$314!!! Those are the types of savings I get excited about. I wish I could say the same for rental #1 (those closing costs were literally about 20 times more)... but you live and learn. As for the required repairs, here is what we're looking at:
Remove the gawd awful wallpaper throughout
Remove the what-were-they-thinking do-it-yourself molding around the ceiling and windows
Paint entire house
Paint exterior of front door and shutters
Remove storm door framing and refinish surfaces
Replace spring on backyard screen door
Order garage door openers & reprogram frequency
Ensure that all ceiling fans work
Pressure wash entire home exterior
Replace mailbox and wooden post
Install blinds throughout house
Change the locks on all exterior doors
Install all missing bathroom fixtures (faucet knobs, etc)
Install vanity lighting in master bathroom
Replace all carpet
Replace one window
Install new window screens where needed
Replace or repair banister
Replace or repair laundry room doors
Inspect and repair closet shelving where necessary
Install new toilet seats in upstairs bathrooms
Fix hot water heater
Fix running toilet
Address any problems with water pressure
Install closet door in 4th bedroom
Address the 200 little things that might be overlooked, but that have to be done to get the house into move-in ready condition (cut padlock to backyard, replace light bulbs, door stoppers, toilet paper holders, matching wall plates, fireplace key & covers to light fixtures, etc.)
Green stuff on the siding is nothing that a little bleach pressure
wash can't take care of.... but there may be no hope for the
decorating skills of whoever put up that bathroom wallpaper.
The targeted completion date is April 5, with tenancy beginning by May 1. Those may be high hopes but hey, if you've gotta hope for something, why not hope for the best? A lot of things will have to line up perfectly for us to pull that one off... but stranger things have happened.
Financial Strategy
As for the purchase itself, we definitely skipped a few steps to get to where we are now. From everything we're learning now in FPU, building wealth is supposed to be Step Three in the overall get-rich-slowly scheme that we've got cooking in our financial crock pot. Presuming at least $1000 in savings to begin with, Step One is having all of your debt paid off and Step Two is having an emergency fund of 3-to-6 months of expenses put aside. Without those first two steps taken care of, I'll be the first person to tell you that owning three mortgage notes (2 rentals + our primary) can be a surefire recipe for disaster. Just last week in FPU class, Dave Ramsey reiterated that a person should never invest in real estate without having substantial cash reserves in savings to smooth out the rough months. And in December, V and I certainly got a taste of the ugly side of real estate when our first tenant bailed on us... leaving us with an extra mortgage payment and utility bill to carry for about 2 1/2 months. Long story short, it was a reminder that responsibility for a bad rental property with no back-up savings can potentially have "financial disaster" written all over it.
Up to this point that was a (calculated) risk we were willing to take in order to get Step Three of the process jump started. But now it's time to stop tempting fate and re-prioritize our goals... because tenants do leave (sometimes in the middle of the night, as we've learned) roofs don't last forever, dirty walls need repainting, and carpet eventually needs replacing. So with that, there won't be another rental property (or any other investment tools) 
for a good while to come. For now, our attention will be squarely on those first two steps: eliminating debt and raising cash. And on that note, here was our financial snapshot from about a year ago:
Student Loan I: $8,647.19
Student Loan II: $12,125.40
Stupid Tax: $8922.51
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Debt Total: $29,695.10
Even including the proceeds from the flip property, we were projected to spend 7 grand more than we make this year, bringing the total up to a $36,695 deficit that we needed to shovel ourselves from under. Since that snapshot was taken, two things have happened. For one, we ended up with a tax refund of $4000 rather than the tax bill of $3000 that we projected and set aside for. So that $7K swing eliminated the 7K shortfall that we were bracing for, bringing the total back down to $29,695.10. Secondly, over the past 12 months (and particularly since FPU and Stanley Johnson) we've become fanatical about budgeting our money, curbing our spending, questioning or purchases, and paying down debt. So with that, the here's our new financial snapshot:
Student Loan I: $5,682.45
Student Loan II: $11,048.44
Stupid Tax: $1966.35
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Debt Total: $18,727.35
Still a big number, but we are excited about our progress. So now, one year later, it's time to tweak our goals. The (short term) Goal #1 is now to eliminate Student Loan I and the Stupid Tax completely by the end of the year (leaving us with Student Loan #2 and about $10K to go). That will position us nicely for Goal #2 which is to save at least 10% of our salary each month (as of this month we've worked our way UP to a measly 3%). With Goal #1 accomplished by December, my hope is that we can accomplish Goal #2 by the first quarter of 2009. Goal #3 is then to work towards having our 3-to-6 months of expenses put aside as an emergency fund / buffer against financial crisis. For us that equates to having about $40K in some type of liquid investment (e.g., in our ING money market account). Granted, that's a whole lot more than either of us have ever had at one time... but after just 2 months of using a zero-based budget and the envelope system, those numbers no longer seem as far-fetched as they used to. For us, that amount should be enough to withstand a dose of catastrophe to our careers, health, or lifestyle without having to endure severe and immediate financial hardship (or bankruptcy). My projection for this goal is somewhere in the neighborhood of 4 or 5 years. That gets knocked to 3 years if we're super aggressive about it, the photography business takes off, and everything else goes perfectly. And if we sell our house, then we get to "pass go AND collect $200 dollars", as we'd be able to use our equity to fund our emergency fund in one lump sum. And knocking 4 or 5 years off of your financial planning horizon is always a good thing.
Goal #4 is to revisit the various investment strategies and wealth building tools that we are currently putting on hold (401K, 403B, real estate, ROTH IRA's... yadda yadda yadda). We'll probably reinsert these objectives when we're about halfway to achieving Goal #3 since (1) I'm a sucker for overlapping tasks and having things cooking in the background, and (2) the sooner we starting diving into this arena, the sooner we can begin reaping the benefits of compound interests, matching programs, and long-term market performance. But until we've got enough cash to where a tenant dropping dead tomorrow does not make our financial stability implode, putting any more money towards Goal #4 would probably be a mistake.
And of course, ALL OF THIS is subject to change at the drop of a hat (or more specifically, the drop of another baby... or change in job, location, prerogative, or financial objectives). But hey, you've gotta start somewhere. So that is what we are doing to secure our financial future. Being deliberate with our money. Pay off our debt and saving with the same fervor and intensity that we put towards everything else. How about you? Motivated yet?
