House Update: 3 Mos

Seems like time flies when you're having fun, and also when you're NOT having fun. It's hard to believe I've been a homeowner for 3 months already!

Actually, based off all the mildly-horrifying-but-yet-also-entertaining stories from the neighbors, my teeth grinding issue making a reappearance, the number of new grey hairs I've discovered, and tight muscles I've experienced…. the only thing I'm having issues believing is that it's ONLY been 3 months.

One of the biggest stressors is adjusting to the neighborhood. All is not as it seems. The streets are lined with beautiful mature trees that almost meet in the middle to form a green tunnel in front of beautiful historic homes from the turn of the century. I'm close to down town and can walk to the grocery store(s), laundromat, and a number of interesting restaurants (Hawaiian BBQ anyone?).

On the other hand, I'm not entirely sure I feel comfortable walking or riding my bike to those areas. Everyone warned me against living west of {Major Road} so I picked a place to the east. However, no one warned me about living south of {Other Major Road}. I live two blocks south which is apparently enough to make all the difference.

I'm pretty sure I'm one of the few to have a college degree on my street. Most of the beautiful historic homes aren't in the best of condition and have been hacked into multifamily units. The cops have established a regular presence in the neighborhood. It's not an uncommon sight to see someone riding their lawnmower down the street or pushing a full shopping cart home from the store (only to abandon it later). Popping noises that sound more like gunshots than fireworks happen enough to not be surprised.

The house catty corner from me on street A houses a known car parts thief. The police are trying to catch him but apparently he's a smart thief and wipes the car down after stealing the battery/anything else that's easy to remove. The house across street B from me is rumored to be a front for the local gang. It's currently up for rent and seems quiet, but I know that could easily change. The house catty corner from me on street B used to be Section 8. Out of the 5 total bedrooms in the house, there used to be 17 children PLUS their associated adults living in the house. Fights broke out often, people regularly congregated in the street and obstructed traffic, smashed liquor bottles in the streets and neighboring yards, drug use happened in broad daylight, and guns were fired off. My neighbor 2 doors down from me told me she called the police every day on them for 9 months straight until they were finally able to kick everyone out. The owner had to sell after getting a number of violations slapped against the property. I hardly ever see the current residents now so things are much better.

“The Hole”

I worry about my house becoming “that” house. I had to call the police for the first time this weekend. I woke up at 530 am on Saturday to what seemed like an entire herd of people in the common space of the house. Talking, shouting, yelling, fighting people. I heard “don't fight don't fight you don't want to go back to jail!”.  Things started to calm down after a whole car full of people poured out of the house, but I still had to call the cops as the guy that started it all got locked out and started to try to force his way in the house. By the time I got transferred to the correct dispatch and played 20 questions, the guy was gone. The police poked around for a bit and then left.

Later, I found a hole in the drywall of my stair case. Since the instigator of the trouble was my tenant's brother, my handyman tenant gets to fix the wall on his dime. He also got a warning against letting people stay in his place without him being there. I'm not running that kind of real estate game! My tenants (and everyone else I know) might call me a slumlord, but I want to do better than that.

Speaking of making things better, I've been fielding quotes from contractors with an eye towards fixing up the exterior of my house. The gutters are original steel gutters that are rusted beyond any shred of usability, some of the wooden shakes and fascia boards are rotten (because the gutters aren't working), and the whole thing needs new paint.
 The picture to the left is my front porch. It has the potential to be such an amazing space. It used to have a patio furniture and an unwanted entertainment center on it before I got rid of them. Even just having those gone makes a huge difference.

But I'm getting ahead of myself here. I ended up getting four bids on the project.

Bid #1: Professional painter. He paints beautiful old houses and does a fantastic job. Voted number one painter in the area. Very expensive. He wanted $17k for just paint and labor as gutters and the wood repair would be extra.

Bid #2: My handyman neighbor. Not licensed, insured, or bonded. Doesn't want to see me get ripped off by any contractors. Would take a lot of time as he would be working by himself. $5k, I buy supplies.

Bid #3: Bad ass lady contractor. Normally does bigger projects but wants to stay busy until her next job. Has a passion for old houses and loves the details on the house. Has a crew and will take approximately a month. Currently running a special deal where any paint job gets you $1/sq ft deal on refinishing any wood floors up to a year later. $6500 all in.

Bid #4: Recommended contractor from my local real estate group. Super nice guy, pointed out a lot of details about the house, and insisted on calling me little lady or young lady. I think we crossed paths on what I wanted, because his bid came in at $61k. No, that's not a typo. I don't know exactly what materials he was going to use, but that's 75% of my mortgage. Let's pause a second and reflect on the ridiculousness of me sinking that kinda dough into JUST the exterior of my house.

Considering I didn't want to take out a second mortgage on the house or go into any kind of debt for the project, I went with the bad ass lady contractor. She never once patronized me and is genuinely excited to bring the house back to looking beautiful. The front porch wood will be replaced where needed, the whole thing is getting stripped, the front door is getting stripped, and then everything will be stained to match the original mahogany wood ceiling. The railings and steps will be stripped of their ugly brown paint and become white (or in case of the steps, painted and sealed with concrete paint). The rest of the exterior will be replaced as needed and painted. The gutters will be taken down and new seamless ones WITH gutter helmets will be installed. I'm pretty pleased about the gutter helmets, to be honest. I have huge silver maple trees in my yard and they shed A LOT of leaves and helicopters. The less I have to borrow a super tall ladder to clean out gutters, the better.

I wrote her a huge check this week ($2,275!) for the deposit on the work, and will pay her the rest of the amount when she's done with the project. She's going to start May 31st and be done in a month! She's very responsive and easy to work with, so I have strong hopes this will go well and I'll end up with a house that lives up to its potential! Depending on how things go, I plan on inviting her back to take advantage of the floor refinishing deal. I look at the house and get overwhelmed. She looks at the house and gets excited at the work to be done. Between the two of us we'll have this house whipped into shape in no time!

So, all in all, my real estate experience has been mostly positive so far. It's been stressful, but then, what huge change in life isn't stressful? I have no doubt I'll look back on this start and laugh at how stressed I got over the whole thing…… but that probably won't be any time soon.

Any tips for the noob real estate investor? Think I should get a CC and a gun? Got any work on your properties at the moment? Sound off in the comments and let me know!

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49 thoughts on “House Update: 3 Mos

  1. Yikes! Let’s hope you’re the beginning of your neighborhood “turning the corner”. I had a friend who bought on “The Edge” in Atlanta, and had a similar situation to yours. Two years later, it’s one of the hippest neighborhoods near downtown. A bit of a lottery, but it can work out well.

    Good luck, will be interested to see the progress from your bad ass lady contractor!!

    • The thing that’s frustrating to me is, this neighborhood is in almost the exact center of town. Everything is within a 15 minute drive (or, gasp, bikeable!) vs being on the “good side” that means it’s at least a 20 minute drive. I can walk home from the bars downtown if I want to risk it. The architecture is amazing. And yet, people don’t want to live south of the major road because “it’s bad”. No, it’s a little rough, but it’s not “Bad”.

      • I don’t know Gwen… if those really are gunshots the area might deserve a “Bad” category.

        Beautiful house, must have been a great neighborhood at some point.

  2. I love your optimism as you work through several challenging situations! What fun would life be without challenges! Keep up the good work and looking forward to see the outdoor refresh!

    • Thanks Jason! It’s definitely a challenge but it has to get better in the future. I’ll revisit this if it doesn’t!

  3. I’m sort of a 2nd Amendment nut, so take this with a grain of salt… I think you’re smart to get a CC and a gun PROVIDED you take a course in gun fighting. You want to fall back on training in a high pressure situation. If you can’t see yourself putting daylight through an attempted rapist, don’t start down any road that goes there.

    Guns are “fun” in the sense that most shooting consists of perforating paper at the range . There’s something Zenlike about getting all still, holding the sights on the target, then sending the round between heartbeats. My mom was the best shot in our house growing up. My daughter was the best shot when she was living at home.

    If you decide to get a gun, make sure to ask your “sketchy” tenant with the prone-to-violence brother which one to get. It’ll subtly let him know you’re heeled even if you get a completely different weapon.

    • Steve, I was in the military, so I have solid training to fall back on should things get sticky. I like the idea of asking my tenant about weapons just to let him know. Until then, I’ll have to keep my softball bat handy!

  4. Oh nnoooooo I’m so sorry to hear all of that stuff. :((( We used to live in an apartment like that, but I’m sure it’s much more horrifying if you own a house. I guess that explains how affordable the home was. :/ It sounds like you’re handling everything well, though! I mean, I’m from Texas, so I think (almost) everyone should have a firearm for protection in their home, but that choice is yours lol. 😉 Keep your chin up and keep truckin’ on with those goals!!
    Mrs. Picky Pincher recently posted…Should I Eat That?My Profile

    • I’m not quite “Texas” on the level of gun crazy, but I do appreciate they have their time and place to be useful.

  5. Wow, that sounds like a lot to deal with. You sure are learning a lot, and helping others (me) out along the way! Thanks for sharing.

  6. You need to let go of those tenants that are causing you headaches. They are not worth the trouble and the stress. I am always calling the police on my neighbors. They party 3 or 4 times per month. They do this on their front lawn. I guess they want everyone to see how badly they live. They are a bunch of knuckleheads! I would not be surprised if they were dealing. Good luck with your real estate property! Just be careful.

    • I’m very, very careful! In the first 3 months, this is the only time he’s really caused an actual issue (besides the one night I had to ask him to keep his rapping down at midnight). He’s aware he’s on a short leash, so he’s warning his buddies no shenanigans when they’re over.

  7. Do you have a dog? Sometimes a large breed dog can be a great deterrent. Some bars even allow you to bring them with you depending on where you live! Assuming the large dog doesnt have behavior issues (watch out for separation anxiety, overly stranger aggressive, and dog-to-dog aggression), it can be a great addition and companion you can walk or even bike with. (Check with your home insurance about breed restrictions.) Of course, it is a long-term expense, but might provide you some peace of mind. 🙂 Thank you for sharing the good, the bad, and the ugly. Wishing you lots of luck!!!

  8. My rental property has had very few serious problems like this, it’ll be our primary residence that needs this kind of repair work so we’re embarking on the same renovations life around the same time. I wish you could send me your awesome contractor!

    I think it sucks that this is a bit of a rough neighborhood but that’s enough for people to label it as a Bad neighborhood. If more people were willing to make some effort, it wouldn’t be either of those things. But like you, I’m not living the slumlord life either so the investment that you’re making feels as much financially smart as it does morally right. 😉
    Revanche @ A Gai Shan Life recently posted…Just a little (link) love: drunk and Thor’s hammer editionMy Profile

    • It seems like there’s a definite line between financially right and morally right. What makes sense for my finances is to keep everything as boring and plain as possible. Morally right is to fix this house up and make it look beautiful… no matter who tries to destroy it. A lot of this doesn’t necessarily NEED to be done, but I want it to be done because this house deserves it! 🙂

      • I like that philosophy. We should strive to leave the world a better, more beautiful place, even when it doesn’t make financial sense.

  9. I can’t believe it’s been 3 months already, time moves so fast! Sorry to hear that you are having headaches. Always frustrating to find out you picked a neighbourhood that could use some work. Hopefully it’s on its way up. Also, glad you’re supporting local female entrepreneurs (and at such a good price who wouldn’t).

    • I’m hoping more people realize the awesomeness of the “potential” and move in. A few grand houses have already been restored and look amazing! Gotta hang in there though until then.

  10. I’m sorry you didn’t know quite what you were getting into. I would get a concealed carry permit and a small handgun you can carry in a fanny pack when cycling and in a pocket holster when driving. A small 380 automatic is light and easy to carry but very powerful if ever needed. Of course as an earlier commenter indicated you need to be trained. Guys like me that grew up shooting and have been on both ends of the barrel have no doubt of their resolve and ability to use deadly force to protect their loved ones and themselves but I realize there are people who lack the emotional capability to defend themselves. However being armed is not really that much protection if you are on a bike. If someone targets you they will just knock you over and it is unlikely you could crash, recover and pull your handgun in time to defend yourself, unless you landed pretty softly, something I’ve never pulled off on a bicycle! But you can certainly defend your home against invasion pretty easily by owning a shotgun or a handgun. If you are just going to use it for home defense I’d get a 9mm or larger handgun. Harder to conceal but much better at stopping an aggressor. But the chances of ever using a gun are fortunately very very slim. You have bigger problems to deal with than being a victim of violence in that neighborhood.

    • Yeah I’m not too worried about the training aspects. I’m a good shot, and the military taught me to keep my cool under duress. My family is also very pro-gun so I’m familiar with them and comfortable about using one if need be.

  11. This sounds like a challenge and something to sink your teeth into. Just make sure you’re careful and smart, which I’m sure you are.

    You know what they say, if it was easy everyone would do it. So, keep at it, and you should see the fruits of your labor return.

  12. I have 2 roommates and sometimes have to deal with this – luckily they are mostly reasonable the biggest qualm I have is that they never clean up after themselves…

    I have 1 roommate who will smoke from time to time and the house smells for a while, and he also will go out most nights and make a lot of noise when he comes home. I’ve gone back and forth on kicking him out, but I’m probably going to have him go through his lease.

    Is there anyway you can kick them out through the lease agreement?
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    • Funnily enough, he doesn’t have a lease. He’s on a month to month basis. The previous owner didn’t have either of them sign a lease past the first year, just kept collecting the rent. So, theoretically, getting him out of there would be as easy as writing him a letter telling him he has 30-45 days to move.

  13. Wow! We had problem tenants too, but at least we didn’t live there, so we only had to hear about it! We used a “cash for keys” strategy to get them out. We strictly vet our tenants, but this couple squeaked through because other, better prospects took two weeks to decide they didn’t actually want the place and we were desperate to get the cash flow going again. Won’t make that mistake again.

    Our rental isn’t in a really bad neighborhood, but those are nearby. It is blue collar and ours is probably the nicest house on the block. But yeah, the town has a reputation, which it hasn’t not really earned. Keep the house in good shape, but be careful, because those bills can add up quick!
    Norm recently posted…Is Vanguard Getting Too Big?My Profile

    • If he was just smoking it, that would be one thing. But I’m fairly sure he’s doing more than just smoking, which makes me incredibly uncomfortable. I am strongly considering going the cash for keys route! It’s a great way to avoid having to go through the legal system.

  14. Besides living in LA and the terrible housing market that we have, not knowing who your neighbors really are is just another reason that Team Waffles is not on the real estate boat. You are a better person for putting up with this. I felt my anxiety and stress level rise just reading your post.
    Mrs.Wow recently posted…Going For a Bike Ride- Part 3My Profile

    • Yeah my blood pressure is steadily inching higher! Maybe I need to look into yoga or meditation…

  15. Well if you get a gun, I recommend getting some sort of training. And then don’t tell the interwebs about it 🙂 Whatever you choose, I am sure you’ll do fine.

    Hang in there and stay safe!!

    • Thanks Kevin. I already have a lot of training through the military so I’m not worried about that aspect. I went shooting in February with an instructor friend and he told me I had nothing to worry about aim wise.

  16. Keep persevering, Gwen! You were smart to save additional money beyond your down payment to be able to curb some of the additional expenses you’ve had pop up. Our basement flooded three weeks ago, needless to say, that was unexpected and it brought a few expenses too. Like you, we earmarked a bit of money for house expenses when we bought back in January that helped cover the costs we incurred.

    Cheers!

    • Thanks Taylor! I am definitely counting my blessings among all of this mess. Sorry to hear about your basement flooding! That can get pricey quick…. especially if you have stuff stored down there.

  17. The other thing you may wish to do if your area isn’t as safe as you would like would be to sign up for martial arts or boxing classes. I’m in Canada but generally speaking our laws surrounding self-defense are likely similar in that using a firearm in self-defense may not always be legally justified. It is nice to have a ‘middle of the road’ option somewhere in between being more or less defenseless and putting someone in the hospital or 6 feet under. Plus you will in all likelihood have the added bonus of increased fitness and energy and meeting some potentially cool new people. You may even find (as I did) that you truly love it and it is a life-changing experience.

    As for the rental, finding someone good who you can trust to do good work and treat you fairly on the price is a godsend and will make your life as a landlord far easier. Hopefully things with badass lady contractor work out this way! Not sure what the demographics are in your area but I really prefer older tenants – not nearly as much partying/damage. You are doing great so far though, way ahead of the game compared to most at your age!

    • I like the idea of martial arts. I have very limited self defense training from the military, but that really only comes in handy when I have to defend my honor……. not when I need to break up a fight between two fit, strong, young guys!

      Demographics for the neighborhood vary, but mostly err to the side of younger couples and families. There are a few older people in the neighborhood…….. but even they have their kids/grandkids living with them.

  18. Sorry to hear of the problems with the tenants, Gwen. Hopefully things settle down after the warning.

    I thought the 17k bid was high, but 61k?!!! Wow! We’re getting ready to close on our first property next week (hopefully). We’ve got our work cut out for us. Right now we’re pretty excited about it…but we’ll see how we feel about it once we’re in the trenches.

    • And by trenches you mean dealing with the leftovers of a 30 year hoarder tenant. Let me know if you end up closing on time and need some help cleaning everything out!

  19. Yesss badass lady contractor! You’ll have to Yelp review (Angie’s list?) the crap out of her once done. I hope your crazy tenant and associates clean up their act so you can sleep in peace! I second the big dog recommendation but want to add that the extra responsibility, limitations around travel and cost are important considerations. Also, young dogs often need to be let outside to pee at night which poses an unexpected safety risk.
    Millennial Boss recently posted…Feature Friday: Paying Off Student Loans with Bald ThoughtsMy Profile

    • I would love to have a big dog, but my apartment is barely big enough for me and the cat! Definitely no room for a big dog. I barely even have a yard 🙁

  20. Best of luck! Congratulations on your intestinal fortitude. I am simply a weaker human. Buying housing that cheaply is ALWAYS going to come with a host of problems. Always. Sadly, poorer areas just tend to have these kinds of issues. You can make a ton of money with poorer tenants and Section 8, but it comes at a price. TAANSTAFL (to paraphrase- no such thing as a free lunch). Personally, it wouldn’t be worth the stress to me, especially as you are in a part of the country that’s fairly depressed and unlikely to really gentrify (no major industry, no major universities, no mountains, no oceans).

    If it’s causing you teeth-grinding and stress, have you considered bailing? This house may be more of a money pit than you realize. Even with the 1% rule, it may not be worth it with trashy tenants and major bills piling up.

    • I’m not ready to bail quite yet. I think things will get significantly better once I fix everything up (or at least just deal with regular on going maintenance issues as opposed to EVERYTHING NEEDS FIXED NOW) and once I don’t live here. I’m giving it a year living in the unit, and 2 more years not living in the place after that. I think it will be better under a property management company so I don’t have to deal with all the day to day stress.

  21. Glad to hear you are enjoying it – well, you’re last paragraph you said home ownership is going well, but the opening paragraphs paint a different picture 🙂 Definitely need to let those dodgy tenants go ASAP. Better to miss a few weeks rent than to be carrying people who are going to do expensive damage to the property.

    Hopefully I’m just hearing they’re worse than they actually are – but if you’re calling the cops and dealing with damage to the property, kick em to the curb. Politely
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  22. Sounds like an adventure, that’s for sure.

    We used to live in an “up and coming” neighborhood. Lots of day drinking going on. Check cashing places on every corner. Some rough houses mixed in with nice ones. People in the parks having a good time at 10am. But for the most part people were harmless.

    Things changed a lot over the 7 years we lived there. Hopefully it’s the same for you!
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  23. Kind of makes me thing of that saying where the more things you have in your life the more stress you have. Granted I feel like regardless of the outcome you are going to learn so much from this experience and financially profit from it, so I admire what you are doing. Just chalk the bad stuff up to lessons learned for the future;)

    • Kinda like your stuff owns you? I think I’ve got a decent amount of stuff (especially after paring down so harshly earlier this year). I just lack storage options for it!

  24. 30+ years ago we bought a run-down, empty-for-2yrs-house in a country neighborhood with a bad rep. Lots of weird fires over the years and occasional gunshots. But the house was big and cheap and the property terrific with lots of potential. We’ve been fixing it up ever since and we love it!! The firebugs eventually moved (lost their houses to repo…..and fire! They were all related.) The shooters are target practicing on their own property, and while I don’t like it, it’s legal. Over the years the neighborhood has improved dramatically, if slowly, and we’re very happy here. Having some ragtag neighbors made our place look like a magazine cover, and now other houses are improving.

    Gwen, you might be helping the neighborhood pick itself up. Your house looking good might inspire another to do a little something, then a little more. It can happen!!!

  25. Saw your comment on 1500days, Carl always writes entertaining content. Always happy to see more Millennials waking up to money management and early retirement. I’m only a few years ahead of you, you’ll find savings and money start to flow faster and faster as you go. Makes me think I’m on a good path.
    I haven’t gone into real estate investing or becoming a land lord, but the thought has crossed my mind many times. I think every time I’ve looked at houses to rent, they always look like they need to be gutted to me before I can rent them out. I’ll be very curious about your results. I bought a small house a few years ago in small town, for the moment just enjoying the slow ride to early retirement, probably as soon as 8 years away at this rate. Now that I think about it, that’s fast to most people. Thinking about what financial move I’ll make next in the mean time, like starting a brewery. I’m currently redoing my lower level of the home, doing DIY as much as possible so I can throw as much cash as I can into investments. My only advice is to remember there’s usually a quick, easy to install, and cost effective way to do most home improvement jobs. Pex is great for plumbing if allowed. I try to get people with a lot of experience to help me so I may learn from them.
    I would get a conceal carry if you know it’s not a great area. I’m actually planning on buying a handgun just for home defense, as I live alone on a busy highway.

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