Let It Roll, Baby, Roll...

The stage is set, the die is cast, whatever you want to say – the ball is rolling! On Thursday, we submitted some questions (mostly about mechanicals, roof, etc.) which were answered very quickly. I “gently” broke it to the owners that their square footage calculation was wrong (they never replied to that email, but you can bet they went down to City Hall that day!). The offer letter was ready yesterday, but we sat on it all day, for no particular reason other than that we were scared ____less. But at 7:01 PM last night, the letter was submitted via cyberspace.

It was a fair offer – one they cannot possible perceive as an insult. But let’s face it, they have not done anything proactively in that house. The kitchen is 17 years old. The roof is 13 years old. The windows are original (1970). The house has not been painted in eight years. So to receive an offer that is 15% off the asking price is not too shabby. And lest we forget, if we do this private sale, there will be no broker’s commission, which will save them over $50,000. Nice work, if you can get it!

Last night, ½ hour after I sent the offer, I picked up two of my friends and went to dinner at a great local restaurant. And wouldn’t you know it: There, seated at the next table, was the owner of the house we just offered to buy! I text-messaged my husband, and his response was, “Too bad he is not there with another woman. (Note: wife is away, looking at houses in their target community) Then we could steal the house!” He did have his arms around 2 ladies, but it was clearly a gathering of old friends – all couples except this guy. I don’t think there was any hanky-panky going on. Perhaps I should shoot him an email saying, “Was that you at the restaurant last night? I am sorry I did not get a chance to say hello, but I did not want to intrude on your fun.” Then, if there were any question about his actions, he would know that I knew. Food for thought.

Just kidding, of course, but it would be nice if there were a way to steal this house. I guess the fact that it will go to market at the end of September could work in our favor – as the holidays approach, there are fewer buyers out there. However, now that they have secured our offer, they will undoubtedly use it to drum up others. I can hear the realtor now: “Well, there IS an offer already, after all, so you may want to act quickly.” What better words to drum up interest? It’s part of Queuing Theory, I believe (very rusty business school Operations Management memories) – haven’t you ever noticed that when you walk into an empty store, it suddenly starts to fill with customers? Whatever happens, I am proud of us for our due diligence and for taking this risk. While I do believe it is a calculated risk, it is still outside of our comfort zone, and we will have to continue to push the envelope in order to secure our future, and that of our children. So, let’s see what comes back, if anything, this weekend. We are ready to talk!

Didn't See It Coming

Oh what a difference a week makes! While chatting with neighbors on Sunday, we learned that the owners of the colonial on the hill (mentioned in my previous post) are putting their house on the market in the next two weeks! My initial reaction was, “Oh, that’s too bad. Better luck next time!” Thankfully, my husband immediately began the first round of “What if…?” The most important “What if” being: What if we can come up with some lenders and make this happen? We decided to “pay attention to the signs”, and be aware if the process of vetting this investment became too onerous. We would then have to understand that it was not meant to be.

We laid out a methodical plan for our due diligence. First step: call the owners and indicate our interest. The call was returned and a date for showing was made. Second step: Drum up possible lenders. Check. Yes, there is still money out there for investors, if you can be creative! I realize that it appears as if I am referring to this house as an investment, but in actuality, part of the plan is to KEEP our current house as an investment while we move to the larger home. It is truly the only way this deal works. With brokerage fees and transfer taxes, a scenario in which we sell our current home becomes a money-losing proposition, while renting could potentially turn a profit. Not to mention the long-term benefit of owning a $1,000,000 investment that pays its own mortgage and other costs. This house, in a sense, becomes our “retirement plan”. If the mortgage is someday paid off, we simply collect rent as our income. Another possibility is that refinancing the investment house in the future creates the opportunity for other investments.

We were truly blindsided by this opportunity, which may or may not happen. At this point, we have seen the house twice, and reconciled with its plusses and minuses. We have asked questions which have been answered. One sticking point which I will need to address soon is that the square footage is not what they claim (and it’s not their fault). The city records are wrong, unfortunately, and counted the family room (a 12x 16 foot, single-story space) as two-story. So, the house is about 200 square feet smaller than they told us. I will have to figure out how to call their attention to this disparity without royally pissing them off. We are close to submitting an offer. But it is a clear case of the “cart before the horse”. Our income, like that of so many people across the country, has been down for the past year. I had not officially begun to look for work. For some reason, though, we are at peace with all of this (beer and wine sure do help!). One of my greatest concerns throughout my adult life has been the funding of college and retirement, mostly because my parents did not plan for either. The fallout from that lack of planning has been close to devastating, and I have always been terrified of repeating their mistakes. But equity in a thriving asset – that could be the ticket for us.

The next step will be to begin the negotiations. If we cannot strike a deal in the next few days, the house will go to market. This could be good or bad for us – in the past, non-updated houses on this street have languished on the market. Renovated homes have gone to sealed bids. Where will this house fall? Hopefully into our outstretched hands within the next couple of days!!!

Next Chapter...Colonial?

The summer is gone – there is a strong breeze and a chill in the air. The flowers are all but dead, and a friendly caterpillar has made his cocoon under our Japanese Maple tree. It is time for me to emerge from my summer bubble and announce that we have decided not to add onto our house, for a plethora of good reasons.

It all started when we heard that our empty-nested neighbors were putting the word out that they would entertain a private sale of their home over the next couple of years, if anyone were interested. The house, a colonial, is one of the largest on our street (about 2,800 square feet), and sits perched on a hill with a very private wooded backyard. My husband does not love the sloped driveway, but the front yard is perfect for small-scale sledding. It will need quite a bit of renovation as the front steps are crumbling and the interior appears to be completely original. But to us, a renovation project is infinitely more desirable and doable than an addition. Of course, we are not chasing this particular house, and in fact there are several other empty-nester homes on the street that may go to market first. But this one got our juices flowing.

While we have determined that we can make an addition to our Raised ranch work (yes, we revised it again), by simply adding a new kitchen, expanding the dining room, and adding a bedroom and bath downstairs, it does not give us what we truly want out of our house: flow and lack of redundancy. Our enormous downstairs family room was virtually unused all summer. We have separated our daughters into their own bedrooms, so we no longer have a guest/play room upstairs on the main level. And we can see with clarity now that we will want more separation between the public and private areas of the house as these girls grow up. With my aging brain, I continue to go up and downstairs ten times a day because most of our storage is downstairs and I am forever forgetting why I went in either direction/what I was looking for. This can only get worse as I get older!

Besides, moving to an existing house is GREENER. Wouldn’t it be nice not to have to disturb the plant and animal life that live in the earth behind our house? We have a large number of boulders at the very back of our yard that were excavated when the original foundation was dug. We would undoubtedly find more rock in digging a foundation for an addition, and I can only imagine the added expense (and noise, and irritation to our neighbors) of chipping it out.

Another consideration is that I will (hopefully) soon be returning to a regular job, and will have less time to manage a large-scale project. We would have a much easier time managing one project at a time, when we can afford it, to make an existing house perfect again. In the meantime, we have outlined about $20,000 worth of projects that we would tackle immediately to make THIS house perfect before selling or renting it.

I still believe that our addition plan would work for any Raised Ranch. But based on our specific needs, we do not feel it will work for us going forward – at least, not to the extent we would like. This family is entering a new era, in which our kids are older, we spend less but higher quality time together at home, and we are not as willing to compromise when it comes to our house dreams. The next 12 months should be interesting…