Back in the Rehab Game!

Ten years ago our country faced the brink of what is now known as The Great Recession.  In retrospect I was obscenely blessed during that time: I did not lose my house and my income was not affected thanks to an abundance of clients who were largely insulated from the economic downturn.   or, if they were affected, it was not so great that they could not still afford to send little Suzie to piano lessons with yours truly.  Unfortunately, many were saddled with astronomical mortgage payments, plummeting property values, salary decreases and/or job loss: times were tough and spirits were grim.

It was during this time that I met Mr. B., a man who would become both my personal partner as well as my business partner in real estate.  I was in my mid-20's and knew very little (read: nothing!) about investing, save for what I had learned from Robert Kiyosaki's seminal work, "Rich Dad, Poor Dad", and Dean Graziozi's, "Be A Real Estate Millionaire".  I was convinced, and still am, that real estate is the best way to create passive income that will withstand any economy. However, believing that is one thing: learning how to make it happen for yourself, and then actually going out and doing it, is an entirely different story!

Mr. B. and I attended Nouveau Riche University in Phoenix, Arizona.  Yes, we paid $8,000 a piece to go to their real estate investor college; yes, we learned a lot; no, we did not engage in any illegal real estate transactions. I got a lot out of the education even though, in retrospect, I could have learned what I did for considerably less.  Still,  unlike many of our classmates we actually put the information we gained to use and, through some trial and error, a lot of hard work, and a little luck, we managed to flip six properties and make money on all but one.  Shortly after the sale of our last property my personal relationship with Mr. B. ended and with that our business partnership.  I continued to teach music as my main source of income and thought longingly of investing again but felt uncertain how to proceed with little capital and no partner.

Fast forward nearly ten years to today:  I am still teaching music but have also obtained my mortgage license and have been working as a loan officer with a mortgage brokerage for two years.  I am infinitely more informed on the economy, financial markets, and investing strategies than I was ten years ago, yet I still do not know how to hang dry wall or operate a nail gun.  I started updating my condo three years ago, thanks to some clearanced porcelain tile I found at Home Depot and a handy friend who owns (and knows how to operate!) a wet saw.   Changing the foyer tile turned into tearing out the staircase carpet, installing a hard wood floor and oak stairs, re-tiling the kitchen and bath, painting the main room...and then I ran out of money! No, seriously, all that stuff is expensive if you don't know how to do it yourself!  Eventually I'll put in granite counter tops, update the appliances and finish the laundry room, and by then it will probably be time to start all over: the cyclic joys of home ownership endure! Maybe it was the smell of freshly cut wood or maybe it was turning a dated, stale, living space into new and pretty sanctuary, but I felt the flipping bug more strongly than ever so I started keeping an eye out for opportunities.  

We humans have a nifty device in our brains called the reticular activating system or RAS for short: think of it as a factory installed app for your mind!  We are continuously inundated with data from the outside world and the RAS helps sort for the pertinent pieces we need.  If you buy a new silver sedan and suddenly notice that many other silver sedans are on the road that's your RAS kicking in!  Pretty cool huh?  The wonderful thing about your RAS is that you don't have to do anything to make it work except set your intention: once your intention is set your subconscious goes to work sorting for what you want.

With my intention set on getting back into real estate investing and finding a potential property, I went about my life during the summer of 2016.  You can preach at me all you want about being more pro-active and I won't argue: I probably could have been more efficient, but that's not my way and besides, I lead a very fun life and didn't want to interrupt it with too much work.

One glorious Sunday morning in September the love of my life, Mr. A, and I decided to blow off church, as we are wont to do in fine-weather, to explore a new park and its surrounding neighborhood.  While traipsing somewhat aimlessly down a tree-lined, dead-end road we happened upon a perfectly beautiful, out-dated dump of a house with a For Sale sign in the yard.  This house was the last ugly duckling on a street where every other house had been turned into a beautiful swan McMansion: "this has "deal" potential!", I thought.

I already had in mind, as a potential new partner, a friend from childhood who had been a complete jackass at age 11 but, surprisingly, evolved into a savvy, competent Realtor.  Max holds several rental properties and has successfully flipped a number of others. He's personable, doesn't live with his parents, and knows how to fix stuff: what more could I ask for?  A few days later I met Max at the ugly-duckling-house to assess its viability.  Unfortunately, after seeing the inside and asking price, I realized it was a non-starter.  However, Max was interested in investing together since I had a capital source and he couldn't get a bank to issue him another mortgage: apparently the 10 loans already in his name made them nervous despite that they are cash-flowing properties in good standing. The banking system that most people have to deal with in order to get a mortgage is for peasants: it's rigged against us but that is a rant for another post.

Max liked the idea of partnering and, in anticipation of a good property coming up eventually, we set a meeting with friends, Jim and Liz, who had been hard money lenders on deals I did during the Recession.  We met with Liz at a Starbucks on a Thursday morning in late October.  We sat outside as it was unseasonably warm for Chicago: the Cubs were heading towards their first world series win in 108 years and a flock of migrating white pelicans flew past us heading south for the winter, both of which I took to be signs that I was heading in the right direction.  We went over the lending terms* with Liz and she agreed to send us their application, start the vetting process, and basically get everything set up so that when we found a property we would be able to close quickly.  

*I will share the terms with you in another post along with the questions we asked: you know, in case you're thinking you'd like to take a crack at this some day.

Max was heading to Europe on a trip with his wifey the week after our meeting and, shortly after he returned, cold weather set in, the Cubs won the World Series, and I don't know what happened to the pelicans: I'm assuming they were partying in the Keys, celebrating the Cub's victory like the rest of the free world.   December ushered everyone into a 4-week holiday fervor that carried all on a tidal wave of activity, spending, and calorie-consuming, culminating in a drunken-stupor of shrunken bank accounts and stretched waistlines come January 1st.  I touched base with Max sometime in the new year: it was still cold and snowy so it could have been January or March: it's hard to say.  Yes, we still wanted to do a deal but no, neither of us had found anything.  To be fair, Max was the only one doing any searching since he had access to the MLS and I had a fun life (remember? not too much work!)  Besides, winter in Chicago is very cold and it's dark around 18 hours a day which makes it hard to visit properties let alone muster any optimism about turning any of them into a swan.

Fast forward to spring of 2017: we finally had a contender!  A little two bedroom, two bath frame house, located across the street from an elementary school was sort of on the market.  I say, "sort of" because while the property wasn't listed on the MLS with a Realtor it had been in foreclosure for 10 years and foreclosure listings are a matter of public record. I actually don't know how the previous owner managed to stay in the house that long.  Supposedly he fell behind on his payments when his wife sustained a work injury: she lost her mobility, followed by her job, and they fell behind on their bills.  They negotiated a loan modification with the bank but then didn't make payments on that loan either. They perpetuated a similar cycle for 10 years!  TEN YEARS!  Do you know how much money I could save if I didn't make a mortgage payment for 10 years?!  The mind boggles.  Anyway, I don't recommend trying this tactic: it's not good for your credit score...

In addition to being in foreclosure the owners were smokers, hoarders, dog owners, and had an apparent aversion to cleaning or opening windows to let in fresh air.  All this adds up to a disgusting house that I couldn't stand to visit, let alone live in, but as a flipper all the filth was singing, "we're in the money!".
Side bar: when visiting potential properties don't look at the surfaces that are easy to clean, paint, and update.  Look for the filthiest, darkest, most spider-filled, cover in s!@# corner you can find and ask yourself if you're willing to get down on your hands and knees and clean/paint/gut that instead of hanging out with friends on a beautiful Saturday: if the answer is, "hell no!" then please proceed to the next career option: flipping is not for you!  If, however, the answer is, "Yes! That sounds fun!" then collect your tools and proceed to the closing table.  Personally, I'm willing to clean or touch just about anything so long as I have protective gloves.

When a property is in foreclosure anyone can make an offer to the bank who holds the note (i.e. the mortgage) to purchase it for whatever one thinks its worth.  Whether or not the bank accepts is another story but you can still make an offer, which is what I/we did.  Since this blog is intended to be educational as well as entertaining, I'll share the numbers.  After viewing the property with Max and looking at comps (comparable sales of similar properties nearby) we figured it would cost about $10-15k to do a bare-bones flip: paint, carpet, patch some holes, update the fixtures, and manicure the yard. We figured we could sell it for about $200k: maybe a little less, possibly a little more, but $200k erred on the conservative side.  $200k less $15k in repairs, less $5k in loan costs, then build in about $10k each in profits with a $5k cushion for just-in-case, and we arrived at a price we thought the bank would accept: $150k: to our delight, they accepted!

Our offer was accepted in May but we did not close until September: just one month short of a year from the first meeting with Max at the ugly-duckling-house! As I mentioned earlier, the owner had managed to stay in the house 10 years without making a single payment so he was quite surprised to learn the bank was selling his property!  Not only was he reluctant to leave, which would necessitate living somewhere that required a monthly payment, but he had quite a lot of junk to either throw out or move and store (hoarder, remember?).  He dug in his heels, bled the excuse and pity well dry, and managed to eek out two extensions from the bank in hopes that I would give up.  He even inquired, via his Realtor, if I would let him stay in the house and rent to him! Ha!  After the tears of laughter subsided I told the Realtor there was no way in hell I would allow that.  

The closing finally took place on September 7th, 2017 and now the fun part starts! Stay tuned!

The rain, Godiva coffee and a biscotti. Life doesn't get much better than curled up on a couch with these things on a chilly August afternoon. Chicago, renowned for its formidable winters and sultry summers, has been uncharacteristically cool and dry this year. The bizarre weather seems fitting given that everything else in life these days is also bizarre. I distinctly remember being 24 and having a very different idea of how life would be in a few years. It is with bittersweet longing that I remember being a single, hot blond who danced 5 nights a week, had a perfectly happy family life and wasn't particularly concerned with where I'd be in 5 years.

Intermission comment: watching "The Notebook" for the first time; there are a lot of ducks in that boating scene. How'd they choreograph them let alone get 'em to stay put?

Surly: adj
"unfriendly or hostile; menacingly irritable"

What a great word. A perfect way to describe the emotional melee of 3 years later. My best friend, truly, my sister, for whom I would have fallen on a sword for many times over, married, technically eloped would be the accurate word, my ex and is now bearing his second child as their first one, sadly, miscarried a year ago. I am the Suez canal between the warring countries of my parents and team sis 'n ex.

Fortunately I have the distractions of starting a new business, running the old one and haphazardly navigating the complications of a new relationship. LC once told me that the end of her 20's was a great blessing and that she wouldn't return to them for anything. The 20's, she said, are the time to learn who you are and figure out a lot of things the hard way. I used to think she was crazy, that to leave my 20's would be to leave youth, spontaneity and the best part of life. But now, with 3 years still left, I see exactly what she meant and will not be sorry to see them go in the least.

This move is not getting better....Alzheimer's. The pain of watching someone you love still live and slip away from you at the same time? This better have a happy ending.

En Ville

Well friends, it certainly has been a while....22 months give or take a week, but the thing to keep in mind is that I have indeed returned and the monotony of your day is about to end. For those of my readership not familiar with today's title, EV is a rather snooty and pretentious inscription used by the obscenely rich to notate the end of personal posts such as thank you cards and invitations. It stands for "en ville", which translates to "in town". Thus when your billionaire buddies invite you to a swanky soiree on the upper east side you will be saved the embarassment of asking "wtf does that mean?" as an aside to your RSVP.

Please note I am neither obscenely rich nor do I count myself pretentious...although if you see signs of either occurring be sure to let me know.

Moving on......

I deeply regret to say that my absence from blogging has eliminated a most amusing chapter in my life to which I may retroactively pay tribute on occasion. My pet hamster, Hockety Pockety, was a darling cream colored rodent with very large testicles that he was forced to drag around Atlas-like for the duration of his adult life. Sadly he passed away this past winter. Many an amusing anecdote have I neglected to share with you all so, on slow days, you can expect to read about the life and times of my 'lil HP. Most regrettably HP's replacement is a large, twitchy and biting rat whom I have dubbed Mr. Pickles, although Satan might be a better name. Anyone with advice on taming rats please write post-haste.

Don't Try This at Home

After a restless night I awoke at 6:30 to ready myself for work. Bleary eyed I headed into the kitchen to toast a bagel while I dressed. After cutting my finger from slicing the bagel I retreated to the bathroom, returning a few minutes later to butter my bagel. While hacking butter off a frozen stick I realized the bagel was still somewhat cold and barely toasted. The solution seemed simple: put the bagel, with butter, back into the toaster oven for another round. Some of you are already shaking your head, I'm sure, as you read this. I exited the kitchen to dress and returning a few minutes later to find the bagel on fire! I don't mean it was smoking in the toaster I mean there were flames licking the #$%^ thing! Apparently one cannot toast butter. As I do not own a fire extinguisher I haphazardly attempted to spear the bagel onto the butter knife, which fortunately put out the flames, and then tossed it into the sink whereupon cold water did nothing to quench the smoke billowing from the charred remains. Meanwhile smoke poured from the toaster so I desperately opened windows and doors before the smoke alarm sounded. Needless to say buying a fire extinguisher has jumped to the top of the things-to-buy list. Meanwhile my friends and family are getting a good laugh from my Martha Stewart mishap.

Housekeeping

My house needs one of those door-hooky things that hotel rooms have saying "housekeeping". Random strangers, who have nothing better to do than walk their dogs all over my neighborhood, could then swing by and clear out the spiders who have taken up residence in my front entryway. Of course I have been hesitant to evict the spiders as my outdoor plants are now indoors and I may need the spiders to wage war against the gnats I've seen buzzing merrily about in their new, warm climate. Augh. Does this battle never end?
Since discovering the joys of self-employment I have also discovered that I am home more, a plus, which provides more opportunity to messy the house, a minus. Despite my best efforts my house somehow looks like I've just been robbed mere days after thoroughly cleaning the damn thing!
If only SS would remember his promise to get me a maid then my problems would be solved. (And yes, I know how spoiled that just sounded!).

Blind-Date Disaster

I have officially had it with blind dates! From here on out I am picking my own men and they must pass a general appearance and manners inspection first. What sparked this sudden vow of anti-blind dating? I am so very glad you asked....

JH, a good friend of my mom's, knows another woman who has a son, Darin (we will be using Darin's full name as I see no need to protect his anonymity after his deplorable behavior). A few years ago Darin mentioned to JH that it's tough to find a good woman these days and she suggested me (what she was thinking I don't know!). Apparently Darin called my mother and asked permission to see me. At the time she felt he was too old for me and said it wasn't a good idea. I couldn't have cared less, which is apparent by the fact that I don't remember this first incident.

Fast-forward to a month ago when Darin again spoke with JH and mentioned he was still having a hard time finding a nice girl. JH asked if he had ever hooked up with me, to which he replied no. JH suggested that he give it another go since I was now older.

So, our boy sends my mother an e-mail and asks her to pass it on to me. He told me a little about himself, including the fact that he is looking for a wife and hopes to have children someday. A little much by way of an introductory letter, but at least I knew right away where his interests laid. He also attached pictures, which from his perspective was a mistake. His e-mail, however, seemed nice and I was pretty impressed with his tenacity in meeting me. As it turned out, he was coming to town for a wedding the last weekend of September and asked if we could meet for coffee. Despite my complete lack of interest in him I agreed too meet, mostly because I have assertiveness issues and am nearly incapably of disappointing anyone but my parents.

We agreed to meet on Monday evening. I told him where to go, noting there was a Starbucks and a good restaurant so we could either grab coffee or have dinner. He opted for dinner. I told him I finished working at 7:00 and to meet me at 7:15. I arrived and he was nowhere to be seen. I waited in the restaurant for a while but, after a bit he had still not arrived. As I did not get good cell reception I exited the restaurant to see if he was perhaps waiting outside, but he was not. I called and left a vm reiterating directions and said I would be inside waiting. Finally, at 7:35 he arrives with no apology or explanation as to why he is nearly 20 minutes late! This could have been easily overlooked had it not been for the rest of the evening...

The conversation started out well enough but headed south when he ordered an incredibly fussy salad that wasn't on the menu! Our poor waiter had to come back twice for ingredient checks! Darin insisted this was how one could tell if a chef was any good. Yea, whatever pal. You just came off as the world's biggest prima-donna, which is pretty tough considering the weekend I spent in NY w/ J and her so-in-denial gay friend TN. But I digress...

After ordering our dinner I made the monumental mistake of asking Darin who the wedding was for that he attended. At this point he launched into a tale of how he met the groom at some men's retreat. Unfortuntaely he was not permitted to tell me much about the retreat as "they" are not supposed to talk about what goes on there! (un huh: exactly what I was thinking!). The gist of this retreat, however, is that every man supposedly experiences some event in his life, usually in his childhood, that keeps him from being the full man he was intended to be. Through this retreat, which creates a "safe place", the men are able to discover what this event was, work past it, and become the manliest man they can be. (These are shmatzel Darin's words; not mine). At this point I'm thinking "okay...this is weird".

Unfortunately Darin used this tale to springboard into the story of his "spiritual journey" as he constantly refered to it. He covered his rebellion, his adult baptism, his stint at seminary and his future missions plans. All the while his prose is littered with Christian jargon and I'm thining "who is he trying to sell? Me or himself?". Don't get me wrong, having a spiritual component to your life is all well and good, but it was way too much information for a first meeting and he talked about himself way too long! I don't even know what this guy does for a liviing b/c he was spewing so much crap at me about his "spiritual journey"!

As if this wasn't bad enough (yes, I am sorry to say that it does in fact get much worse) during the course of conversation, rather his monologue, I could see light reflecting in the lenses of his glasses. His eyes also kept flickering over my head to look at something. I finally turned around to see what had so transfixed his attention and, lo and behold, the football game was on! When he saw me turn around he looked a bit sheepish and apologized for continuing to check the score. Hahah. We laughed. Not funny. Shmazel.

The game must have then got really interesting because as this shmuck launches into an explanation of his future mission plans he is literally staring OVER my head and STARING at the television monitor while he speaks. I was so annoyed that I interrupted him mid-sentence and asked what the score was. He didn't even bat an eye! "I don't know, they're not posting right now" was his response! Then he watched the monitor until the score showed and proceeded to share the score: at least he answered the question!

The final straw came when the check arrived. Call me a princess, which I am, but I expect a guy to pay on the first date, or whatever it was, at least! Darin paid, fine. When the bill came back, however, I decided to test him (a poor idea in retrospect) by asking if he would like me to contribute to the bill. His response, are you ready?, was "Sure, you can throw in some cash....or you can pick up the tab next time". Yes, he actually said that! So, I smiled sweetly and said I would let him get it this time. Jerk.

Fortunately our boy had another place to be later that evening which meant my misery was mercifuly ended much earlier than anticipated. By way of goodbye prince charming shakes my hand and then leans in for the pat-on-the-back hug, which you all may have seen on Sunday morning as the pastor makes rounds with the congregants. I call it "the pastor greeting"; apparently Darin sees it as an acceptable way of parting ways with a woman. Unbelievable.

To Darin's credit, the heinous things he did weren't so bad in the moment. Most of the stuff I would have gladly overlooked but, when I look back at the encounter as a whole, I see what a completely self-absorbed and pompous ass he was. I'm getting worked up just typing it out here! The whole watching the football game was really the crowning insult.

Nice person that I am I decide to spare Darin my true opinion of the evening and simply not communicate with him anymore. He decided to make that difficult. He called from the airport Tuesday night on his way home (Denver) and left a vm saying he'd had a nice time blah blah blah. Of course he had a nice time; I'm a great date! I chose to not return the call.

Friday, however, I receive an e-mail from him. "How is your week going? Darin". The time had come to take action. I responded with the following e-mail. Perhaps a bit scathing, but the point had to be made:

"Darin,

After arriving 15 minutes late without apology or explanation, intently watching the football game over my head while telling me of your great passion for missions and then accepting my offer to pay for dinner or providing the alternative of allowing me to pick up the tab next time, I have no interest in either seeing you again or staying in touch.
I am sure you fancy yourself quite the catch but unless you learn how to treat a lady in a more gentlemanly manner then I suggest lowering your standards for a spouse.
You might consider me high-maintenance, but I too have high standards and have no interest in pursuing a relationship with someone who is incapable of treating me like a princess at least on the first date. "

As I was putting the finshing touches on this puppy KS happened to pop by and encouraged me to send the e-mail pronto. Had it not been for her I would have saved it to drafts then come back once I was less peeved to modify and "nice-ify" it. He replied the same day:

"Hi, I can respect your "perspective" of the date. Not much grace there, but that will come more with age and the natural storms of this life! If I did or said anything that was sinful towards you, please forgive me.

As for "fancy myself quite a catch" my only response to that is that I am a sinner, saved and deeply grateful for Gods grace and mercy. I am a genuinely caring and loving man who (although not perfect) is committed to and is passionate about serving the Lord and loving people and growing and learning as I continue to walk through this life.

Now that you have made a clear decision that you don't want to date me based on your first impression, then let me know when you want to get together as friends for that brandy and cigar! May God bless your life with love, grace, humility and eternal purpose.

Take Care
Darin"

"NOT A LOT OF GRACE THERE" Who was watching the football game buddy?! Augh. Just reading that makes causes a blood rush to my head! I'm sure this guy will make some CF&I grad happy as a clam and I'm sure his mother thinks he's an okay guy. I, on the other hand, have no interest in ever hearing from him again and am doubly fortified in my intentions to stay blind-date free for the rest of my dating days so help me God!

Confession # 5

On really bad days I think about my neighbor's incessantly yapping dog getting run over by an enormous SUV and I smile.