First off, these are the FINAL show pictures of our one bedroom. Our realtor paid for someone who specifically takes real estate photos -- if you want your home to essentially sell in 36 hours and nail it out in a champ with one open house, this folks is the way to go... If your in orange county and the surrounding areas and you need a real estate photographer, I highly recommend Antis Photography. I know the owner, she took these herself and she's amazing.
Now, if you want to remember what this place looked like 8 years ago when I bought it, you can check out that post:
Back in March, we updated everyone on our current Mortgage payment and everything we had spent on the condo up until that point. So, if you would like to reference all the money we dumped into that unit in the almost 8 years we held onto it, check out the post: March '17 Mortgage Update.
After spending $7,057.08 on a down payment and closing costs, I initially dropped $17,672.29 in remodel costs, leaving me $24,729.37 in the hole on day one. Between then and December of 2016, I manged to turn a profit of $3,274.84 on the property without factoring in equity.
How'd we do that?Government buying incentives (Thanks Obama for that $8K), savings we recorded from itemizing our housing expenses on our taxes (this was just the difference we got by itemizing instead of the standard deduction -- yup, did my taxes twice those years so I could track just what we got above basic deductions), and by using a comparable rental unit to factor in the costs we would have paid to rent instead of just paying our mortgage and repairs to the place. If we were under, we deducted that amount from the "hole" as savings since we would have spent the money to have a roof over our heads.
- If you recall, I purchased the condo for $120,000 at "near" the bottom of the market when the housing industry crashed. It was a bank owned foreclosure in bad condition. Over the years we made modifications to the property and tracked all of our expenses and compared them to what we would have paid if we rented. We also factored in when we paid additional amounts of principle as expenses to make it a true apples to oranges comparison. If we spent money, we recorded it as an expense.
Below are the costs associated with the property in 2017 that weren't factored in to our March statement:
- Wall texture/Dry wall patching in Kitchen: $300.00
- 2 months expenses on a storage unit for staging: $325.00
- Electrical and bathroom GFI updates to sell: $99.27
- Professional cleaning: $145.00
- Paint, moving boxes and materials: $375.60
- Uhaul fees: $118.93
- HOA Document Transfer Fee: $529.00
- 5% Commission:$14,000.00
- Mortgage Balance Pay off :$83,509.22
- Interest on loan up till pay off: $214.49
- Statement Recording fee to pay off loan: $30.00
- Recording Fee: $9.00
- Re-conveyance Fee: $45.00
- VA Loan Non-Allowable: $1,000.00 (We may get some of this back)*
- Hazard Fee: $74.95
- Title Insurance: $717.00
- Sub Escrow Fee: $62.50
- Transfer Tax fee: $308.00
- Notary: $15.00
- Escrow Fee: $835.00
- Processing Fee: $275.00
- Wire Fees: $70.00
- Messenger/doc fee" $75.00
- Taxes: $105.00 + $34.65
All in all, after closing costs, we walked away with $179,028.33 in PROFIT.
But it gets even better. Between January and June of this year, we spent $6,936.98 between our mortgage and property taxes. During the selling process, we learned our 1 bedroom unit would have rented for $1600 a month! If we use that as our rent comparable for the year, we would have paid $9,600.00 in rent for 6 months -- saving us $2,663.02 just by being owners...
So that leaves our final walk-away growth was $181,691.35It was hard to say good bye to my first true home, but it was also the right time to do it.
We sold it to a single mom who is a Navy Vet. Buying our place cuts her commute in half each day and we finally have a room for our son. She is also a chef so our kitchen is a dream come true. She never expected to find a kitchen like that in a condo.
It's bitter sweet to say good bye --- especially since we are walking into another fixer upper, but this unit is in way better shape then the last one and we have set aside $35,000 to help us make improvements.
Some of the money is what was left over from the sale that we didn't use to cover closing costs or our VERY LARGE down payment. (I'll do a separate post on our purchase with the numbers.)
The other amount came from SCB's parents. They have given us a most generous gift to aid us in the home purchasing process so we did not need to use our emergency fund to put down any earnest money.
While we didn't need the funds to purchase or use towards a down payment in the end, they are happy to see us spend the money on improvements and appliances.
They offered us the gift a year ago actually, and we told them we would accept it when the time was right. I wanted to make sure we could afford to purchase without the gift so the gift would be there to either help with repairs, or to allow us to get the right home if the market continued to rise in price... (which it totally did -- at the end of fall '16 we figured we'd buy a unit in our complex for $290k to maybe $300k -- not $324k... but we never dreamed we'd get $280k for a 1 bedroom without a garage!)
Any who, we accepted their gift because it's a no strings attached gift. We can choose to pay it back, or keep the money. When they do their estate, its just listed that we received the money. If we pay it back, it gets an updated that we paid it back.
They have done this in the past with their other children when they were making large financial changes. Some paid it back, others have kept it and were blessed to receive it. Over the course of the year prior to us taking the gift, they have ensured me to the ends of the earth that it is not a loan and it will never be mentioned again and I believe them.
I won't let money ruin family, so take my advice -- never borrow money from family but gifts, when they are truly gifts, are blessings. It's taken me a lot of growing up and letting go to be in a position to say, "okay, I'll accept your help" and it feels good to let my in-laws help us out in this way. It's something I never imaged a parent would do for me.
We do hope to pay back their loan over time, but it won't be an initial priority since our cars are starting to show age and we are still paying $900 a month for daycare. If we have a second child, repayment will be delayed, but we have been truly discussing the 1 and done methodology.
So there you have it folks!