Countdown to Closing

My offer was accepted on rental #4 and now I’m in countdown-to-closing mode.   Because I want to start collecting rent ASAP, there are things that I do while waiting to close that take the pressure off on the backend.  I know some people will think, “What if the closing doesn’t happen?  Then you’ve done all this work for nothing.”  Sure, that’s a risk, but I’ve never had a closing fall through, almost get pushed back, yes, but never fall through.  So, if worst comes to worst, my pre-planning will be pushed back a bit.

Part of that pre-planning starts when I view the property.  I go through each strong potential property and video as much of the house as I can with notes to myself on what needs to be updated or renovated.   For the videos of the houses that I really liked but didn’t buy, I take screenshots of the parts of the houses that I liked for my reference for next time (i.e. a really good kitchen configuration or wall color that I liked).  The ones that I just didn’t like get deleted.

The below video is one that I made on the property that I just bought.  It’s a little lengthy but will give you an idea on what I look for in a property and what I think ought to be changed before I get rent it out.  My realtor is also an investor hence the side talk about smoothing out the ceiling in the living room.  Also, this video really only outlines the things that I need to change so even though it seems as if I’m harshing on the property, this is my second walk-through of the day and I had lots of nice things to say in the first go-around (otherwise I wouldn’t have bought it)!

With the video of my house that I bought, I make a list of what needs to be done and what materials I need to make that happen.  For the repairs that I don’t or can’t tackle, I call my various contractors and put them on the schedule for the earliest day they can work after closing.

In this house, I want my electrician to install recessed lighting in the living room since there are no overhead lights.  He said he can come 2 days after closing.  My handyman is coming the next day to patch holes from the electrician and to install a new kitchen backsplash.  Perfect!

When I decide on which repairs or renovations to do, I always look to get the biggest bang for my buck in the search for universal appeal.  In this house, the kitchen backsplash is an aqua color that clashes with the brown toned granite countertops.  I polled my realtor, the lead inspector, and house inspector and they all said that it’s got to go!  They would never rent the house with such a “feminine” color for the backsplash.  Same goes for the door that they thought was too girly although I really like the door color.  Because those are quick fixes, both will get a neutral facelift.   The backsplash will be either a white or taupe subway tile and the door will be painted red.

Goodbye beautiful blue door!

Staging the house is next.  The last house that I bought already had beautiful staging furniture and when I called the seller a couple months later to talk about who she used for staging, she told me that she did it all herself with stuff she already owns.  Genius!

Seriously, how nice is this staging!

So as soon as the repairs are done on this house, I will shop my own house for staging furniture and hire a couple of my daughter’s classmates who own a truck to haul the furniture to the house for staging.  I’ve already used these guys and they are cheap and efficient.  A real estate photographer is scheduled an hour later to take photos of the staged areas, then the furniture is hauled back to my house right afterward.  I know this sounds cumbersome, and it is, but there is a big difference between a tenant looking at an empty house online and one that is beautifully staged with upscale furniture.  I want to attract upscale tenants so the place has to look the part.  Also, stagers in my area cost about $1,000 to stage a living room and master bedroom.  My way costs about $150 to pay the kids for their muscle and truck and I know that it is staged the way I want it.

What a difference staging and professional photos make! This is another one of my rentals where I didn’t use either. Never again!

Also, the photographer costs about $150 and with that I get photos that I can use forever in my rental listing.  I never change anything inherent about the properties, so even if down the road I need to change the wall color, for example, it will still be a neutral tone and look almost identical to the photos.  Same goes for carpet.

My goal in doing all this pre-planning before I even close is to get the house on the rental market as quickly as possible.  With my last house, I had a tenant within a week of closing and although she was not the tenant who ended up moving in (LONG STORY), if I had not been ready as soon as we closed, the house would’ve sat for much longer.

Also, because mortgage payments don’t start until a month (or more) after you buy the house, getting someone to rent ASAP is like a getting a month of rent for FREE.  So, pre-plan before closing, people!  It’s worth it in time and money.

Pre-selling Your House

We are moving this summer!!!!!!  This totally deserves a thousand exclamation points because my husband and I are both on board with this decision, instead of it only being me.  We’ve even started looking at some houses, TOGETHER, instead of me just looking at house porn myself!  (P.S. house porn are those houses that you look at that are way above your price range and oh, by the way, you have no intention of moving anyway, so why are you looking!!!)

House Porn

So now that I’ve put that we are moving out there into the ethos, we have to do it.  NO TURNING BACK!

Okay, so as to not make moving a bigger deal than it already will be, because let’s face it, moving is a HUGE pain in the ass, there are steps that I’m taking to make it less painful.  So, with a potential 5 month lead time, here’s my plan of action:

  1.  Minimize!  People buy and hoard lots of stuff that they don’t actually use and we’re no exception.  I’ve got crap in my basement, stuffed in drawers, and crammed in closets that needs to go.  So, step one is to systematically go through all my closets, desks, drawers, baskets, really any place that is a crap magnet and minimize.  A plus to minimizing that you sometimes find uses for stuff that you haven’t used in a while.  When I cleaned out my junk drawer in the kitchen today, I found a CONGRATULATIONS banner that hadn’t been used in a while.  Right after that, my son’s doctor called and told me that after looking at his X-rays that he did in fact fracture his thumb while wrestling.  So…

    Congratulations, Buddy!
  2. Hoard boxes.  Since Christmas, I’ve been hoarding boxes.  If I get an Amazon order and the box is move-ready size, I put it in my basement to save for the move.  Luckily I have enough room in my basement to not have to break them down, put if you are short on room, break down the boxes and stack them along a wall.  You’ll thank yourself later when you don’t have to buy moving boxes.  Same goes for packing material.  HOARD!
  3. Make a punch list of every room.  I’ve started in the basement and will be going through each room with an eye toward selling so that I can fix anything that needs fixing (e.g. blinds that need straightening, wall paint that needs touching up).  I’ll also add little items to my punch list that I think a seller might want to see.  Think “replace the almond light switches to white ones” or “paint a room a neutral color.”

    My Basement Punch List
  4. Start staging rooms that aren’t in use all the time.  Growing up in Florida, I didn’t have a basement and my kids aren’t really basement-kids either so our basement doesn’t get a lot of use.  So, I’ve started staging that area which means that I’ve minimized, rearranged the furniture for maximum room, and de-personalized the space (i.e. no photos of the family).  Everything that is not 100% essential to staging has been packed away and stored in the basement.
  5. Slow pack.  If you’re not using at item and won’t be using it before move time, pack it up!  There’s no sense in running around at the last minute packing up a house when, at least in my case, I’ve got a few months lead time to slow pack.  The other perk of slow packing is that when you put an item in the box, think, “Do I really want this in my new house?  Is it worth it for me to haul?” and if it doesn’t give you those warm fuzzies, donate it or pitch it.  If you wait until a couple weeks before the move to pack, your goal will be to move the crap and think about it later.  Slow packing gives you time to think about it now.  My goal is to pack a box a day.  Today I packed 3.5 boxes from my basement.  Woo hoo!
Sweet, sweet progress!

If there are any other tips that readers want to share, please do!

Meet our #3!

Back in October, we bought our 3rd rental property.  My husband is a bit gun shy when it comes to buying rentals which is why we didn’t buy another right away after our 2nd rental that we bought over 3 years ago.   But, after I showed him the numbers (read: we’d be making lots of $$ now and in retirement), he was a convert.

Meet our #3!

Buying and managing our growing rental portfolio is my job because 1. I LOVE doing it, and 2. my husband doesn’t 🙂 .

So last Fall I started looking at different areas in which to buy and honed in on my “target” area in Baltimore about a half hour from where we live.  I chose this area because the price of houses relative to rent is just too good to pass up.  Long story short, I found a realtor who also invests in rentals, looked at a bunch of units, and put offers on some that were rejected until one was accepted.

Because the house is not right in my hometown, I wanted something that was turnkey so that I didn’t have to be there every day to either monitor contractors or do the work myself.  The one I chose has everything already done and I didn’t have to lift a finger.  I just had to find a tenant and start collecting rent.

I know that some people do creative financing to be able to afford buying rentals (see BRRRR method), but we like to do it the old fashioned way by putting 25% down and financing the rest with a mortgage company.  Well, maybe the old fashioned way is buying it all in cash but, yeah, we’re not that rich.  After all expenses are paid every month, we clear about $750 on this property.

This week I put an offer on rental #4, but it was rejected.  DARN!   That’s fine because I simply put another offer on the second house that I liked.  Even though I liked the first one better, I know I will get the same amount of rent for the second one.  Even though I love turnkey for the simplicity, this one needs a little bit of work (new backsplash in the kitchen and possibly new paint throughout since the walls are a light purple gray color) and I’m excited to put my touch on it ever so slightly.  Wish me luck!

And before ending this post, here are a few more pics of #3:

 

New Year’s Resolutions

One of my New Year’s resolutions is to get back into blogging because I really like it.  I just have to make time for it!  One way that I’m doing that is by prioritizing what’s important and will push me forward in life or make me happy.   What doesn’t will go by the wayside.

Every December I look for a paper planner that will help me get my sh*t together and this year I might have found THE ONE!  I’ve been using it for a about a week and love it.  It does take some time to set up because you have to decide what your long range goals are then break them down into monthly and weekly goals.  I tried using an electronic calendar but they don’t give you that big picture look on where you’re going; they are more of just a calendar.  I want to be able to write down my goals and break them down into manageable pieces then tackle those pieces.  This planner does that for me.

This planner also suggests different areas of your life that you may want to make goals toward and gives you examples.  I do the finances in my house and I love managing our money so every year, all my goals revolved around building our net worth with a couple other “life” areas thrown in. This year, I’ve made family, social, and personal development goals as weighty as my financial goals because those areas as just as important, if not more so.

So, in the spirit of sharing, in the hopes that my examples can motivate others and to hold me more accountable, here are a few of my resolutions for 2018:

  1.  Buy 2 more rentals.  This obviously is a financial goal but it also serves as personal development for me because I learn so much every time I buy another rental.  We currently have three rentals and I just put an offer on rental #4 so dang if my goal setting is not working!  🙂  I really want to buy one when no one else is looking because it’s like buying property on SALE (and who doesn’t love a sale!).  Typical buyers are not looking to spend a bunch of money right after the holidays and don’t want to go out looking when it’s 10 degrees outside (like it miserably is here).  I offered about $10K less than I normally would in Spring and Summer.   Fingers crossed that I get it!  BUT… if I don’t, there are a bunch more in the wings.
  2. Plan 2 outings per month for the family.  My kids are getting older (they’re 13, 15, and 17) and very soon they will be at college and will want nothing to do with us.  So, I want to spend as much FUN time with them as possible.  Typically our weekends revolve around cleaning the house (fun!  NOT.) and soccer games with an occasional play, symphony performance, or party thrown in.  We live very close to Washington DC and I can’t tell you the pitiful number of times we’ve taken advantage of sightseeing in our nation’s capital.  So, this year, there will be more trips to DC and more outings in general.  I want my kids to be sick of doing too many fun things with me!
  3.  Volunteer once a week at a local school.   When my husband and I were both in law school, we scraped by and lived in an area where the schools were good but not great.  Just before our oldest was to go to middle school we moved.  We wanted more room and could finally afford it.  However, we still have fond memories of the elementary school that our kids left and for the past few years, we’ve donated money to the PTA and to the school lunch fund.  While my kids were at the school, I was the PTA president for while and volunteered in the classroom a lot and I loved it!  I felt like I was making a difference, however minor, and really liked interacting with the kids.  So, I want to do it again at that same school.  The little kids are the cutest and that’s where I want to spend my time so every week I’m volunteering to tutor reading with the same kindergarten teacher that one of my sons had.  I start this week and can’t wait!
  4. Move into a McMansion.  Yes, that is what I wrote in my planner.  Dream big, right?  I have never loved the house that we live in.  I love the memories of course but not the physical house.  It’s a colonial and very segmented.  The whole “open concept” floor plan was but a glint in someone’s eye when our 1986 beauty was built.  We’ve talked about hiring a contractor to make in more open but the cost and hassle of that seems far bigger than just moving into another house.  We don’t necessarily want a bigger house (not that we live in a McMansion now, because we don’t), but I want a more open feel.  And maybe a pool.  And maybe a hot tub.  🙂

Okay, so that’s 4 of my 10 resolutions.  They will get done little by little.  Hopefully one of the two rentals properties that I want to buy will be done this week then that goal will be 50% completed!  What are your New Year’s resolutions?  Please share!

Rental Bathroom Overhaul

Yesterday I wrote about how I renovated the basement in our latest property and the bathroom reno was definitely the most labor intensive.  Because I had so much painting to do, I let my contractors do the all the work, but I did tear out everything for them before they started to save some money.  So I tore out the sink, vanity, toilet (ewww…), and shower walls.  It was fairly easy to do, it just took a while.  I had renovated a bathroom down to its studs before so I had experience this time around.

As a reminder, this is what it looked like post purchase:

Old Bathroom

Spectaaaaaaaacular right?!  What you don’t see is the vinyl floor coming up on the other side of the toilet where the years of urine overshot had made the glue unstick.  Gross.

So, to tear out the bathroom, I just worked my way from the front of the bathroom to the back.  Disconnecting the faucet was first, then I ripped out the vanity.  The mirror and light fixture came next.  Then the nasty toilet was on the chopping block.  All this took me a half day to do mostly because the vanity did not want to come out easily.

Basement Bathroom Torn Out

Removing the shower walls took the longest and was the most dangerous.  Imagine shards of ceramic slivers flying toward your body.  Goggles, long pants, and a long sleeve shirt were a must.  A crowbar and hammer made easy-ish work of this but knocking that hammer against the crowbar was LOUD, so I suggest ear plugs.

Basement Shower Torn Out WideAfter the walls came down, I pulled up the shower pan.

Basement Shower Torn Out

The last thing to do was the floor which the contractors did because it was vinyl and they used a blow torch to melt off the glue to pull up the floor.  I don’t own a blowtorch and honestly, after wrestling with the shower all the day before, I was happy to do nice, easy painting in another room.

So, after all my frustrations on the world were unleashed in that bathroom, I went shoooooooping!  Seriously, picking out new tile, paint, faucets, etc. is the best part.

I initially went to a specialty tile store since they were having a “huge” 20% off Memorial Day sale and spent about $1,200 on tile.  After all that time picking out the tile with the bonehead sales guy (I say bonehead because he tried to steer me to all the expensive, hard to care for stuff even though I told him it was for a rental), I just said, “Yeah, sure $1,200 sounds totally reasonable.”  I then went to Lowe’s and worked with a guy in the tile department who said, “A rental?  You definitely don’t want to spend a lot.  I know just what you need!”  He totally got me (reno soul mates) and I had all the tile I needed for $250!  Of course, I canceled the first outrageous tile order.  Big box stores really are the best for this kind of stuff…

After buying a toilet, vanity, faucet, and fixtures and having my contractors install it all, I had this:

New Whole Bathroom

I used Repose Gray by Valspar on the walls and that tied in beautifully with the tile on the floor and the accent tile in the shower.  I used white subway tile with a medium gray grout to modernize the space.  Because there’s not a lot of storage space, I installed a shelf above the toilet and also a medicine cabinet with a mirror above the sink.

Basement Bathroom Front

All said, because I did all of the demo, the bathroom total came out to be about $3,000 with labor.  It was more than I wanted to spend, but for the rent I was asking, I needed the bathroom to look swank and it will pay for itself in less than 4 months so for me, that’s a win.

After seeing the contractors put the bathroom all together from beginning to end, I think that next time, I’m tackling the entire project myself… except for the plumbing in the shower… that still scares me because of the whole leaking-behind-the-wall thing.  I’d try all the rest though.  Me and my crowbar and new tile saw that I still need to purchase… ahhhh, new project, new tools!

 

We Got Another Rental!

I’ve been MIA lately which means that I’ve been super busy with life and more specifically, with buying and rehabbing a rental property.  We already have one that we lived in before moving to our current home.

Townhouse FrontIt was our starter home and has so many memories for us since we lived there for almost 12 years through the births of all our babies, first steps, first words (I’m getting teary!).  Tuscan was 6 when we moved away and we drove by the other day to check on the place and he said that he LOVED living there and has so many good memories of playing manhunt, trick or treating, running around with his friends, and just being a little baby doll (my words, not his!).   I’m so glad we kept it!  It brings in fairly good cash flow per month and we refinanced a few years ago with a 15 year mortgage since we knew we’d still get some cash flow with a 15 year so in about 10 years, this puppy will be paid off!  So, that’s our first rental.

With this second rental that we just bought in March, the plan was to rent out the basement and to have our “home office” in the top two levels.  I was looking for something that was close to our current law office because we plan on keeping a professional office there to meet clients since we don’t want them in the “working office” and we didn’t want to travel a lot between offices.  Further, I wanted a fixer upper- that was a must because I wanted an undervalued property and you can’t find those with properties that are in tip top condition.

I posted on Biggerpockets.com (a real estate website that I highly recommend) on how I purchased the place and the podcast host, Joe Fairless, of The Best Real Estate Advice Ever read the posts and asked if he could interview me for his show, so if you want to find out the nitty gritty on how I found, negotiated, and purchased the property, you can find that here.  *I’m a star! (not really)*

Enough shameless publicity…  To make the numbers work for this property I had to fix up and rent out the basement so getting that area ready was top on the list.  There’s a good sized bedroom, a laundry room, a full sized bathroom, and a living room with a fireplace that goes out into the fenced backyard so there’s a lot of room in the apartment.

The first step was curb appeal since the front yard was a weedy mess and I didn’t want people scared off before stepping foot inside.  So I spent a couple days digging, planting, sweating, and getting really dirty.  I loved it though!

This is what the left side of the yard USED to look like:
Old Front Yard Left

And now it looks like this!

New Front Yard LeftThis is what the right side of the yard USED to look like:

Old Front Yard Right

And now it looks like this:

New Right Side of Yard

So with the curb appeal taken care of, it was time to move inside.  The biggest eyesore in the basement was definitely the bathroom, so that had to be practically gutted.

Before:

Old Bathroom

And, it now looks like this:

New Whole Bathroom

Much more modern and clean looking!

New ShowerThere’s so much that went into the overhaul, that I’ll leave the details for another post.  In short, it went from ugly to swank for not a lot of cash.

I also painted the entire basement to include the fireplace (yea, it looks so much better!) and the ceilings (yuck!).

Basement living room before:

Old Basement Living Area

And after:

New Basement Whole Room

New FireplaceAnd last but not least, basement bedroom before:
Old Basement BedroomIt’s a terrible picture I know, but here’s what it now looks like with lighter paint:

New Basement BedroomAs I was remodeling, I showed it to a couple people and the second person took it even though the bathroom was completely ripped out and such a mess!  I had all the finishes laid out though so that he could imagine what it would look like.  The only hard part was that he needed to move in a week and a half so I had to work sometimes until midnight to get it ready.  Honestly, it felt like one of those house flipping shows where I’m under the gun, working hard, WILL IT BE READY IN TIME!!!  It was… because I’m awesome and had no other choice. 🙂

So the renter’s moved in and now I’ve moved on to fixing up the upstairs. More on that to come!

I LOVED the experience of buying this house, fixing it up, and being a landlord so my goal is to buy another this year in September and to keep buying a couple a year for the foreseeable future (if my husband doesn’t divorce me over it…).  I’ve been reading a lot on the subject as well as listening to podcasts and just overall researching how and where to buy real estate and I’m excited to buy the next one!

Quick Breakfast Room Update

I wasn’t planning on replacing the chairs anytime soon in the breakfast area but when I saw these at Home Goods, I had to have them!

Back Side

The old chairs were more or less the same color as the breakfast table and that made for a boring breakfast area since there was no color anywhere in the space.

DSC_0044_2

The old chairs were not very comfy and also we had five of them that fit awkwardly around the table.

These new chairs (which just happen to be in one of my very favorite colors!) give the area a punch of color.  I love the modern lines and how well it relates to the light fixture.  And they may not seem like it, but they are super comfortable.  They have a groove for your butt that makes them heaven to sit in!  I also like the juxtaposition of our Craigslist barn wood table and the chairs.

Front Side

 

What I told myself to get over the guilt of purchasing chairs when we already had perfectly good ones was that the old chairs dinged the window molding (which they did) and also the ledge on the half wall behind the chairs (which they did).  Because the new dining chair profiles are so low and because they are upholstered, there will be no more dinging.  I just have to paint the old dings which I will get around to…

Whole TableI bought five of these chairs but only put four around the table since adding the fifth would be too tight.  The fifth one will be switched in and out as we need it.

We are buying another property soon and the old chairs will go in the new house so they won’t just be relegated to the basement to die a dusty death.   We’re actively looking and it’s so exciting!  At least I think so.  It will be our second investment property.  More on #2 as we find something!