Rental House #2 Details

Our newest tenant moved in on October 1st, so I figured it would be a good time to stop slacking and post the details. This one has a funny story with it. House #1 we bought on location location location, and house #2 is no different, being an adorable 2/1 that’s walking distance to a cute downtown with shops and lots of activities like a farmers market on the weekend. Turns out I totally have a type. 😂

First off..let’s talk money, because I know y’all are nosey like me..lol. Since we are paying the mortgage on house #1 out of our own money. (we no longer have daycare, so replaced that payment with the mortgage payment) This allowed us to use the rent funds from house #1 to fund the down payment of house #2. Our tenant for house #1 had paid the whole year up front, which was around $10,000, so talk about creative ways to leverage other people’s money. I decided to put that money to work, instead of letting it just sit in our account being lazy. 🤷‍♀️

We found house #2 and put an offer back in June that was like $12k under asking, but a fair offer based on comps in the area. They didn’t accept it, and they ended up having someone else back out due to finances falling through. I found out because I was creeping online looking for the next deal and saw it pop back up on MLS. Funny part, they ended up dropping the price to the same amount we originally offered. So we decreased our offer by a few grand, and the seller accepted it. Should have just accepted our first one. 💁‍♀️

So total purchase price was $86k and we put 15% down, so around $13k to closing and our monthly mortgage payment is $595. We are renting it out for $875, so around $225 cash flow after mortgage and property management. For the property manager, we will pay around $50 a month, and one month rent for the initial showings and tenant screening. We didn’t have much of anything to do or money to spend to get rent ready, besides a whole lot of magic erasering and replacing the nasty toilet. 🤢

The tenant did ask if she could install a garage door opener (with her own money) and we told her no that we would not only cover it, but we would send our guy to do the install. She works crazy shifts and said she would feel safer being able to pull right in late at night. I honestly didn’t even notice it didn’t already have an opener and felt bad. Before she moved in, I did get a bid for converting the one car garage to a bedroom and think I will save up the cash flow to pay for that renovation after this tenant. We may even get crazy and attempt this project on our own. 😉

A few things I learned through this one.

1. Life was really busy when we got this one, so I enjoyed not having a lot of random little details like trim painting or landscaping or really anything to do, but I also feel like I’m ready to roll up the sleeves on the next one. 💪🏼

2. I am excited about the potential to increase the value and rent through adding a bedroom. It would only take about 2 1/2 years to recoup the project expense through increased rent, and that doesn’t even cover the added value that we could then use to BRRRR, just with a few of the r’s switched around in there. 😜

3. I’m so glad to have started the tenant move in baskets. It went over well and sets a good first impression for under $20.

4. I am feeling a little uncertain about the property management portion, and think we have learned a lot since we first started. I know we can handle on our own and my husband thinks opposite. So I’m working on my persuasive speech for self management on the next one (I can’t wait to report back on who wins this one).

5. I am ready for the next deal..since you know my type..who’s got it??

Advertisements

The Debt Epidemic

🚨Keepin it real rant ahead🚨

This is us..this is America..scary huh? What if I told you that we are all responsible for this culture of debt and living above our means and we all have to contribute to putting an end to this. It’s hurting us, our kids, our health, our planet, it’s an epidemic and I wish more people were feeling terrified about the topic. It just keeps getting worse each year, small credit card purchases, car payments, student loans, slowly adding up to over $13 trillion. 💳

Who’s ready to break the cycle?? And I don’t mean just pay off the minimums and maybe a little extra to continue to be a slave to debt for the rest of your life. I don’t mean to just do a debt consolidation or home equity loan or line of credit to pay off..because debt is still debt..whether it’s paying ten different people or paying one. And now that you’ve consolidated, guess what, you’re probably just going to add MORE debt now that you’ve freed up those credit cards. 🤷‍♀️

Your past will continue to haunt you if you aren’t ready to take a long hard look in the mirror and realize that YOU created this mess, and YOU have to do the hard work to not only get out of it, but STAY out of it. You have to STOP talking about how you don’t make enough money, you’re just barely scraping by and don’t have any extra to pay, maybe once you pay off the car or once you get that tax return you will, or once you get a raise you will, you are lying to yourself. STOP playing the victim and STOP making excuses for your spending habits. You’re only hurting yourself.

Also, those student loans, yeah those suck just as bad as the credit cards, but you CHOSE to go to school and you took them out, so guess what? You owe it..so PAY that shit back already!

YOUR kids SEE you living that lifestyle, and they HEAR you fighting about money, and they FEEL your stress at the end of the month when there’s not enough paycheck to go around. They see you treating yourself “because you earned it”, and they are learning that shopping makes everything better..new stuff will take away that rough week..only it wont.

Harsh words, but let me ask again..who’s ready to break the cycle??

Lifestyle Choices

This is going to be one of the hardest topics yet to cover at a very high level and also my first mention of FIRE in my writings (financial independence retire early). My goal is just to inform you of two choices and get you rethinking, especially if you feel like you don’t have choices and are stuck in your current financial position. I am by no means claiming to be an expert on the topic or to get into the HOW in this post. I have just dabbled with both lifestyles mentioned and I feel like there are not enough people (especially women) who are thinking about or providing information on the topic..so looks like you are stuck with me. 😜

The above picture is the best way I could summarize the concept of lifestyle creep. For now, as mentioned, this is just to introduce you to the topic, so I have a few stats and thought provoking questions to hopefully do so.

First..the stats tell an alarming story. I recently read in this USA Today article https://amp.usatoday.com/amp/34378157 that the average household is bringing in around $75,000 annually, and of that, they are spending 90% of it, which equates to $67,500 outgoing and only around $7,500 extra annually. (which the article states a lot of this is going towards interest payments on consumer debt). This breaks down to $5,625 in expenses each month and $625 extra. That doesn’t leave much wiggle room and helps paint a picture as to why people aren’t putting anything or very little towards saving, investing, emergency funds and retirement. 😳

Essentially pointing out that people are living a paycheck to paycheck lifestyle. I don’t know that this was a surprise to any of us, but it may be a surprise that people are making the choice everyday with their actions and spending habits to live this way. Disclaimer that there are people living in poverty, so for the sake of my post, I am referring to the middle class mentioned above.

Now on to the questions. Feel free to answer in comments if you want to share, or just answer to yourself or as an internal conversation or with your significant other. Keep it real because denial is a great way to protect yourself from the truth right now, but long term in fact it just ends up hurting you more.

1) Are you living paycheck to paycheck like the scenario mentioned above?

2) Have you noticed that no matter what you do, you just can’t get ahead?

3) Do you receive regular raises or have you changed jobs to make additional money over the course of your career, yet you aren’t seeing a difference in your monthly budget after expenses because they always seem to match what’s coming in?

4) Do you ever pay attention to how much you spend on conveniences like pre-made food, someone to mow your lawn, someone to clean that big house, someone to wash that new car, someone to groom your dog, someone to do your hair/nails/makeup, etc because you are too busy working to do these things?

5) Have you ever wondered why things are like this for you and probably a lot of people you know, yet it’s still a taboo topic to discuss money, so everyone just keeps working harder and staying in the vicious cycle mentioned above?

6) What will happen if you change nothing and keep following this path?

Please reference the above picture as you are going through these questions to see if lifestyle creep has found a way to creep into your life. Remember..be honest.

Next, know that there is another option. As mentioned above, lifestyle creep is a choice and I’ve said this so many times on purpose. So many think they have no choice unless they make more money and this is far from the truth.

Lifestyle creep is a path that many in our society have walked and not challenged until recent years. Here are some questions to ask yourself and see if you’re one of those ready to challenge the traditional path and choose a different way.

1) What upsets you the most about always being broke and living paycheck to paycheck?

2) How has constantly feeling stressed from working so much and not having any money to show for it affected you?

3) What are your values and what are you spending your money on? Do they line up?

4) What are your passions and what do you dream about doing?

5) What could change if you have an open mind and put in the work, I mean really put in the work, to change your current financial path and mindset? Think of one quick and easy way you can change today.

6) What will happen if you start to live a lifestyle designed by you instead of others?

As mentioned, a lot of people have started looking at the above stats and questions, and are starting to make the decision to customize their lifestyle based on their own unique values, not what society tells them to value. Spoiler alert..it’s not through making more money as mentioned above..it has never been about that. It’s about a lifestyle of being content with only those things that bring you value. Luckily, it usually don’t cost anything at all, just the basics needed like food, shelter, experiences and none of the extra crap. 😊

Don’t get this lifestyle design twisted with a life of going without, because it’s actually the opposite of that. You have room for so much more when you let go of stupid shit.

Well..shocker..I have lots more to say but I’ve said enough for one day. What are your thoughts or questions on the two different paths mentioned above?

8 ways to eat out for less

Chipotle is my weakness and I love everything about it..except that it would cost my family around $750 a month if we ate it for dinner every night. 🤑

So we try to limit it to be a once a month treat, and try to find ways to make it even more affordable than it already is. Today, we got 6 servings of food for $16.72!! I also got enough napkins for both of our car glove boxes for the next few months..lol.

But while I was ordering today, I thought about some different ways that you can save money while eating out, no matter what you’re craving.

1. Don’t eat out at all..and if you’re like me and know that not eating out at all is a recipe for disaster, then limit it to once or twice a month and budget for it. (if I don’t eat out at all, then I will fall HARD off the wagon and go on a wildly expensive and unhealthy eating out binge)

2. Eat before hand. Yes you read that right..grab a snack first so you aren’t ordering more than you need or super sizing because you’re starving. Or if you’re eating out for dinner, make sure you had a good lunch that day.

3. Does everyone really need a meal or at minimum..their OWN meal? Likely not, so do like we do and make quesadillas at home for the kids and let them eat a little guacamole and chips as a side or you can share an order of food also.

4. Much like the previous tip, the portion sizes are ridiculous these days and WAY more than one person needs in one sitting. I ask for extra rice because it’s free, and I can make 3 meals out of one bowl.

5. Find some add ins or sides from home. We usually do chips from home and add some carrots and grapes for sides. Or if you’re ordering a pizza, skip the breadsticks and make a salad at home with it instead.

6. Look for promotions! Chipotle was doing BOGO for wearing a youth soccer jersey this weekend, so I dressed my soccer star in his and got a free bowl for it. I know Chick-Fil-A does similar dress like a cow promotions. This makes it fun also, because you can dress ridiculous and get some crazy second looks from people.

7. Join the rewards program. Don’t get me wrong..don’t use the rewards program as an excuse to eat out all the time, but if you can earn a free entree down the road for when you do plan to order, then take full advantage of that. If you’re like me and get excited and forget, Chipotle has a way to upload receipts afterwards. (as long as you do it within 30 days of ordering)

8. Do carry out. If you dine in, you are more likely to get pressured into adding on drinks, appetizers, and desserts that you don’t need. Also, you will need to add a minimum of a 20% tip, and tipping is also something you have to do for delivery. So avoid it and go grab your food and take it to the park or take it home to eat. Save the fancy sit down meals for extra special occasions, like an anniversary or birthday.

Those are some of my secrets to saving money while still getting your favorite fast food fix. What are some ways you save when eating out?!

Garage Sale Season

With end of summer upon us, I start thinking about all of the garages full of stuff that is no longer used, too small or has been upgraded. I have memories of being a kid and getting up early every weekend to go to garage sales. (bribed with donuts and the hopes of a new toy of course) 🍩 🧸

Nobody asked me about my opinion on garage sales, but I’ve decided to tell you anyway. I can say that I had one several years back and made around $800 when I was on maternity leave. I also did one for a work fundraiser and made around $500 for our Big Brothers Big Sisters bowling team. For mine, I sold a bunch of maternity stuff and baby stuff we weren’t using and all of Kylie’s clothes we had saved from NB-4T, after picking out the gender neutral stuff for Caleb of course. 😉

Looking back..I definitely think people with babies up to 4 years have the best luck. Also, people in a high traffic area or neighborhood having a lot of sales the same day can also be successful. But I also think we can avoid the need for a garage sale by sticking to the bare minimums and borrowing stuff that we will only need for a short period of time. Babies seem to be a reason to buy everything, and baby registry’s make it easy to add a bazillion things you will likely be too exhausted to figure out how to use once parenting shows you it’s true colors. Then it will end up in your pile for the sale, likely priced at half what it costs, just to have someone ask you if you’d take five dollars for it. (I know because I’m a garage sale hardcore negotiator) 😂

If your sale includes clothes, shoes, and household items, and you still have a closet full after outing for the sale, then it might be time to just stop and reflect on your stuff strategy. Not only did that clutter used to be money, but that money used to be your time.

I will say if I’ve finally persuaded you to join my minimalist lifestyle and you are simplifying your life and need a fresh start, one big sale may be a good idea. But only if it ends there, and you don’t just go out and accumulate more stuff to replace what you sold. Also, think about the time and energy that goes into one. If setting up, pricing, getting nasty warm lemonade for the kids to sell and dealing with them badgering your customers for 5 hours on your Saturday morning with extreme temperature variations like smoldering heat or pouring rain and going back and forth with hardcore negotiators like me sounds like a good time to you..well start borrowing those tables my friends. 🤷‍♀️

If that sounds comparable to a root canal, then selling things in “lots” on Facebook Marketplace is a great alternative. Or let’s be honest, we all know that person that’s selling clothes that are so loved they should be donated. Just saying..don’t be that friend..also don’t be the friend that sells hand me downs you got from a friend. (Totally did that on accident and still getting shit for it two years later) 😂

When it comes to shopping at garage sales, this can be a double edged sword. I remember finding a rocking chair with foot rest at a garage sale for $15 that I used with both kids. I negotiated it from the $30 it was marked at and was so proud. But I’ve also lost all common sense and self control at a sale and just bought the whole damn table of baby clothes I didn’t need. So be careful when you shop..they can be sneaky and fill your trunk up before you realize you only needed a few things. 🤷‍♀️

Now you know my thoughts..what are yours and please share your garage sale fails and success stories. 😊

My Biggest Financial Mistake

We left off on my last post in 2005, driving a gas guzzling 2001 Dodge Durango while commuting an hour and gas being $4 a gallon. 😬 Go back and read Part 1 if you haven’t, because there’s lots of entertainment there that I can look back on now and say..what the?! 😂

Back to the Durango part of the story..I had just started Financial Peace University and had also just started dating my now husband in 2007. I really wanted to do the debt snowball and keep the Durango and pay it off. But I was young and stubborn..and well..still financially irresponsible and just flat out stupid. 🤷‍♀️

Sooo..long story short..in 2008 I traded that ole Durango in for a gently used 2007 Nissan Altima. I couldn’t qualify for a car loan with under a 16% interest rate on my own, so my boyfriend (now husband) co-signed. Why are y’all out here enabling my bad decisions by co-signing..can we say enablers?! While I am absolutely grateful for the help on the loans, the now wiser older version of me is like..well..that was a sign I shouldn’t be getting a loan..period!!! If I wouldn’t have had that option, then maybe I would have figured out a different solution that didn’t involve another loan and $300 car payment. 🙅‍♀️

With marriage, my husband brought a 2002 Nissan Maxima that was paid for. We ended up deciding in 2015 to trade it in for a 2014 Nissan Pathfinder SUV that we “needed”. So we did make that Maxima last a minute, and we even kept the Altima after we paid it off. (and my husband is still driving it today with over 200k miles) It smells weird and has different sounds, but it runs and that’s what our requirements list looks like for a car these days. 😜

We ended up selling the Pathfinder because it had transmission issues and pissed me off at the wrong time on the wrong day. The Altima was also causing some troubles, so I decided it was no longer safe to commute in. We ended up doing some minor repairs and my little brother used the car for a year or so. Fast forward to 2017 and impulse buying my 2015 Infiniti Q50..cause I need a luxury car that my kids can spill their drinks and empty snacks all over in, and slam the doors into anything that is there when they open them. It’s also important to have premium gas for a commuter like myself. 🤦‍♀️

Happy ending though..sold the Infiniti and replaced with a paid for in cash 2013 Nissan Altima with 124k miles on it. So we now have NO car payments and two Nissan Altimas to get around in.

I think it’s time to analyze the overall effect this financial mistake of having a car payment for 18 years had on my overall financial wellness. Hopefully this will help prevent it from happening to others in the future. If you take an average of $350 a month over that 18 years, that’s $75,600.

🙄😬😭🤢😳🤬🤔🤦‍♀️

I could have easily had one or two cars last me through that timeframe for under $10,000. What would life be like had I taken that money and invested it or saved it and used it for down payments on 4-5 rental properties? I could have used the cash flow to pay for a car of my choosing. Also, did having to ensure I could cover that $350 every month make me less of a risk taker on chasing dreams and playing it safe for a steady paycheck? Deep thoughts and questions we will never know the answer to.

What I do know is that I drove myself down a road paved with bad decisions for 18 years, but better late than never to realize it’s time to take a different road. 😉

I’m curious..what is your biggest financial mistake and what did you learn from it?

Haircuts At Home

Well..against several people’s wishes 🤣 I went for it and cut a little over an inch off using the Unicorn method. 💇🏼 🦄

BEFORE:

My thoughts 💭 ummm..I wish I would have tried this sooner!! I haven’t looked at the back, but my husband said it was straight, and he has to be seen with me, so pretty sure I can trust him. I feel very accomplished trying something that terrified myself and many others for me to try. It was actually so super easy, only took about 5 minutes, and was absolutely FREE. (my husband had scissors so I didn’t have to buy anything) ✂️

AFTER:

Just kidding 🤣..

THE REAL AFTER:

My family may be a little scared of me venturing out to their heads next, but going to try and earn their trust through “gentle” persuasion and possibly bribery . 💁‍♀️

With a family of four averaging $25 per cut, that adds up to around $900 a year and $15k over an 18 year period. This doesn’t include color, which I already stopped all together 9 months ago, or eyebrow maintenance, which I’m still trying to navigate on my own, literally one tweeze at a time (had a bad home wax incident of 2013 I’m still recovering from). 😬

The verdict: Go get you some nice shears, watch a few YouTube tutorials, put on a brave face, and go for it! If it goes well, send me a shout out. If it doesn’t go well, take comfort in knowing it will grow back soon. 🤷‍♀️

What can you do with that $15k I just saved your family? Feel free to Venmo it to me. 🤑

What else do you do at home or what should I try next on my new DIY kick?!

(Disclaimer: I am not a cosmetologist and your results may vary, so you have been warned that it’s all on you whatever actions you decide to take after reading this)