Category Archives: Financial Freedom

Modifying the Plan

Our plan has changed since we made the decision to look for a house. I’m not certain how much of this I’ve written about here, so please forgive me if I’m repeating stuff or if some of this detail didn’t show up in earlier posts.

At first we wanted a place with some land so we could have a big garden and room to do the things we wanted. That is, we were looking for our ideal homestead property. While that end goal hasn’t changed, we decided instead to look for a house we would be able to live in for a while, near to where we wanted to have rental properties.

That is what we found, but then we gave serious consideration to how we would be able to fix it from afar, which we realized we really couldn’t do. I wanted to go stay in the house even without electricity and water, but that was vetoed. I guess that’s probably a good thing. So instead we decided to find an apartment in the area.

The obvious benefit of having an apartment in the area is proximity, but there were some negatives too. For one, we would have to pay rent. Of course, for Donna to work we’d need a place with electricity and water, and not a construction zone, so we’d need to do that regardless.

Another benefit we discovered was that we could rent a 3 bedroom apartment for much less (almost half) what we were paying for the 2 bedroom house in NJ. However, to get that rate we had to sign a 13 month lease. Shorter leases, where available, meant higher rent.

We weighed these pros and cons and decided it was worth it to get the apartment. The place we chose we could buy out our lease by paying one additional month after we move out, which seems to be a small price to pay.

So we moved to Georgia, which was interesting. (If you’re interested, you can read about it in these two posts about the reasons we moved ourselves and the fun moving was. :-)) Since moving, we have been trying to decide if we want to go through with moving into the place we purchased, to save on rent as we originally intended, or to rent it out and let that income cover some of our rent.

We are also considering a radical change in which we get a small mortgage and purchase a house closer to the area in Atlanta where most of the jobs seem to be. If we can keep the mortgage payments lower than our current rent, I can see where this could make good sense.

At this point I would very much love to have a crystal ball that could show me the outcome of these decisions. It’s not that I don’t want to take the risk on one or another, nor is it that I don’t trust my judgment. What it comes down to is that, while I can put together a projection of the future based on any of the choices, it’s difficult to tell which one will help us get to our goal most quickly.

I realize that sounds impatient, but I’m very anxious to make this work. I don’t want to move away from the plan unless it is reasonable to expect the change to work better than the original plan, or to have some other benefit that outweighs staying the course. I guess we’ll just have to keep moving forward and when decision time comes hope we go the right way.

Making the Decision to Move

So, we’ve decided to get an apartment and make the move to Georgia. We definitely feel like being closer will give us the opportunity to work on the house and better supervise the contractors we bring in to do work, which is a primary driver for this.

It doesn’t hurt, however, that we’re looking at rent that is just over half what we are paying in NJ. We haven’t seen the apartment yet, but the pictures we’ve seen and reviews we read make us feel comfortable enough to make the move sight unseen. It is supposed to be available on the 15th of May, but we’re hoping they can get it ready for us a bit earlier.

Unfortunately, we will need to be out of our house by the end of April, which leaves us a couple of weeks wherein we will be wandering. Our plan is to stay at a hotel in Georgia for about a week and put our stuff into a storage unit near the apartment.

The weekend after that we are going to drive the rest of the way down to Tampa, FL, to stay with relatives until the apartment is ready. When it’s ready, I will drive back up and get our stuff moved from storage into the apartment. The following weekend, Donna will fly up to join me.

The new apartment is in LaGrange, GA, which is about 10-15 minutes further from Atlanta, but it is a quaint little town that I think we’re both going to enjoy. To be perfectly honest, though, I’m not really looking forward to the move.

We have so much stuff we’re taking, and so much stuff here still to get rid of, that I’m not sure we’ll be ready in time. I know we’ll have to, it just isn’t one of my favorite activities.

Our First Property Purchase

So, on the 11th we closed on our first property. We were able to quickly pull together the cash we needed, which I wasn’t sure we’d have enough time to do considering the speed at which this went forward, but we pulled it off. It actually felt like everything just fell into place, which was amazing. We now own a house without a mortgage. That’s a great first step.

I went down to Georgia for the closing and spent a few days walking contractors through the house to get estimates on the plumbing, roof, AC, and electric work that needs to be done. We’re using that to put together a budget, and trying to figure out how long it’s going to take us to be able to get the work done.

Because of the amount of work this house will require before we move in, we are thinking we should probably move into the area sooner rather than later. It would make sense to do so, in order to be close enough to do some of the work ourselves, to be able to supervise contractors, and to make it easier for me in my job search. My feeling is we probably will, but we need to hash it out first.

 

We’re Buying a House!

We made the decision, and late in the day on the 21st we made the offer, which much to our surprise was accepted that night. We’re both scared and excited. But everything seems to have come together for us on this, so we made the offer, and it was accepted. The closing is going to happen quickly – it’s agreed that we will close before the 14th of March.

The house is in Hogansville, GA, which is about 45 minutes southwest of the Atlanta airport. Based on the criteria we were using which I described earlier in the post about making the decision to buy, we quickly narrowed it down to the Atlanta area. Working through listings and neighborhoods, we found most of the ones in our price range and close to the city were in more crime-ridden areas, so we kept expanding the radius, which led us to find this one.

It needs a bit more work than we were hoping, but it is a good buy at the price. One of the things we noted as we looked through what was available was that we would have to lower our expectations somewhat when it came to houses in the range we were considering. It actually isn’t too far below my expectations, and in reality it’s much better than I originally expected we’d find before Donna started showing me what she was finding.

The air conditioner is missing, probably removed by the previous owner before the foreclosure. Whoever it was, it was definitely an inside job because the thermostat and associate wiring were taken as well.

It also needs a new roof, some electrical work, and plumbing, along with a whole lot of cosmetic work. The electrical could be dangerous, so we need that fixed before we can turn the power on, which we’ll need to do before we have a new air conditioner installed.

There are only two plumbing issues that need immediate attention – the hot water heater is not connected, and there is a burst pipe in the master bathroom. There are other, more minor issues, which we should be able to address over time.

The most important thing I’ll need to do while I’m there after the closing is to meet with various contractors to get some prices for the needed work. Once we have that, we can put together a budget and schedule for getting it ready.

It’s difficult sometimes to differentiate the fear from the excitement. We’re committed now, and we’re very serious about making it happen. We are also considering if it would make sense to move down to the area while we are fixing it up so that we can do some of the work ourselves and can more easily supervise the work contractors are doing. We’ll have to see where that goes.

Decision to Purchase Property

We recently took a vacation to Florida to visit relatives and take our first cruise. We had a great time, and the chance to step away from our day-to-day and bounce ideas off of people provided us with some clarity on what we wanted to do.

However, when we returned, our circumstances had unexpectedly changed. It seems my company had a new vision for the future, which unfortunately didn’t include me. I was very surprised, but in hindsight I should have seen it coming. Rather than view this as a roadblock, we decided to view it as an opportunity.

We decided that it was a great chance to find a property that we can afford to buy in cash while I have some time to fix it up as much as necessary so that we can move in. This will mean we have no mortgage or rent payment to make, freeing up a significant portion of our soon to be reduced monthly income.

I got a severance package, so we want to take as much advantage of that as we can and use the time while I’m still receiving a paycheck to get the house and start renovations. As the date of the last paycheck approaches, I’ll have to start looking for a job. Hopefully the house would be ready by then so I can go to work and we can start saving for our next property, which will be for a rental.

There is so much that is going into this it is overwhelming. We are working to find a location that will work for us. Some of our criteria include low crime rate, good or at least improving local economy, and availability of low priced houses. We are partial to areas in the Southeastern states, but that’s not a necessity.

This has led us to narrow the search down to a few places. We have not yet ruled out some areas of Ohio, though restrictive local laws and cold winters are definitely negatives there, though the apparent good condition of houses in our price range is appealing. The areas we are considering in Tennessee seem much less restrictive, and of course the winters are not as cold. Additionally, the economy in these areas seems to be improving, and we are finding a good number of available houses, though not in as good apparent condition.

We also have our eye on a few cities in Florida, but the economy and availability of houses in our price range do not work in that state’s favor. Another option is Georgia, which has a strong economy in the Atlanta area and a good selection of houses in our range which seem to be somewhere between the houses in Ohio and those in Tennessee in regards to their apparent condition. Both of these states are more restrictive than Tennessee with regards to building codes and permits.

It’s not going to be an easy decision. For one thing, we are making some assumptions about condition based on the available description, pictures and what we can see on Google’s Street View. We’ve decided that we’re going to look for a few properties in one of these areas, and then set up with an agent to go see them. I’ll have to drive to the area and try to see as much as I can in a very limited time, and we’ll try to make a decision based on that. It’s going to be tough since Donna won’t be able to see the house, but we’ll figure it out somehow.