The 3.5 Challenge

Last week I was surfing the web in my usual haphazard, nonsensical, non-linear way.  You know, that method where you do an internet search on tire size (because we had our second flat tire in about a month) and less that two minutes later you end up reading about the history of knitting… because a search on tires led to a discussion board about wheels… on sedans versus trucks… busses with permanent wheels… wheels on the bus… children songs.. toys for christmas… Justin likes the Avengers… random article about boys and action figures… dress-up for boys…  super hero costumes… make your own costumes… sewing… knitting… and bam! You've landed on a bizarrely interesting article on the difference between knitting and crocheting.  I'll tell you what… the internet is a dangerous place for those of us who lack focus. Anyhow…  It must have been that type of drunken stagger through the internet that led me to a blog entry about how some couple paid off their mortgage in 3.5 years.

The funny part is, I never even read the entry.  It was probably just one of a dozen windows that I left open as I dashed through websites like a madman and promptly left for work.  But when I got home I was greeted by a wife who, with determination in her eyes, cornered me in the kitchen and said, "I read the article you left up on the screen… and I'm ready! Let's do it!"  Um…. okay… but what article?  She figured that I had left it up for her to read, so we both found it funny that I had no idea what she was talking about.  Evidently, my last click of the mouse led to a blog entry that had convinced her to take up her sword and conquer the financial dragon that is our mortgage.  And so we discussed it, I read the article, and it all left us with the question of, can we do this, too?

Here's the background: We have 3 rental properties with remaining mortgage balances of $158K, $125K, and $82K; and a primary residence with a balance of about $197,000.  That's over a half million dollars of debt owed to 3 of 4 different banks combined.  That's a sad state of affairs, not to mention a state of high financial vulnerability.  Lord knows that we are always one unemployed tenant or one collapsed roof away from what would feel like financial disaster.  Not a fun place to be. So, true to Dave Ramsey form, we decided to focus on the smallest of the four amounts. The $82,000 mortgage started in 2008 as a 30 year $124,000. One year later, we were at least fortunate enough to refinance to a 15 year mortgage.  That dropped the payoff date from 2038 to  2024.  Since then, we've been putting extra money towards it here and there, chipping months off the amortization table whenever we could.  That has us down to an expected pay-off date of September, 2023; essentially 10 years from now.  Which leads us back to the question of, can we do this?

We combed over the finances for about 48 hours… and came up with an answer of no.  But we did try. We drew up plans to cut our YMCA membership, cell phone plan, grocery budgets, etc.  But the truth was that we had been there, done that a number of times already… and are at the point where there honestly doesn't seem to be much left to cut.  With no cable, no home phone, no car payments, and few things left in our lives that anyone in their right mind would call luxury… we seem to be in a good position to maintain our title of Mr. and Mrs. Frugality.  Nonetheless, we massaged the numbers for hours at a time, and it just didn't add up.  Even if we sacrificed big time on our quality of life, the trade off between what we'd gain (maybe a year or two less on the mortgage) and the conveniences that we'd lose just didn't seem to balance out.  Besides (and funny enough) I had just mentally committed to increasing our charitable giving next year. Somethings gotta give. So we closed the book on the conversation, and moved on.  Ten years ain't too shabby, after all.

Except I never really moved on.  This thing ate at me until I finally said, ok… the numbers don't add up… but let's do it anyway! Four years or bust!  Let's get this done!  After all, has God not done crazier things in our lives over the past few years?!  He created the heavens and the Earth and parted the Red Sea… and so I'm willing to think that he could figure out a way to nip a little five figure mortgage in the bud.   Especially with the gainful employment that He has blessed me with.  So let's go for the gold, because even if we fall short, it's still a victory.  I have to believe that the God we serve would still honor our pursuit to be good stewards over the worldly possessions that He has blessed us with.

So consider this entry our public declaration… because it would be easy to not say anything and just try to do it unannounced…  avoiding public scrutiny throughout the process, and saving us the potential embarrassment of not reaching the goal in the end.  But the public nature of an entry brings with it a certain amount of accountability.

So why 4 years?  Why not aim to cut the 10 years in half to five, or better yet why not match the 3.5 that the original blog entry mentioned?!

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I wrote that last question two days ago… and (as much as I tried) I have yet to come up with a good answer.  I'd write… then promptly delete… then write… ponder… and promptly delete.  Because no matter how well written the words, or savvy I tried to be in the statement of my excuses… my conscience kept coming back to the same thing: Hypocrisy. Here I am in one breath saying that God can heroically bridge the gap between our goals and our abilities if that's His will. And in the very next breath, I limit Him because of my own lack of faith.  Man, talk about being smacked in the face.

From our calculations, just cutting our mortgage from 10 to 8 years would require somewhat of a heroic effort and a good amount of sacrifice and cost shaving our our part. But the truth is that we could do that ourselves. For me, setting the goal to five years would have put it in the "wow" category. And I guess sliding to four years put even more space between, "wow… look what we did" and "wow… look what God did to honor our faithfulness!"… And I was content with that until I messed up and asked the question: But why not the 3.5 that we actually read about? Why scale it back at all? What is it that's making me think, yeah, that was good for them but that's just not reasonable?  It's only a difference of six months, but it felt so much bigger than that.  I tell you, I have struggled with this question for two days now; but funny enough the answer was obvious from the minute that I typed the question.  Don't limit me.  That's what I heard.  And man, was it convicting.  Here I am starting a blog entry that I was rather proud of, and it somehow morphed into a public evaluation of my personal faith.  Talk about painting yourself into a corner.  But here I am, with a marquee match up of God versus my personal pragmatism.  And thanks to the blessing (and curse) and free will, who wins is totally up to me.

So it is.  The new goal is three and a half years.  July 1. 2017.  A bit of a ridiculous goal if you ask me.  But then I'm reminded… nobody asked me.

Rental Property Refinance

Who puts a 45 cent stamp on a Mortgage PAY OFF CHECK?! Nothing like paying interest on a $125,000 loan for 6 extra days because your paralegal hasn't figured out the joys of wiring money (or at least overnight mail.... geez) in the year 2012.

And that's just the tip of the iceberg from our most recent not-so-wonderful refinancing experience. One mistake after another. Looking to hire Conner Law firm (115 Cargill Way, Hartsville SC) for a refi? Run like the wind. In the opposite direction. Miserable Experience.

Heroes for Hire

At some point during their 30 years here, the previous owners decided to tack on a second garage to the back of the house. With unfinished walls, a cement floor, about two dozen wall outlets and the curious placement of a water heater, I'm pretty sure that it was used for nothing more than storage and a make-shift workshop. For us, the potential use for this extra 450 square feet has gone from a photo studio, to a home office, to split bedrooms for that sibling group of seven (yes, 7) that we saw on the adoption website one time (call it... temporary insanity), to everything in between. The plan that has probably gained the most traction is to have Justin give up his bedroom for whatever child we adopt or foster (unless they share a room), turn the existing play room into Justin's new bedroom, and convert this unfinished space into the new play area.

In the end, the goal is still unclear (the lack of heating and air is the biggest obstacle to most of our bright ideas)... but for now we're just chugging along with the improvements. Plans or no plans, we're just happy to have good help as we put it all together. There's nothing like unemployed superheroes to get your home project up and running. I guess the economy has been hard on everyone.

Footnote... Over the past couple of weeks, Justin, Jasmine, and Naomi have somehow managed to occupy themselves in this empty room for hours on end without a single toy to play with. The imagination is an amazing thing. The funny part is, I'd bet that if we turned this same space into a play room and moved all of their toys in there... they'd last 20 minutes before whining about being bored and needing sometime else to do. Go figure that one out.

They've also taken to calling this room "the clubhouse"... and I've been instructed that every time someone enters the room, we all have to yell, "Welcome to The Clubhouse!!!!" ... they've either been sneaking in a few episodes of Cheers (Norm!)... or have had their fair share of visits to Moe's Southwestern Grill (Welcome to Moe's!). Knowing my wife, I'd put my money on the latter.

Random Space

3rd room painted: The computer room.

I think that we changed the name of this room every 2 weeks during the first 6 months that we lived here. Living room? Den? Family Room? As silly as it sounds, we simply couldn't agree on what to call it. To poke fun at ourselves at how absurd of a problem this was, at some point we decided to actually give it a name... and so it jokingly became The Benjamin Franklin Room (as in the guy on the $100 bill) since it's the room where I typically go to sit idly and comb over our finances. But good luck getting a 3- and 4-year-old to pay homage to Benjamin Franklin. And so, eventually it simply became the computer room. It is indeed where our only desktop computer is located... (ironically enough, that's the only corner of the room that I forgot to capture in the photos).  And that's pretty much the only thing that matters on this side of the house to our kids. So without further ado, we present to you... the painted computer room.

We're not quite done with this room yet, but I thought that it was deserving of a "halfway there" blog entry. We're thinking of painting the cabinets cream (same color that's below the chair rail), repainting the tan wall a slightly different shade... and replacing or painting the mantle wouldn't hurt either. But for now we've got more important things to spend our time and (Benjamins) on... so classify this one as a long-term work-in-progress. It'll all get done in due time.

Empty

We got beat by another tenant. There's nothing like driving up to your own rental property and finding it empty with zero notice and (of course) zero rent in hand. The irony is that, as we approached what I believe would've been the end of this particular tenant's 4th year with us, Venesa and I had pretty much resolved not to renew her lease in the Spring. Well, she obviously beat us to the punch (and oh what a sucker punch it was). Our reasons for thinking eviction? While she never missed a payment in those 40+ months (praise God for silver linings), the hundreds of dollars in late fees that she steadily paid (seemingly more often than not) never seemed to outweigh the heartache of wondering when our luck would run out with her. [As an aside, I remember one string of months last year when she paid late fees for so many months in a row, that I honestly forgot how much her rent was really supposed to be]. Renting to her was like playing a hot hand at the poker table: You knew it wouldn't last. It couldn't last. It was all about getting out while you were still ahead. Well... so much for that window of opportunity. Doggone thing slammed shut right on my finger tips.

I could write an entire book on everything that led up to this particular incident, and two more chapters entitled, "Where do we go from here?" But at the end of the day, the only productive thing to do (after some solid prayer) is to pick yourself off the floor and get to work with the development and execution of a well-laid plan. In the meantime, I pray that God continues to honor our obedience to Him and cover our family (financially, emotionally and spiritually) as we navigate this storm.

Doggone Deadbeat Tenants.

Something Screwy

If you're ever trying to call me and I don't answer my phone, there's pretty good change that I'm somewhere in the house changing a light bulb. New house tally: 103 light bulbs, total. 79 inside. 24 out. And 1 homeowner holding his breath in anticipation of the first power bill.

Chesapeake Pt II

Random thoughts about the move...

1. According to her, V hates moving, but I love it. There's nothing like a fresh start. It forces you to reevaluate your physical (and mental) inventory and abandon your comfort zone for the potential of progress. Change. Love it.

2. Justin is so not feeling the tire swing. Jasmine on the other hand...

3. Say what you want about stereotypes, but as a landlord how can you not love the section 8 program?! Under what other program can your tenant flat out lose their job and your rental payments not skip a beat. Love it. Love it. Love it.

4. It's kinda sad to think that the kids probably won't remember our house here in Norfolk despite it being where we lived when they were born and where they spent their first few years (I certainly have zero memory of my first domicile)... But then, this digital age is so rich with technology that maybe they won't forget as much as I think they will. Given all the photos and videos that they've logged here, Justin has already seen more photos of himself on the internet than I've seen of myself in my entire life. We live in a totally different era.

5. It's going to take a lot of discipline not to invest too much (if any) money into someone else's property in the name of trying to make "our house" the way we like it. We're gonna have to focus on them long term goals. Constantly.

6. If you thought we were frugal before, then you just wait. We'z about to get super frugalistic on that behind as we do what we can to save up for our next home... wherever and whenever that may be... because we sure aren't trying to rent forever. I would put a time limit on it (2 years sounds like a nice number) but I ain't stupid. We were supposed to be out of this house 4 years and 2 kids ago. Go figure.

7. Having a refrigerator flush with the wall seems like a super cool idea until you realize... now where are we going to put all of these magnetic toys and to-do lists? I'm way too OCD to have all of that stuff plastered on the front of the fridge. We'll figure something out.

8. And last but not least, what's a new house without some new big boy toys. Meet my new friend John Deere. Forget about the fact that I don't even know how to turn it on yet. I'm so excited that I don't know what to do with myself. Never been so excited about watching the grass grow. Is it springtime yet?

Norfolk to Chesapeake

We're moving! I don't even know what else to say...

As the saying goes, things move so quickly in life that you've gotta be ready to seize the opportunity when it comes. Well, it came. And we grabbed it by the neck. As of a few weeks ago, we had decided to put off the prospect of moving for at least another year. We were more than content that the neighbors who had given us the most grief had moved out and the original owners of that home had moved back in... instant 300% upgrade to the neighborhood. We had also just revisited our financial goals, long term and short, to adjust them based on our new expectation of not leaving our home for a while. V had also just come home from her 2-week stint in SC, expecting to settle back in and return her life to normalcy. And then BAM. A sharp left turn knocked all of those plans out the window. And here we are. Packing up and getting up outta here.

Now for the specifics. Last Monday, our latest section 8 applicant finally got approved. Just when we had given up hope of ever getting someone with a section 8 voucher even close to our asking rent, we got one. And while they still missed the mark by $300... (hey... the first potential tenant from a few months ago was off by about $900) something told us that this was it. For one, we got a good vibe about the tenant. Two, the $1525 per month we'll get won't cover the mortgage, but it will cover the place we'll be renting for ourselves in Chesapeake (which we found, agreed on, and signed off on in record time). Three, it's no guarantee, but a rent increase via section 8 seems likely after the first year of occupancy. And so now we're packing. The moving truck comes in 4 days. We will turn over the keys to our primary residence in 7 days. And this, my friend, will be one crazy week.

And while we don't know exactly what the next step will be, the good news is that this puts us in a pretty decent position in a few respects. For one, I'm up for tenure and promotion this year at The University. Having our house rented and not having to worry about a quick sale in this awful market will give us a nice amount of mobility in 2011 in the event that the university administration loses their collective minds and decides to shaft me in any respect whatsoever. Secondly, it officially makes us the owners of a 3rd rental property. Granted, when we first started the rental thing, I was always hopeful that we would've had rental property 3 ages ago... and whenever it did come, I would not have guessed that it would be in Virginia (the 1st two are in SC). But life has a funny way of turning your grand scheme of a plan on its head and spinning it in a totally different direction. So here we are. I suppose we're exactly where we're supposed to be. And without a clue as to where we'll be next. But enjoying the moment, and doing our best to hang on. Not to mention pack up... and get out.

Buckle up, kids. We're going for a spin.

We'll see you in Chesapeake.

Boundaries

Granted, it's the middle of November... but I am still happy to announce that part III of the Summer Project Trifecta (deck, garage, and fence) has officially been completed. When we first moved into this house the two obvious downsides were the neighborhood not being the greatest, and living on a busy street. Well, between a local hangout burning to the ground, and a very conscious, directed, and concerted effort by the City of Norfolk and the Norfolk Police Department to keep Five Points off of the evening news... the neighborhood has turned around quite a bit. However, the busy street in front of the house doesn't seem to be going anywhere.

And it's funny because we swore that we wouldn't be here when we had kids... and that soon became, "we definitely won't be here when our kids are walking"... "oh wait... what I meant was when our kids are in school..." Okay... so fast forward five years and two kids later (wow... time has in incredible way of flying by and making a mockery of your plans, doesn't it?)... here we are, at the same ol' house we've come to know and love. And so with one kid ready for a bicycle and the other crawling at the speed of light, it was finally time to set some boundaries.

"I'm the foreman... and I say it's crooked!"

Justin tests the fence by pounding his soccer ball into it.

Put 'em to work

"I'd like my one phone call, thank you."

Welcome home, Peace of Mind.

The Finish Line

It dawned on me one day that, with our garage in the back of the house, we see it about 10 times more than our front door... which means it essentially serves as our foyer and sets the tone for the rest of the house upon every entrance. So with that, the extent to which it was starting to become an abyss of messiness and clutter was killing me... hence the birth of the garage project. As for the title of this entry, "The finish line" is exactly what I thought I'd never see with this most recent home improvement project... but it's done! After more nights and weekends than I care to mention, our garage has officially been spruced. Whoo hoo...

Okay... celebration time over. And just like that, it's time to move on to the next project: the aluminum fencing that we ordered for the front of the house came in about a week ago and is just sitting in the backyard... taunting me with every pass... and awaiting installation. Oh what fun. Home ownership. The eternal project. Bitter sweet. Gotta love it.

The south side of the house used to be a swampy bug-infested area that I just loathed to mow and maintain. So I finally got wise, filled it with rocks (still can't believe I paid that much for rocks), and made it suitable for a shed and storage area. If nothing else, I was excited to get the lawnmower (now in the shed) out the garage. Talk about a space saver.

Now I Know

If anyone ever tells you that owning rental property is a piece of cake, tell them that you don't like cake! Rewarding? Certainly. But easy? Maybe 354 days a year. But those other 11 days can be a doozie.

A few months ago, our best tenant ever received his military transfer notice and subsequently gave notice to vacate Rental Property #2 by the end of July. The bad news is, after 2 weeks of receiving ZERO calls about the property, we had to drop the advertised rent about $100 just to get a few leads. The good news is, we found a new tenant pretty quickly after that. Yep. Tenant #4 (we've had two at each property now) is moved in and (fingers crossed) hopefully in position to stay an awfully long time. The toughest part of owning these properties so far has definitely been the transition work between tenants, and this time was no exception. But in truth, this is the first time that we had to experience the full brunt of the transition, as we got away with the bare minimum during the first transition a year ago (the good part about the first exiting tenant beating us out of his lease was that he wasn't there long enough to really mess up anything). But this time was the full monty. And if nothing else, at least I can say I now have realistic expectations of what to expect in the future with a tenant transition: 4 days of fun.

Day 1: It took half a day just to walk through the property and make my multiple lists with 3 things in mind: What needs to be done (some repairs, some replacements, and lots of cleaning), what will the exiting tenant be charged for, and what needs to go on my Day 2 shopping list. After that, the second part of Day 1 was making phone calls to schedule contractors / painters / cleaners / whoever will help me for cheap. We got lucky in that everyone was available on pretty short notice.



Day 2: What surprised me the most was that I needed a FULL DAY just to shop for everything on my list. Of course, with a fresh pair of eyes, there was also a whole lot of revisions to all the lists made on Day 1. But after trips to 4 different Home Depots, 2 Lowes, and a Walmart, I was set to get to work on Day 3.



Day 3: Easily another a 12-hour work day. This is when you become the plumber / electrician / dry wall / cleanup guy (it's either that or pay someone else to do it). Rewire light fixtures, install tile flooring, put up bi-fold doors, blah blah blah... Basically git er dun... because you've got 36 hours until the new tenant gets the keys to the front door (oh yeah... that reminds me, add "change / re-key locks" to the list).



Day 4: Finally, the help arrives. Maid service, house painters and carpet cleaners. That wasn't the preferred order, but hey in a pinch you do what you've gotta do. And of course, be ready to work around all of them as you find a half dozen other things that you've overlooked during the first 3 days (like broken shelves in the closets, and a garbage can riddled with compacted trash, flies and maggots... can you say 5 gallons of bleach and a very long scrub broom?)...

About $1500 dollars later ($1800 if you include newspaper advertisement and lawn service... $1300 if you deduct from that the $500 we kept from the previous tenant's deposit) the renovations are a done deal. The keys and cash are exchanged, the tenants move in and everyone is happy...



Until you get the call that we got today about there being a crack in the master bedroom bathtub. And you're thinking: Bathroom... crack... upstairs... water damage... through the floor... downstairs ceiling... rotted wood in between. This can be expensive. Good Lord. I need a nap. And the carousel spins again.

Lemonade

When there's no money in the budget for a true vacation, it's time to turn to that lemon of a deck out back, start the transformation, and make do with what we have... because who says you have to travel away from home for a little slice of tranquility?

Now the only question that remains is, why didn't we do this 5 years ago?! Barbecue at our place. Everyone's invited.

Space Invaders

"I think there are birds in the laundry room". That's how it started. And the whistling and fluttering of wings was so loud that for a second I thought she was right. As it turns out, they weren't in the laundry room itself... they were in the vents. Building a nest. Yep. The dryer vent. And the upstairs bathroom vent. And probably scoping out the other two vents for some friends they know. But as of last week, these little buggers are going to have to find someplace else to freeload.












With homeownership, there's always something.