Roselawn Kitchen

The few weeks after we brought our daughter home from the hospital and moved into our new house we put the final touches on the kitchen in 1/2 of the duplex we own.  Basically, we finished what had been an extremely long project just in time for our new Tenants to move in.  The transformation was pretty dramatic, but unfortunately we have no before shots just a halfway started shot, some in progress shots and the finals.  Anyway, take a look:

Not bad for our first kitchen.

What Happens, Happens. Breath

We’ve had a lot going on lately.

  • In February we refinanced our duplex.
  • A the end of February we bought a new car.
  • In March our offer on a new house was accepted.
  • We close on the new house May 10th.
  • We’re in the process of finishing work on our apartment.
  • We’re in the process of renting out our apartment (we’re keeping our duplex).
  • My Photography business is just getting started.
  • I started a new Outdoors Blog.
  • Our first baby is due June 4th.
  • Rachel has been put on bed-rest until the due date.
  • Stressful things are afoot at work (some that I like, some that I don’t).

With all that’s going on I constantly need to remind myself to just slow down & breathe.  It’s hard sometimes.  There’s a lot to get done and it often feels like I’m not getting anywhere.  I get tired of people telling me about it though, I’m fine.  I take it all in stride, and whatever happens happens and we’ll deal with it as it comes.

Ze posted a song a while back that I had totally forgotten about until today, when he posted the story of how he made it.  It resonates with me perfectly.  I get it.

http://bandcamp.com/EmbeddedPlayer.swf/track=397380065/size=venti/bgcol=FFFFFF/linkcol=4285BB/

Hey, I’m Ok.

I’ll be fine.

Just Breathe.

The Rental vs Ownership Lifestyle Choice

Authors Note: This post is in response to Mint’s latest article The Renter’s Manifesto which makes a pretty good argument for renting

Some people like to say

Renting is throwing your money away.  At the end of your lease you have nothing to show for it.

I’m sorry, but I need to disagree.  Not only does renting not throw your money away (you’re getting a place to LIVE remember?) but it’s also cheaper than buying in a lot of scenarios.  You may not be building equity, but what can you do with that extra 300 or more per month?  That’s right… build LIQUID equity.

You’d have a hard time convincing me that a Single Family Home is a good investment.  To me owning a house is nothing more than a LifeStyle choice. If it were a purely financial decision there would be a lot fewer home owners.

However; owning a rental unit is 100% different from owning a house.  It’s an investment.  We made that investment a few years ago, and it’s paying off.

Some numbers:

When we were renting we were paying $715 out of pocket per month.  That’s it.  Stupidly, we didn’t have renters insurance, so there’s $25-50/month we should have been paying that we weren’t.   So really… $740/mo

When we bought the house that dropped to about $600 out of pocket per month.  Add on about 75/mo for insurance (for the whole house) and you’re now at $675/mo.  Then there’s maintenance.  We’ve done a lot, to both sides.  new kitchen, lots of new drywall/paint/cleaning/etc.  My records show somewhere in the neighborhood of $2-300/month amortized across the life of our residency.  Now we’re up to $975/month without even trying.

Those are the hard numbers, now the soft:

When we bought the house we put a 10% down payment on it so we had a decent (not huge, and certainly not useful) amount of equity right away.  This put us in a good situation with the principle, however our interest rate was at 7.25% only .25% above the average and we could have gotten better, but it would have increased the bottom line on the house.  The previous owner gave us a hell of a deal (by my accounts at least a 10% discount off the true market value of the home) because we didn’t involve any realtors or banks.

4 years later and we just completed a refinance.  This hurt, a LOT.  but it was also one of the best decisions we’ve made.  It took us from 7.25% to 5% flat but it cost us about 3 years.  It’ll take us 3 years to recoup the cost of the refinance.  That’s ok though, because we’re in it for the long haul.

Now we’re down to about 775/mo out of pocket and we’re not done.

We just bought a single family house because our family is growing and we’re running out of room (remember that I said it’s a life style choice).  That and because now we can finally treat the rental property more like a business instead of an extension of our home.  I expect maintenance costs to shrink dramatically as a result.

If you look at our current out of pocket monthly expenses… it’s almost a no brainer to buy a duplex as a starter home.  I recommend it to every one I know that’s looking for a house.  As long as you’re a little handy and can deal with the tenants calling you in the middle of the night to tell you the pilot light is out… you’re owning for next to nothing.  Yes our out of pocket is more than what it was when we were renting, but there’s a few factors there:

  1. It’s not that much different.  $775 vs $715? 60 bucks and you have the freedom to do whatever you want?
  2. We’ve done a LOT to our house.  $300/mo is way more than necessary and I hope to bring that down in the coming months.  New drywall, new roof, new kitchen… have all been done.
  3. Equity.  While it will cost us 3 years to recoup the cost of the refinance, in those 3 years we’ll not only make that money back, but also pay all that money down on the principle and more essentially getting a 200% ROI.
  4. Going along with Equity… Increased home value.  Our house has increased in value about another 12% since we bought it (remember that we bought it at around 10-12% below market value at the time of purchase) and we’re only paying 60/month more than we were when renting.  Right now we have over 30% equity in our house and more than half of that is being built up by the tenants NOT us.

Buying a single home though…

Just remember that it’s a LifeStyle choice, not a financial one.  If it was a financial one, you already know the answer, it’s going to cost you more for the same quality of home and location…   Financial decisions are all about getting the most for your money which isn’t the case with a house, unless you consider the lifestyle ‘more’.

Oh and one more thing to add…  If someone is renting a house to you, it’s costing them less to own it than they’re charging you, otherwise they’d be pretty dumb.  However; they’ve probably owned it for years and years, which pretty much wipes away the initial cost of ownership.  Closing costs Suck and eat a huge amount of your equity up right away. Just food for thought.

House Officially Refinanced

We’re a fan of big wins, and refinancing our Mortgage has probably been one of our biggest.  It’ll take about 4 years to recoup the costs of refinancing by what we’re saving monthly but overall the savings are huge.  We’ll be saving over $60k in interest over the course of the loan.

It was a bumpy ride but we learned a lot along the way.  Mostly, that NY sucks and banks are thieves.

  • A Refinance is no different than an original mortgage.  It’s treated exactly the same.  Almost as if your buying the house from yourself and you have to pay all the fees.
  • Monroe County charges a totally unreasonable Mortgage Tax
  • Title insurance doesn’t make any sense.  It’s good for the life of the property but you have to pay it again when you refinance.  No refund, no discount.
  • Banks charge outrageous fees.
    • Loan Origination Fees
    • Commitment Fees
    • Application Fees
  • Bank require you to pay their lawyer fees on top of all the fees they charge you to begin with.

Lots of fun huh?  Good thing it’ll be worth it in the end.

House Insurance Sucks

InsuranceOur experience with insurance companies of all kinds is horrible.  We’ve had the absolute worst luck although We’ve never really written about it here in detail before.  Our car insurance has been canceled several times (for reasons beyond our control) and our house insurance is expensive because of a few punk kids in Fairport and a stupid AllState policy.

We’ve dealt with our high cost house insurance for 2 years because it was the best we could get at the time (thanks to AllState, jerks).   We figured after living with it for 2 years things would have settled by now and we’d be able to get a better rate.  Through phone calls to at least 15 different companies, we’re not gonna have any luck and it looks like we’ll be stuck with what we’re paying now: about DOUBLE what seems to be the local average.

Three reasons we’re having trouble:

  1. Our house is a Multi-Family Duplex.  Many insurance companies simply don’t offer insurance for these types of houses.  Although it reduces the number of quotes we can get, and therefor the possibility of getting a lower rate, I don’t fault them for this.  It’s their company and they can choose to cover whatever types of houses they want.
  2. Our house was built before the turn of the 20th century (approximately 1890).  It’s Old.  Many companies seem to think this is just too old so they won’t cover it.  I don’t get this one.  Yes older houses were built using different standards and fit to different codes, but that’s the point of risk pools.  Just put the old house into an appropriate risk pool.  This was totally shocking to me since there’s TONS of people with houses older than ours.  I hope the houses we’re building today last more than 100 years…  Will they stop covering houses built in 1990 in 2109?  Seems dumb.
  3. We have 2 Siberian Huskies.  They’re awesome family dogs and very friendly.  We didn’t really think anything of this, but every company we talked to categorized Huskies as an aggressive breed.  What a bunch of bull.  I’ve never seen a non friendly Husky and I’ve never heard of one.  Their rationale seemed to be that they’re related to Wolfs.  Well, hate to break it to ya guys but your Lab & Retriever dogs share the same ancestors as our Huskies… they’re all related and share some Wolf DNA.  Huskies just happen to have maintained their appearance more than others due to their natural work environment.

The first 2 issues I can gloss over because not every company had those restrictions and they almost seem reasonable since a company can choose what to cover and what not to cover.  The 3rd however; is inexcusable.  I simply do not understand where the idea that Huskies are an aggressive breed it’s coming from.

We were just trying to get a big win by getting our yearly insurance cost lowered.  It looks like this won’t be happening anytime soon thanks to yet more retarded insurance policies.  The whole industry is a giant scam in my opinion.  As soon as you want to USE your insurance, they drop you or raise your rates.  Why can’t we lower our rates every year (or month) we DON’T use the policy?

Raymonds Pectoral Plaster and other Goodies

We live in an old duplex built before the turn of the LAST century.  As a result, we find some interesting things sometimes.  A recent construction project which involved tearing out our kitchen ceiling resulted in some very cool finds.

What we found:

  • ceiling stuffA sheet of paper describing Raymond’s Pectoral Plaster and its’ uses
  • A Postcard from Meriden Connecticut postmarked 1909
  • A bible lesson copyrighted 1896
  • A piece of glass with a label from Monroe Pharmacal co in Rochester NY
  • Bits and pieces of glass, some labeled some not, one which had ‘Buffalo NY’ etched in it
  • 3 ceramic white tubes with knobs at the end
  • a clothespin
  • some very short lengths of copper piping
  • A metal mesh ball with a hole at the bottom and a spike at the top

I have no idea what most of this stuff is but I find it fascinating that it was all piled up together in our ceiling.  If you have any thoughts let us know!  More Detailed Pictures Below:

Clean Slate

Ok so… we’ve tried word press before and never kept it up. This was basically because we tried to be retro-active in posting a bunch of stuff about what we had already done and it was overbearing. We’ve tried blogger but to no avail… Hopefully we can get this site going. We’ll use it as a place for people to know what Rachel and I are up to.

For those of you who don’t know Rachel and I bought a house (duplex) 6 months ago or so. Well… we’ve learned some things since then. Quite a lot in fact.

  1. It’s true what they say. You never really are done. when we bought the house we only had a few things in mind. Since then the list has grown daily
  2. No project is really as small or as easy as you think it is.
  3. You dont really have time anymore.
  4. Old houses are full of surprises.
  5. Insurance companies suck.
  6. Water can cause a lot of trouble.

on to that last one for a second and then i’ll end our first post…

A little less than a month ago we had a pipe break in our ceiling. Wow what a pain. It happened while we were both at work and conveniently enough the only day in months that i’ve forgotten my cell phone. Our tenants came home to about 4″ of water in the basement. They went through some hurdles and finally ended up calling the fire department who promptly came and took care of the problem. This does NOT end our problems however. Since then we’ve pretty much not had a dining room. We’ve got a cracked floor joist, drywall and pipes to replace, flooring to put down electric to run etc etc.

Anyway… that’s all for now. Rachel and I are off for dinner and a movie.