While our tenants were moving into our previous home, a 4 year old, 2100 square foot, beautiful new-ish colonial, we were moving into our new house, a complete cluster of a renovation project, and not lying; I sort of wanted to vomit. Walking in the front door wasn’t too terrible at first glance. A newly opened floor plan revealed the fresh hardwood floor sprawling from the living room space into the kitchen, and about three-quarters of the kitchen cabinets were installed. Only the office workspace cabinets still needed to be installed, mainly because we found the pantry cabinet came in damaged and it’s location in the kitchen meant that the adjoining workspace had to wait. So the workspace cabinets were just set in place where they should be installed, next to the broken pantry… and there were no countertops… or stove… or dishwasher… or kitchen sink… or closet doors… or trim on most of the interior doors… and massive ceiling patches and drywall seams on the walls hadn’t been finished or painted. But, we had a new floor and most of our new cabinets!

As our friends helped us unpack the truck, the unfinished basement came in handy since we could stack our boxed belongings in rows down there. Not that we originally planned for the space to be unfinished, but the mess from prior residents (mice) forced us to gut and sanitize the basement before we could move in, and we didn’t have time for finishing since we hadn’t planned on a drop ceiling full of urine and mouse droppings. Even though we only had about half of our previous house’s living space to work with between the main level and upstairs, we would have to make it work. So we piled the boxes in the basement from floor to ceiling in rows so we could navigate in between them. Even after boxes labeled kitchen and living room got piled in the main level, bedroom boxes went to the appropriate bedrooms, and the bathroom boxes went to the bathroom, our basement was still packed with boxes! This was going to be a problem. We got our bed and the kids’ beds in place, and my wife focused on getting their bedrooms in a reasonable order ASAP. After some beer and pizza payment for our working crew, it was time to call it a night. The next day would remind us of how much our current living situation sucked.

Once I woke up, yeah, I wanted coffee. Find the coffee pot and plug it in… shit! Where do I put the coffee pot?! We have no countertops! I dug around in our sunroom, and thankfully, we had a couple pieces of 1/2” plywood left over from construction. I dug the tools out of the basement, cut the plywood down to 2-feet wide, and laid the pieces on the kitchen island and cabinets. Yay, countertop! Now I needed water for coffee… trek upstairs to the left bathroom sink (designated as our kitchen sink as opposed to the right bathroom sink, which was right next to the toilet) and fill the pot with tap water. Find the grinder and coffee beans… Yay, coffee! Since we had countertops now, I had a spot for a coffee pot and could get the toaster oven and microwave off the floor. Yay, kitchen! Every tiny step felt like a victory, which we desperately needed, especially when every meal we cooked over the coming weeks ended with a trip to the bathroom to wash the dishes! Yeah, we used a lot of paper products and ate out more than usual to avoid washing dishes in the bathroom, but there’s no easy disposable option for pots and pans.

With the kids’ bedrooms in a reasonable order, during the next couple days we focused on getting a stove and setting up our living room so we could cook food and have a place to relax and watch TV. Not that we would have time to use the TV anytime soon, but we wanted to create some semblance of order and normalcy for the kids as soon as we could. Despite the boxes piled along the kitchen wall and filling our basement, at least they could chill out with some Mickey Mouse Clubhouse and go to their rooms to play with toys. Of course the little bit of floor space we had in our makeshift living room soon started filling with their toys, but we made do; so long as they were happy, we were okay with whatever. Except, they weren’t exactly happy with the new arrangement. While our son hadn’t reached his first birthday and was fairly oblivious to the renovation project, our daughter, who was 3 1/2 years old, developed a habit of biting her nails and a worried expression regularly showed up on her face. Not that I needed more motivation to giddy-up on getting the work done, but her reaction to our change in living conditions gave me an extra boot in the ass.

Moving in at the end of July, the initial plan was to host my son’s first birthday party at our new house, but given the conditions, we were in no position to house a party with 1 person, better yet the 20 or 30 we would want to invite. So, a few weeks after moving in, we would host his first birthday at Chuck E. Cheese. Of course, he was absolutely terrified of a cartoon-ish mouse that was larger than his dad. Who the hell comes up with these cracked-out ideas anyway? Isn’t it obvious that a small person in a small costume would be less intimidating to little kids? Things like this and their crappy pizza may be why their business isn’t going so great, but I digress…

During the first few months in our house, we would spend most nights and weekends scraping old caulk and paint chunks from the walls, repairing cracks, sanding, and painting drywall in the main level; cutting, caulking, and painting baseboard and door trim throughout the house, and unpacking boxes from the basement. It took a bit over two months, but we finally got our kitchen in order. Most of the delay was waiting on the replacement pantry cabinet to come in, but during the wait we realized we could install the broken cabinet with the cracked edge against the wall, and the damage would be completely hidden. With that, we planned to install the replacement cabinet at the other end of our office workspace to create a nice bookend effect. But… we couldn’t order countertops until the new cabinets were in, couldn’t install a sink without a countertop, and couldn’t install a dishwasher without a sink drain to connect to. It was the most amazing feeling when the vicious cycle of delays ended in early October, and we switched from a cabin-like kitchen to one with modern granite, stainless steel appliances, and a working kitchen sink and faucet! Woohoo… luxury!

By December, we had cleared out enough of the boxes from the basement that we could start constructing our family room. While we had visions of the basement becoming a finished family room to house our Christmas tree, that was not to be in our first year. Most of December was spent insulating and installing drywall in the basement. Post-Christmas, it was on to finishing the drywall seams and painting the basement. Then, on February 1, 2010, our new carpet was installed. Much like the eureka moment that hit in October when the new countertops and appliances were installed in the kitchen, the carpet in the basement was the cat’s meow! That pulled it all together, and in this moment it seemed our mess of a renovation project became our home.

Through the Spring of 2010, we took on a few small projects like a new outlet here and there, replacing some older trim, and touching up drywall seams and paint. As summer approached, we added a playset to the yard for the kids and focused on cleaning out the pool and repairing its plumbing. The disgusting mess that you see on the main image for “Finding Our Fixer-Upper” (https://fthattreadmill.com/2021/05/29/finding-our-fixer-upper/) slowly transformed to a bright, clean, sparkling pool. A previous owner had jerry-rigged a suction line for the pump, presumably after they decided to dump sand into the strainer box of the return line. I guess they had heard of sand filters and figured the filter needed more sand. Except this pool had a DE (diatomaceous earth) filter, not a sand filter, as evidenced by the huge lettering on the outside of the filter (flatten hand and smack forehead as hard as possible). I used the pool leaf net to scoop out beer cans, bags of shock, tree branches, shoes, pool toys, and leaves… lots and lots of leaves, weeknights and weekends, leaves, leaves, leaves. It seemed like the entire pool was filled with leaves in various states of decay and buoyancy, and it reeked of swamp. Thankfully, a couple months of scooping, about 40 bags of shock, and a hundred gallons or so of bleach later, we were amazed to find the pool in relatively good condition. There were some stains on the liner that would remain, but that was alright, because we had a usable pool only a year after we moved in!

During the Autumn and Winter of 2010, we finally took some time to relax a little. We’d sprinkle in a small project here and there, but after a year of non-stop work, we wanted to enjoy time as a family, doing family things. Between having a newly renovated kitchen and family room indoors, a nice pool with a huge deck that had awesome views plus a great hill for sledding outdoors, we finally were beginning to enjoy our new place. Admittedly, the outside still looked rough with paint starting to peel off the original asbestos siding, a roof with obvious patching on the back side of the house, a rusted galvanized fence, and a failing retaining wall; but we could look over that knowing all the hard work that we would have to do ourselves was mostly done!

But now what? The whole point of this move and renovation project was to build equity, reduce debt and expenses, and get me closer to work; all of which were accomplished. Oh yeah! I’m supposed to be looking for rental properties to build wealth and get out of the rat race! Damn… I just spent most of our cash on renovations. How would I buy rentals now?

By early 2011, I had opened conversations with my mortgage broker about buying rentals, to figure out what we could afford and how much of a down payment we needed. Following the mortgage crisis of 2008/09, banks weren’t very open to loaning money for investment properties with little money down. My broker explained this was a source for the banks’ problems during the crash; a lot of rental properties were bought with little or no money down, and when the values tumbled, the investors could walk away, leaving the mortgage companies holding the bag. The changes meant I would need at least 20-25% down plus my interest rate would be a couple percent higher than a regular mortgage. I guess I better start saving!

Once again, Rich Dad, Poor Dad had some advice. One of his creative financing techniques was to use equity in your own house to buy investment properties through a home equity line of credit (HELOC). I thought this was great for our situation since we had done so much work to the house. Surely I could get a HELOC to give me the $50k or so down money we needed. After checking rates with a few banks, in late Spring, we applied for and received approval on a HELOC. We were then introduced to another unfortunate effect of the mortgage crisis; appraisers and lenders were being very conservative (estimating very low) when calculating the value of your house. So even though we showed them multiple properties that sold for much more in our area than what they said our house was worth, after accounting for our mortgage, we were offered a HELOC for a whopping $21k (that’s sarcasm). Yeah… that’s not gonna work. I mean, maybe we could have bought a single row home in a sketchy area for $80k, but not much else.

Back to square 1. I had better start saving.