not long ago I read a quote that said “your net worth is in your network” and it really stuck with me. I’m learning this to be true in all aspects of life, and real estate is no exception! It’s all about connections and who you know. So many successful investors have taken their first steps with other individuals who trusted and believed in them.

There’s different ways to structure personal loans, but a promissory note is the simplest way to go about this. My first private investor was with the Cottage House Flip, and it worked out great! She loaned me money which went toward the purchase of the house, and I was able to pay her back with interest once it sold. The great thing about this deal is that you and the investor get to decide the terms and come to a mutually beneficial agreement. It’s a win-win situation, where you gain temporary financing, and the investor gains a safe and high return.

Lucas and I have been open about sharing our real estate journey, and that has led to awareness and trust within our network of friends, family and colleagues. We’re working with a handful of them now, which is how we were able to purchase the single family home. Each investor will get a promissory note outlining the rate and terms, and they’ll be paid back once we refinance the property and pull our equity out. This is a tried & true method that has been used for investors for years, and I’ll go into more detail on this strategy in a future episode/blog post.

3. Partnerships

Similar to a private investor, a partnership is more of a joint venture where equity is involved. This is a great way to get into a deal with no money out of pocket. Often times, one partner will fund the entire deal, and the other will be responsible for doing all of the work (acquisition, rehab, management/sale) and they’ll split the profit share equally (this happens all the time!).

We definitely see ourselves working with partners in the future, as our capital will be tied up for a while with these two properties. There is less reward, but also less risk, and it’s a nice way to make valuable connections and scale up quickly.

4. Hard Money

Hard money has a negative connotation, and it certainly has its pros and cons. Pros: it doesn’t take much to get approved (they can overlook low credit scores and lack of investor experience), and you’ll get the money fast. Cons: Because it’s a riskier loan in their eyes, it’s very expensive—we’re talking at least 15% interest, sometimes with thousands of dollars in fees. I like to think of hard money lenders as a last resort, and it’s nice to know they are there to fall back on. They aren’t inherently bad—as long as you factor in the costs into your calculations and the numbers still work, then you shouldn’t worry about using one!

5. Creative Financing

This is where investing can get a little fun—like solving a puzzle! There’s endless ways to go about structuring a deal to make it work. Seller financing is a long-time favorite of investors (that’s where you work out a deal directly with the seller to pay them monthly installments instead of the bank) and there’s lesser-known ways to invest like using a Solo 401k or Self-directed IRA. We’re still learning the ins and outs of these and haven’t personally experienced them yet, but the more you know, the more opportunities you’ll have!

We plan to employ every strategy we can to make these deals happen, especially given our handicap of not being able to qualify for a traditional residential bank loan. The best way to become great at what you do is to think outside of the box, and come up with creative solutions to make your dream happen. We’re working on that little by little each day, and we’re certainly making plenty of mistakes, but that just shows that we’re trying to figure it out!

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I hope you’ve enjoyed this week’s episode and learned something new! I can dive into any of these topics and go on forever, so leave a comment and let me know what you’d like to chat about next week! We’ll also be doing a video Q&A soon, so I’ll be adding questions to answer later 🙂

Keep your fingers crossed for us with these two properties… there’s still so many unknowns and a lot on the line! I’ll be updating as much as I can over on instagram and facebook, so make sure to check there in the meantime.

See ya next week!

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