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I am back, been living the life of Job lately

September 28th, 2017 at 09:15 am

Hi all

I have wanted to write and update for a while now.

Anyway I am 9 months off from my 5 year goal and I was on relatively easy street w the goal in mind.. clear sailing and them made an ill advised decision, took my eye WAY off the ball, and suddenly it appears everything that can go wrong in several areas of "the plan" is going wrong

Please constructive feedback only. The situation is painful enough as it is and I see no way out but through.

K.. neutral news first

1. I applied for and was accepted to Moody Bible for a Masters in Ministry Leadership.I start in 2 weeks!! scary, exciting.I am getting more involved w the church and that is neat..I sometimes doubt this is what I want to do but then I get excited. I am trying out various jobs at the church and exploring outside of church to see what I want to do.

2. I decided to REFINANCE the house again. I know I just did and it does not appear to be a year that goes by without some crazy restructuring of the loan. Anyway I got a 15 year no cost loan before, against some people advice including some on this forum (Another Reader for one! Smile ).. and on thinking of it and getting closer to the 5 year goal I am thinking there is NO WAY I am going to feel comfortable paying so much for the mortgage and lowering my income. I have a 3.15/15 year loan now.I am approved for a 3.8725 30 loan with NO COSTS at all... even refunding the appraisal cost. This will lower my payment over $800 which I can put towards investing and savings. The rate goes up but I am no longer think of this as a long term house so would prefer to put the $ towards saving and investing. If anyone has thoughts on this I welcome them before I finalize it.

3. Got renewed at work through December but currently waiting for our big account to sign a big contract so have very little work.. and can only bill 40 hours per week..but maybe have 5 hours worth of actual work to do (I am used to 50+ and want to make more $ now. will explain lower). The longer they wait to sign the more at risk I feel.

4. No change in Dad who has Alzheimers.. just slowing down. sleeps most of the time...I see him every week, we will wake him for lunch, eat and then he goes back to sleep.. talks some, smiles some.. we have 4.5 years worth of funds left where he is at which is a great place. He no longer goes out at all. I am POA over everything

5. been dating and met some great guys just not the one. I have been wondering if now is not 'my time' or if I stop looking he will just appear Smile

6. all real estate taxes paid across all homes. rental homes going well.

k. the bad stuff.

I bought that 2 flat.. on contract, $65k. Comps were $115k for a 2 flat next door with tenants in it. Estimate was $20k to fix up including new windows throughout. My post is getting waaay too long. I will sum it up and share more later. Project went WAY SOUTH. My $20k estimate has turned into $40k and is at serious risk of going to $45k. When water was turned on it was discovered a main drain pipe had cracked prior. The resulting water leak caved in the kitchen ceiling and then ripping out the rest of the ceilings and 'built on the wall cabinets' exposed out of date piping and electrical. The city is now involved w permits. Had to do a full repipe of the whole house and now electric may have to be updated through out ( we were just going to update the kitchen. I see inspector at 3pm today). Even at $45k to fix up we are still at 11% cap rate with expected rents but project is WAY MORE than I expected. though I make much less right I am grateful for the time the reduced hours and no work gives me as I have had to meet inspectors, make phone calls, source contractors, vet them etc.

I got a equity line of credit for this (not expecting $45k) but just something to have. It will come in handy.

This puts my goal at risk and to meet my goal I want to have paid off ALL fix up and $25k of the $40k I borrowed from myself to buy this by June 2018. In addition to getting my rental emergency fund back up to $18k. This obviously adversely impacts my savings rate and also puts the completion of the 2 flat in a bad 'rental season' which may impact rents or length of time it takes to rent. Also I want to have the management of all homes crisp and clear.. I am still fine tuning things there but definately going in the right direction with good tenants etc, rents paid etc.

You can see where extra hours would come in handy.

This week and weekend I hope to clarify the last remaining costs.. electric, cabinets and counter top and get an electrical guy and clarify my timeline. My electrical guy who was going to do this walked off TODAY.. this am... at 8am saying he was pulling his name off the permit.

Onward!

Rachael



10 Responses to “I am back, been living the life of Job lately”

  1. laura Says:


    Congrats on MBI! I just finished a stint with NTS. My nephew just started attending there this past January, and after a stint in prison resulting from youthful ignorance, he is flourishing. Good luck! Looking forward to following your success!

  2. Bluebird Says:

    Nice to hear from you! Actually you will achieve your original 5 year goal. Adding new properties makes it a modified goal. I wouldn't be too upset about the 2 flat...I would do deals at an 11 cap all day long if I could find them! I know the additional work and expenses were unexpected, however, you shouldn't have to update or make major repairs to replaced items for quite some time. The numbers support the deal. Over time, it will work itself out.

  3. LuckyRobin Says:

    Did you get an inspection done before you bought the 2 flat? If you did, you may have recourse through a guarantee. That is not the sort of thing a good inspector just misses. It is also something the seller should have disclosed and if they did not, you may have recourse there as well, unless it was an as is sale.

  4. Rachael777 Says:

    It was known upfront that the house was older but there was no way to tell the main drain pipe between the first/second floor was cracked as the water was turned off and the drain pipe was in the wall hidden. It likely cracked because the main drain was clogged and water was in tbe pipe when it was 'winterized' and then over a winter it cracked. Fixing that would have been much less but the city got involved with permits so that forced the whole repipe and a few other things... some maybe to be discovered today. I appreciate your support and 'Bluebird' saying "over time it will work out". I am just wanting to get all all costs nailed down at this time. The uncertainty of 'what next' is difficult.

  5. LivingAlmostLarge Says:

    Good luck with the ministry? Can you do it while working? And amazing job on the 5 year plan. Wow. I don't see anything wrong with the 30 year fixed.

    At least you still have an excellent cap rate of 11% with $45k in repairs. I'm spending that much on my lovely home now more like $60k.

  6. PatientSaver Says:

    I don't know much about renovating old homes, but have you ever thought about writing a blog about your experiences? It would probably be very interesting.

  7. Rachael777 Says:

    Thanks for the idea for the blog. Good idea and yes lots to learn. For the ministry. I am actually thinking of leaving my high dollar high stress job for a job at a church or 'para church' company or just somewhere else (less stress.. more people contact.. more active). I am currently figuring that out. that is why I am trying to get the cash flow under control so the homes pay all expenses Smile

  8. snafu Says:

    My 1st reaction was 'this is pretty straight forward compared to your 1st SA blog year.' I'm sure you'll find a reliable, knowledgeable guy to carry out the repairs. Does your management guy have any suggestions? Vetting renovation workers is really tough.

    The proposed new mortgage is still at a very low rate from a historical perspective and the lower payments lessens stress. Fact is, you can make extra payments directly to principal if that seems practical i the future. You haven't mentioned the current value of house, were you planning on taking out current equity?

  9. rob62521 Says:

    Congrats on being accepted at Moody Bible Institute! Maybe this is God's way of showing you what He wants for you.

  10. Rachael777 Says:

    Everyone. Thanks for being so wonderful and supportive. I have 4 electricians doing estimates and I am clarifying w the inspector guy what exactly needs to be done tomorrow am as well. 2 estimates expected tomorrow. 2 Wednesday. Hoping to restart work by end of this week. Some of these guys are management or inspector referrals.

    My house is worth at least $510k (sales price) so taking 95% of that I have approximately $200k equity. I owe $296k. I do not plan to live here the rest of my life but have no plans to move in the near term either. There is no equity loan on this house and I do not plan on putting one on it. House is in good shape and in a very good area of town here. It is a ranch with larger lot.

    thanks all for commenting and the support. Onward. I will post this week with updates.. hopefully good ones. Smile

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