finances

DIY Projects

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I took a break from writing posts to play in the nice weather we were having and then finish up some outstanding projects this weekend. Some projects are still not finished, but I felt good about the progress. Here are some things I did, which means you can do it too and save yourself some money. 🙂

SHOE STORAGE: $6

We have a mud room “welcome center” or “drop zone” in our house. Here’s a picture from the builder on what it looks like.

It’s beautiful until you realize that the purpose of these shelves is to house things like shoes, keys, outdoor things, etc. There’s no point to style them like bookshelves, and it’s hard to keep it looking organized. When we have guests, they have to see this because it’s outside the only first floor bathroom. It drives me crazy that people see it. I store all our craft supplies on the top shelves (little hands), and I ripped all that down and organized it into bins. It’s not pretty to look at, but it’s still better than the pile of things that quickly gets unorganized. The bottom shelves have shoes on them. A year ago, I asked Mr. ODA to build me an intermediate shelf in the bottom right cubby. We used scrap wood already on hand at that time. Shoes aren’t tall, and we were just throwing them in there on top of each other. Well, all this build up just to say: I finally bought contact paper and wrapped the plywood. I originally wasn’t going to bother painting it because I didn’t have the trim paint on hand. Since then, a nice worker left me a pint of it, but I still thought the contact paper would be better. It seems so small and silly, but I got the pattern to line up straight when I wrapped it on the edge, which makes me happy.

LAUNDRY ROOM: $49

Again, nearly a year ago, I took down the builder-grade wire shelf that was in the laundry room. I then patched the gigantic holes that this type of shelf requires. Here’s a builder photo of a laundry room in this floor plan to show what I mean, and where it started.

Instead of blinds in there, I frosted the bottom sash of the window with spray paint I had left over from doing a similar job in our last house ($0). Someone was getting rid of a cabinet on our neighborhood page, and I wanted it for the laundry room ($0). I bought cabinet enamel ($25), which I highly recommend over regular paint if you want a clean look. It’s pricey, but it’s worth it (I’ve used it here and on a desk I refinished, and I still have half the quart left. Here’s the one I used.

I hung this repainted cabinet last summer. Every time I walked by, I thought that a light brick wall would look so good with the color of the cabinet. I thought about it for several months and finally decided to go for it. I bought 2 rolls of peel and stick wallpaper off Amazon ($14). It did not go well. I got the idea out of my system, but I didn’t enjoy the process of hanging it. I’m curious about doing traditional wallpaper, which is easier to move around and line up, but I was disappointed that these two sheets didn’t automatically line up with each other and I had to piece them together.

In my last house, I hung a cabinet and then Mr. ODA and his brother built two shelves that I stained dark next to it. That’s still my goal here, but I haven’t done the shelves. I had already been in Home Depot for an hour, and Mr. ODA wasn’t there to talk me through the options, and HD likes to just throw all their crap in the lumber aisles to make it very difficult to navigate if you have a cart, so I gave up. But I did get chair rail ($10)! I originally wanted something really big, but I panicked and went with a smaller, more ornate option. I stained it espresso (already on hand from the last laundry room job), so you can’t really see the details in it, but at least the end of the wallpaper is covered now. It doesn’t matter how many times I am around an air compressor and nail gun; I do not enjoy that thing.

I also put the contact paper that I bought for the shoe shelf on the bottom shelf of the cabinet I refinished since paint had dripped into it and the original owner of it had drilled several holes through the bottom of it. P.S. The knobs were put on by the previous owner; one day I’ll patch the hole and realign the knobs so they’re even, ugh.

STENCILED WALL: $73

I don’t really recommend stenciling a whole wall. I’ll probably put 10 hours into the wall already by the time I’m done. Also, $73 is a lot to spend on one wall, but I’ll find more uses for the paint. That’s the upfront cost, but with leftover supplies, there will be more projects.

I wanted my daughter to have pink in her room, but nothing bright. I found this beautiful muted pink color. I wanted to do one wall this color in a satin finish, and then get the same color but in an eggshell or flat to do the stencil. While at the store, I found a different kind of paint and went for that instead; it’s a metallic paint! It’s subtle enough that it’s hard to capture all the stenciling in photographs, and it changes how you see it based on how the light hits it.

So I’ve purchased a gallon of pink paint (that has more than 2/3 left in it) ($38), this special paint (with about half of it left once I’m done) ($20), and the stencil that I had someone make for me ($15).

Halfway through the wall, I discovered an error I’d been making. I had been using a manual level to make sure the top of the stencil was level when I put it on the wall. The stencil was not cut correctly – the image on the stencil is cockeyed within the stencil, so leveling the edge of the stencil meant that everything I was painting wasn’t straight. Once I started using the laser level, I found that the level line wasn’t the same whether I used the top of the cut out part or the edge of the stencil piece. I tried to start correcting it because, while it wasn’t noticeable, I figured it’d get noticeable by the time I got to the other edge of the wall and along the ceiling. Things got messed up in a few spots where I couldn’t quite see where I was lining it up against what I had already painted.

Oh, and let’s not forget that I had the paint out, went to deal with a crisis with my son (potty training!), and my daughter seized the opportunity. She got my paint brush, dipped it in the paint, and smeared it all over the stenciled wall I had already done. Luckily, that stencil was dry, and I found her right away so the paint was wet, so it mostly just wiped off.

There are two sections I’ll need to re-paint pink and then re-stencil, and then there’s a few touch up areas where I’ll need to hit it with a small brush and fix the pink around the stencil. Once paint got caked on the stencil and created its own barrier to bleeding behind the stencil, the wall is coming out perfect. If this didn’t take absolutely forever, I’d want to go back and do the first 5 rows I did without the laser level and caked up stencil, but no thanks.. it isn’t THAT noticeable!

The [near] finished project is exactly how I pictured it, which never seems to happen for me, so I’m powering through. Here’s a close up of the wall since there are too many imperfections to share the whole thing at this point.

BASEMENT WET BAR: $53

Mr. ODA and I put up shiplap against the wet bar wall as a feature. We didn’t want to close in the room with upper cabinets (this section sits in the middle of the open basement and we didn’t want to distract from that), we didn’t want to tile the wall with a backsplash because the wall is FAR from even, and we didn’t want to leave it painted with nothing above it. Mr. ODA decided on shiplap, and he liked the charcoal color instead of the white or painting it. It really looks great, but it’s unfinished. We didn’t know how we wanted to do the final piece. So this weekend, I bought two molding types to check it out, and we still need to add that and paint/stain it. I also purchased the sink faucet finally, which should arrive tomorrow. We first thought we’d put shelves in the shiplap, but after you work so hard to make it level and shim it like crazy behind each piece, you don’t really want to immediately drill anything into the face of your pretty project. 🙂 I didn’t include the cost of the shiplap in my calculation above because that was purchased before this weekend’s goals of finishing projects, but the molding was $10 and the faucet was $43.

Speaking of finishing, this reminded me that I have to buy the cabinet pulls. We had held off installing them because the flooring people were going to come back and fix some things. There’s a protective layer on the outside of the cabinets, and I didn’t want to pull it off until they were done banging around near them (their workmanship was quite poor, so I don’t trust them). Since I wasn’t going to install them, I didn’t make it a priority to order them, but I can now. There’s more to come on the basement, since we did most of it ourselves.

DIMMER SWITCH: $11

Our son’s sleep has been an issue since birth (PSA: Buy the Taking Cara Babies course for newborns and save yourself a lot of frustration in life by getting a baby to sleep longer with less fights). We finally got into a bed time groove, but it involves him sleeping with the light on. It drove me crazy that it was so bright in there, so I removed the bulb from the overhead light and told him it was broken so he’d use the lamp. When we visited my family, he slept in a room with a dimmer switch and let the light be on the lowest dim level. I finally got around to purchasing the dimmer switch and installing it! Cut off the electric to the room at the electrical box, unscrew the old one, cut the wires, strip them to the right length (it’s on the back of the switch), insert the wires in the right places, screw it into the wall, and turn the electric back on.

SUMMARY

And that’s where I’ve been for the last week! We ordered a desk for the office and a dining room table now that all the existing furniture is where it’s meant to be with the basement finished. That’s what caused my final push to get things done. Now we have our daughter’s birthday party coming in a few weeks, and I was hoping to have almost everything completely before people are in the house! Now go do some projects you’ve been putting off too. 🙂

Year in Review: Part 1

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Just over a year ago, I decided it was time to put more effort into sharing what we’ve been through. When I’m looking to learn something new, I like to find examples of how other people handle it. I want to know the places they struggled and how they learned. I find it a better way to form my opinion than by reading an article that doesn’t have any meat in it, only providing an outline.

In the last year, I learned that blogging wasn’t as easy to keep up with as I thought it would be. I have a list of topics still to cover, so it wasn’t a matter of content. But raising two kids hinders my ability for an uninterrupted thought process to write an article, unless I get to it before they wake up.

The blog was started by Mr. ODA in 2018. He wrote a few posts, and then it sat for two years. I decided to pick it back up in January 2021. During 2021, we published 65 posts. Each month, I wrote a post about our financial update; I included any major expenses, how management of rental properties was going, and how our personal spending may have changed month-to-month. I shared our purchase of 11 out of 13 of our properties, our sale of one property, refinancing mortgages, paying off mortgages, renting properties, maintaining properties, etc. I also shared just general life decision making along the way.

Part 1 for my year in review will address what happened with our rental properties. I’ll dive into our personal finances in Part 2.

As a quick recap, we have 12 rental properties. Nine of them are in Virginia, and three of them are in Kentucky. Two of the houses in Virginia are owned with a partner because we still had cash available to buy more houses, but at the time we had the maximum number of mortgages allowed by Fannie/Freddie (max is 10). The houses were purchased between February 2016 and September 2019. All 3 houses in Kentucky are managed by a property manager, who gets 10% of the monthly rent each month. I manage 5 of the Virginia houses personally, and then we have a property manager who manages the remaining 4, who also gets 10% for each house.

RENTAL PROPERTY MORTGAGES

In January 2021, we completed a refinance of one property, and then in December, we completed three cash-out refinances. The loan balances on these 4 properties increased; one increased because closing costs were rolled into the loan balance, and the other 3 included $190k worth of equity taken out from the houses and creating new loans.

We went from 11 mortgages (two of which are actually owned by a partner) down to 8. House 6 had a balance of $26,447 coming into 2021, and that was paid off by June. Two other houses had a total balance of $157,500 at the beginning of the year. Their balances dwindled through regular monthly payments and one lump sum payment right before we completed the cash-out-refis and completely paid them off.

We have been working on paying down another mortgage that is owned with a partner. Between the two of our families, we paid off about $44,000 additional principal for that mortgage. We’re matching each other’s additional principal payments so that the math is easier to follow, so we can only make additional payments in line with what he can do also. We each owe about $10k on this mortgage now.

Even though there were so many mortgage-related transactions in the year, our overall loan balance only decreased by $6,000.

The market has continued to rise due to the limited supply, and so our home values on the rentals actually increased over $500k over the last year.

RENTAL PROPERTY LEASES

We turned over 1 property the whole year! The tenant that was living there had already told us that they were renting until they found a place to buy, so we knew they wouldn’t be long term tenants. We had a relationship with them from a previous house, when they had moved out of the area and then back. They had a poor experience renting in another area and reached out to us since they appreciated us as landlords. They found a house towards the end of their first year, but we let them out of the lease early. Their lease was slated to end October 31, 2021. We don’t usually have leases that start/end in the Fall if we can help it, but we had let the previous tenant out of her lease early to purchase a house also. The tenant said she was able to be out at the end of August, and we preferred moving the lease closer to the summer months anyway.

We raised the rent on 6 properties.
– The one house that was turned over went from $1200 to $1350 per month. However, we added a property manager who gets 10%, so our cash flow only increased by $15 per month.
– Two of our properties have long term tenants; the rent is significantly below market value, but we value not having to turn over the house. These houses are on a cycle where we increase the rent $50 every two years.
– Our KY property manager tried to increase rent on the 3 properties she manages. One was increased by $25, another by $5, and the other one cried that she couldn’t afford an increase. That’s the one where we plan to increase by $75 next month, and if she doesn’t accept, we’ll turn it over and get $75-$100 more per month.
– We increased rent by $150/month for one of our properties that we have with a partner. It was a risk, but this is a house that claims 3 people live there, but they have 5 queen size beds in the house. We figured either they leave and we get several big things fixed up that have been deferred because of all their things in the way, or we make up for all the years that we didn’t manage their rent and didn’t increase it. They accepted the increase.

RENT COLLECTION

We were very grateful that we made it through those initial months of the pandemic without tenants not being able to pay rent. We had a few people let us know that they were laid off or unable to work (e.g., restaurant business), but we learned most of our tenants worked in the health care field. So while we made it through 2020 without many issues, 2021 brought more challenges. Nothing was insurmountable, and it wasn’t debilitating financially, but it was still something to manage.

We had some big struggles with non-payment of rent on one house. She was 31 days late paying August rent, then she didn’t pay September’s rent, and then she applied for rental assistance to cover September, October, and November, which we didn’t receive until February 2022. That was all on top of her generally being a week late in paying through the beginning of the year too. She doesn’t maintain employment, she doesn’t communicate, and we’ve just had something new and different pop up as an issue every few months. We eventually received January 2022’s rent, but we still haven’t received all of February’s rent – just in time for March rent to be due.

We have another property (the one that was raised $150 per month) that is perpetually late. They eventually pay, and they’re getting better about actually paying the late fee (when they pay rent 20+ days late…), but they were late for 10/12 months of the year.

Everyone else paid their rent on time. In general, we’re lenient with late fees and issues. If you reach out to us and mention that there was a hiccup and you’ll need one more pay check to pay rent, our response is typically: please pay what you can now, pay the rest next week, and don’t worry about the late fee. However, when you don’t communicate and/or you’re consistently weeks late and we’re having to carry the expenses, there needs to be a consequence to incentivize you getting back on track.

RENTAL EXPENSES

We replaced the flooring in House3 ($4,000), hot water heater in House9 ($1,500), HVAC in House10 ($3,300), washing machine in House10 ($250), and HVAC in House12 ($3,900). We also had various electrical and plumbing work that needed to be done in several houses. We also spend about $7k per year in property management fees.

Usually turn over is an area that requires us to put a lot of money into a house. Luckily, the one house that we turned over this year only required some paint work, and we didn’t have any other turnovers.

While it’s nice that our assessments have increased and our housing values have increased in our net worth calculation, it comes at a price. Our taxes have increased on all the properties. In total, they’ve increased over $2,500 in just the one year (meaning, that doesn’t include all the previous years worth of assessment increases that have occurred!).

GOALS

In this year, we hope to add one more rental property to our portfolio. We’ve been actively working on it, but this market is crazy! We’re not willing to overpay on a property and get into a bidding war just to be done with the search. It’s interesting to see that we haven’t bought a new rental property in almost 2.5 years, when we had purchased so many all at once. We had gone back and forth with saving for another down payment or just paying off more mortgages after we paid off House6 in June. Once the cash-out-refi was a possibility, we decided to go ahead with purchasing another property. We’ll self-manage whatever we acquire. We had been looking in Virginia and Kentucky, but have started to settle into a Kentucky property (I like the laws for tenant/landlord relationships better in Virginia) so that we can save the 10% management fee and the expensive leasing fee, since housing prices are significantly higher than what we’d prefer for the rent ratio we’d be getting.

We have 8 houses that still need negotiation and/or lease termination coming this year. Two houses have already agreed to their rent increase, and we just need to get the new lease signed. Five houses will be offered a new lease term with a rent increase (averaging about $50 per month on the increase). One tenant will be asked to leave at the end of her lease term.

We want to remove the tenant from House2 at the end of her lease term. She has been a concern in numerous legal ways, does not hold steady employment, and the house is well under market value rent. Turning over that property will require us to go to Virginia to work on it. It’ll need repainted, the carpet will probably have to be replaced, and I worry that she’ll do some damage when we tell her we’re not interested in renewing her lease.

SUMMARY

I like to look at the details of the rental properties all at once in this format. Sometimes, I get caught up in all the things that I need to get done, and I feel like it’s so much work. In those moments, I forget that there are most days of the year where I don’t even think about the properties. Even when expenses seem to be piling on top of themselves, to look back and see that our expenses totaled less than $15k over 12 houses is encouraging. We’ve also reached the point where we’ve replaced most HVACs and several roofs, which are areas that can create problems that compound on themselves, whereas a replacement is expensive, but then I don’t have to get all the calls that something went wrong.