So as you may remember, I successfully completed a No Spend Year for 2019 with only purchasing sunglasses and nail polish off my banned items list. It was so effective in resetting my financial values, that I decided a second year would be an amazing idea.
So here we are, just about five months in, and I am wanted to give an update. Almost 18 months without buying any clothes, shoes, accessories, makeup or haircuts/dye has been life changing for me and really helped me better understand what I truly value. I’ve noticed something else lately though. Things are different today compared to my decision in January to sign up for another year of this. To be honest, I think this is one of the best things I’m seeing come out of this whole pandemic stuck in your house for the rest of time thing. It seems people I never would have imagined have stopped buying stuff and things. I’m seeing people not wearing makeup and also am starting to see the home haircuts and dye job pics showing up in my social media feeds. While I’ve been doing all of that for a while now, I get that my No Spend Challenge was a choice and others have had the choice made for them. With stores and hair salons being shut and stay at home orders put in place it’s forced people to not buy these items or services, but I’m thinking and hoping there may be some changed people after all of this is over.
So I think now would be a great time to declare a No Spend Challenge in your own life through the rest of 2020. Especially since there’s still so many uncertainties with how long all of this will last, may as well set a goal to see how long you can not spend money on certain items and what you can do with that money instead. You may also find that cutting your own hair isn’t so bad, maybe even rewarding, and I bet nobody has left your house and never returned over seeing you without makeup. Also, the clothes you have are getting a break right now, so they will be like brand new clothes once you get out of those pajamas when this is all over. Who all has changed their spending habits during the past month already?! Who’s ready to commit to doing it for the rest of the year?!
We were so excited to have our renters move in last week, and we will be receiving $1100 a month in rent for this one. I thought it would be a good time to walk through what we learned on our first BRRRR and full interior remodel. We picked up the Indy Beauty from a wholesaler right before Christmas for $37,500. It was full of junk, a few squatters and smelled terrible, but was also full of potential, and we couldn’t be happier with the end results.
Here’s the before walk through video as a reminder of how dark and dingy it was.
Here’s a few after pictures from our rental listing
The whole renovation took about 60 days, if you take holidays and bad weather into account. We used a General Contractor to manage the interior renovation and oversee any work, and we used our own subs for the exterior work. There is no way we would have been able to handle a project of this scale on that timeline, so we were happy we hired it out.
Not only was this our first time purchasing off market from a wholesaler, it was also our first time using a hard money loan. Total renovation and holding costs for the hard money loan we used came out to be a little under $50k. This covered a six person three day clean out project, complete interior remodel including new flooring in kitchen/bath, refinishing the existing hardwood and cabinets, exterior painted, new windows, new appliances, HVAC, and electric panel (sure I’m forgetting something). We also did some extras to help reduce any maintenance or expenses in the foreseeable future, such as replacing sections of the fence, trimming all trees, removing several, and installing automatic garage door openers.
Since this was our first time working with a hard money loan, I wasn’t sure what to expect, but it was pretty easy. We closed on the home in under two weeks of looking at it and it was easy to get the renovation money. We had to put 10% of our own money down for the hard money loan, so right around $8,000. We had a 50/40/10 arrangement with our contractor, so our lender needed a statement of work upfront and then did a walk through at the 50% mark and we received the funds wired to our account same day. I will say the hard money lenders definitely make a profit, so we will also do a better job next time looking at a few options and seeing if we can find one with better rates or look at private lending options. Luckily, even with the high fees, the numbers still made sense on this house, even with us going a little over our initial renovation budget.
So, if you’re keeping track of the BRRRR, I’ve covered the buy, rehab and rent piece so far. We were using a private lender to do our 30 year cash out refi, and had completed all of the paperwork, jumped through all the hoops, and were just waiting on the appraisal, which was scheduled for this past Tuesday. Well, the appraiser didn’t let us know he wasn’t coming and just didn’t show, and then an hour later, we got an email from our lender that they are pausing their 30 year cash out lending program due to COVID-19. So, well, that was a really really frustrating email to receive. BUT, it means we now just have to wait until June, when we have owned the home for 6 months, and will use our traditional lender and look to be approved based on us as borrowers opposed to off the asset. (as long as they are still doing investment property loans..who knows with all the craziness going on right now what the world will be like in June)
So we have two things that are currently out of our control left on this one. 1) The appraisal-we need it to appraise at $120-125k for us to be at a 75% LTV to pull all of our money out and pay off the hard money loan. This is in line with other homes in the area, and ours has some extras, such as a huge corner lot, unfinished basement, and a detached garage. Worst case scenario, if it appraised below or the housing market crashes between now and June, then we would just end up keeping some of our own money in, right around $10,000 of our own or possibly more if it appraises super low, which we are comfortable with doing if needed. 2) Being able to even get financing. I’m just not sure how the current state of the market and the pandemic will impact cash out refinancing for investors 90 days from now. Assuming they may tighten up their requirements or may want to steer clear of cash out refis all together..who knows. So all we can do at this point is just wait and see and be prepared for a worst case scenario. This will put a hold on our goals of buying a few more houses using the BRRRR method for the time being, but we will be ready to purchase again when it makes sense.
In summary: Purchase Price of $37,500 and Renovation/Holding Costs around $50,000 for a total of $87,500. Hoping for an appraisal around $125,000 and currently getting $1,100 a month in rent.
How do you think we did or what questions do you have for me about the process?
Nobody likes listening to Linda talk about her travels to literally wherever she wants whenever she wants when all you can afford is to travel your ass to the couch in your living room. So let’s stick it to Linda and become world travelers if for nothing else but to have stories for Linda at the water cooler on Monday. Here are the 3 things that matter the most when considering your travel strategy.
1. Where you go matters. It also matters what time you plan to go. For example, some of my favorite trips have been to the mountains in the off season, like early Fall for hiking. Everything is reduced usually, including cheaper flights, AirBNB rates, and even those trusty Colorado souvenirs you want to pick up. So a good key is, if everyone else is going to this same place at the same time, don’t be like everyone else. Also, just because Linda is spending three weeks hiking in Rome, it doesn’t mean that your trip is less travely if you pack up the car and take a quick long weekend road trip to the next state over. Travel is travel is travel and it’s about experiencing something new, not about a competition of who can get the farthest from the zip code they reside in.
2. What you pack matters. I once made it to Jamaica for a six day trip with only a carry on. Being intentional with what you pack will help with expenses and time. (no extra bags or overweight charge, or maybe a smaller car is ok to rent without oodles of luggage) Don’t be afraid to pack one pair of jeans to wear multiple times or leave those super uncomfortable six extra pairs of shoes at home and pack that one pair you know will get you through site seeing blister free. Now that you know what to leave behind, let’s pack the essentials. A reusable water bottle is a necessity, and just make sure you empty it out before security. Now, if you are traveling, you can save a TON by packing some snacks and quick meals. If we are road tripping, we bring things we usually don’t eat, like chips and a loaf of bread and peanut butter for easy sandwiches. Grab some travel ready fruit like apples and oranges and some baby carrots and you have several meals and snacks. Yes I know Linda is posting all her gourmet meals on Insta, but remember, you can go out to one or two quality meals to experience the local cuisine and totally get the same foodporn ammo to post..just cheaper and likely a bit healthier also. (Linda leaves out the part about that 5 extra pounds she brought home as a souvenir)
3. Where you stay matters. Find a place that jives with your agenda nicely. If you are just looking for some time to chill and enjoy a nice hot tub or swim and don’t have a rental car, then maybe a hotel makes sense. If you will be out soaking up all the free local attractions, then AirBNB on the outskirts of the city will probably be a great fit. You can pick a place based on amenities and the proximity to what you want to do. Closer isn’t always better, especially on the budget. But if they have free breakfast, dinner, coffee, and tea, well then, it may in fact be a great choice. Or if you are bringing stuff like we do, then make sure you have a kitchen area to prepare those on the go meals. I know Linda only stays in 5 star all inclusive resorts, but let’s remember kids, you are paying a premium for all that inclusion, even the stuff you won’t be using. So give a no inclusion, off the beaten path, quirky little cottage a try and you may discover that it’s even more enjoyable.
What is it that you are looking to get out of your next trip? For me, traveling is always a time to unplug, explore, try new things, and spend quality carefree time with my family. So regardless of where you go, how you get there, or what you bring, don’t be like Linda. Be unique, and don’t lose site of your why. Safe Travels!
Man..it’s crazy to me that it’s 2020 and there are still folks running around rogue with their finances, thinking it’s not going to catch up with them. Several recent studies show that only about 40% of people are living that budget life. 😱
I have personally been living with a budget for over a decade, and I can promise you that this is one of, if not the biggest contributing factor to my current debt free and wealth building chapter of my life. I would definitely still be living beyond my means without a budget.
There is no better time then right now to put the money you make to work..and that money isn’t going to get to work without your help. So do me a favor, and if you are in the 60% of people who don’t currently budget, then make a pinky swear to yourself to start ASAP…after reading my quick tips of course. 😉
Tip 1-Live off of a zero budget. That’s a fancy way of saying that every single penny you have incoming should have a home for where it needs to go. The key to this is to assign your money jobs BEFORE you’re eyeballing that delivery menu on an empty stomach or you’re clicking on that BOGO sales ad that just landed in your inbox. So a few days before the month starts, you can sit down and map out your incoming vs outgoing. Mind that gap with some investing and savings. Which brings me to my next point.
Tip 2-Have a goal you are working towards. Whether it’s building your savings up, paying off debt, or investing in index funds to work towards financial freedom..you will be more successful minding the gap if you have short term and long term financial goals in place. Don’t let lack of planning cause you to live with a YOLO mentality..it’s true..you only live once..so get your shit together already. Nobody wants to keep hearing your “I’m broke and just barely getting by because they don’t pay me enough” talk, yet you’re driving a new car, eating out, constantly getting new clothes/AmazonPrime packages and texting your money problems on the latest IPhone. (sorry for being a little harsh..but seriously..someone had to say it)
Tip 3-Speaking of planning..plan for the unexpected. I’m talking about having enough in your savings to cover a bigger item, like a new transmission, your HVAC suddenly breaking down, your car insurance deductible from an accident, or taking your dog to the vet after they ate something crazy again. I don’t have time to get into details here on what’s considered unexpected, but if you have to ask if it’s an emergency..it’s not. Also, stuff that is recurring, like personal property taxes or Christmas gifts are NOT unexpected. You knew all damn year they were coming up..you should have separate money you’re putting back to plan for these annual recurring expenses.
Tip 4-Check for trends and opportunities. For example, if you are noticing a large chunk of your money is going towards gas, then it might be time to explore a more fuel efficient ride. If you are spending over $100 each time you hit up Target, then it might be time to keep your ass out the store. Luckily, there are other ways to shop now, including carryout or delivery, so that could possibly help keep you to the items you need vs want. Also, if you find yourself doing a great job, like going two weeks without eating out..then celebrate. Rewarding yourself (within reason) for good behavior is a great way to train yourself on new spending habits.
Tip 5-Give yourself a cash allowance. Let’s be honest..little things come up and having some cash on hand is a great way to take care of these little things. For example, if you slept like crap and really NEED a Starbucks latte..go get yourself one. Or the neighbor kid hits you up for buying some Girl Scout cookies, and nobody can say no to those Caramel Delights, nor should they say no. Much like crash diets, budgets don’t work if they are so strict that you feel deprived, week after week, month after month. This will make you more likely to fall off the budgeting bandwagon, so plan to allow a little flexibility sometimes.
Tip 6-Make it easy. Budgeting is a long term wealth building strategy..not a get rich quick scheme..remember that as you set things up. Keep it simple and keep evolving as you and your needs change. Setting up autopay on everything is about as easy as it gets for your fixed expenses. Also, for tracking, I used a paper check register up until last year..lol. BUT it was easy and worked for me. Now I have a word doc that lists out all my recurring expenses, along with an app called Spending that tracks all incoming/outgoing expenses. Don’t get so caught up in trying to figure out the details to a point where you don’t ever start. Any way you track is better than not tracking at all..so get to it already.
You know I am happy to share my tracker if interested and answer questions, so ask away.
When you stop and reflect..only to realize you went through the all the previous decades you’ve been in existence without goals, you decide to make up for lost time by going BIG. Not that I have ever really gone small at anything ever, but it’s different. Something about this year reminds me that whatever I think, whatever I envision, and whatever I write down is mine. I don’t have that “one day” or “maybe next year” or “I wish” or “must be nice” mentality any more. I know who I am and what I am capable of and create the shit out of some positive energy. I am not locked and loaded with excuses that “I don’t have time” or I can’t afford it” either. I know that I have time for the things that I make time for and I am in control of my money and tell it where to go.
Last year was just a tiny taste, a sip of what my life can really be like and I’m back for more. I have decided that this will be the BEST DECADE EVER!! I came up with my goals back in December, but since I’m an ever-evolving person..lol..I wanted to give them a few weeks to simmer before I put them out into the world. I am now ready to share, and I have decided that 20 goals for 2020 is only appropriate. My list is below and you know the drill..ask me questions and would love to hear your 2020 goals!!
20 SMART GOALS FOR 2020
Get tenants placed in Indy Beauty by 3/1 and cash out refi by 6/20
Use Self Directed IRA to put 25% down on a multi-family by 9/1
Take childless trips to both the beach and the mountains by 11/1 and let the kids plan spring break trip location and agenda
Hike our first mountain
Obtain my real estate license or shadow and do my first wholesale deal by 12/15
Build-up/Maintain 6 months liquid reserves for all rentals owned by 12/1
Set up LLC by 3/1
Acquire next BRRRR deal by 6/1 to be ready to close by 6/21 (or earlier if the deal finds me..lol)
Have private money lending capital self-funded at 10% of goal to be our own bank by 11/1
Max out family HSA contributions by 12/15
Read 25 books this year
Once I hit 10k followers, give away $1,000 to help someone else towards their financial goals
Coach 2-3 people to become debt free and/or get started in real estate by 7/1
Start researching markets for out of state investments to start 2021 off with a bang
Work towards dinner at the table Mon-Thur (on activity free nights) and at least 1 hour screen free family time Fri-Sun
Expand my meditation practice from 15 minutes up to 1 hour
Learn 3 new skills/hobbies, enough to be dangerous..lol
Cashflow new carpet and exterior paint for primary residence
Analyze food budget and meal prep to find areas to improve health and decrease costs
No Spend Year again!!! (clothes, shoes, accessories, purses, makeup, haircuts/dye)
I am so excited to have recently been featured as a Plum Homeowner..click link below to see my story alongside all the other homeowners featured and a whole bunch of other resources all under one roof..see what I did there 😉
She does such a great job educating women and sharing all the unique homebuying journeys, both the ups and downs. Enjoy!
Because I mean..what’s better than a full damn year of doing a No Spend?! I can’t think of anything except for doing it for a second year in a row!!
Yes you read that right..another No Spend Year for 2020!! If you’ve been busy shopping at the latest BOGO sale or living that AmazonPrime “what’s in this new box” lifestyle, then you may have missed my multiple posts about not buying certain things for all of 2019, along with my updates and all the ups and downs of the journey. I encourage you to look back at my previous No Spend posts to catch up, but I will also summarize here.
I banned buying any of the following items for all of 2019:
Clothes, shoes, accessories, purses, makeup, haircuts/dye/waxing (undergarments and socks can be replaced as needed). I think I added household decor items to my banned list, but I hate throw pillows anyway, so I don’t really need to ban them..lol.
I DID fail and buy a pair of sunglasses, along with a new nail polish, so I wasn’t 100% successful, but I have come a LONG way from who I was before my No Spend Year. I will take the under $15 total for the year versus the $3,000-$4,000 total I was likely spending before per year. It’s also changing my lifetime expenses, which the average woman now spends around half a million dollars in their lifetime on vanity items. 😳 (more to come in a future post on this topic)
I have to say, I was certain I would die when I started this. Well, if you haven’t picked up on it from the fact I’m writing this..I actually did not die. I in fact LIVED..lived like I never have before..completely free of others opinions about my same old clothes, about my hair showing grey or being “slightly” uneven from cutting it myself, or showing my makeup free wrinkly face for a year straight. Damn that shit was freeing and turns out most people didn’t even care or notice the clothes or makeup free face, or at least they didn’t say anything. Now the hair, people had very strong opinions either supporting me and saying they do their own hair also, or telling me to leave it to the professionals. Overall, it wasn’t as drastic of a change for me to ban these items as I anticipated.
I really haven’t lost anything except for the weight of worrying what others might think..and turns out I really don’t give a shit, which honestly surprised me a little (keeping it real..after 35 years of caring to some extent about impressing others, it’s been a big change). What I gained was a LOT..more money in my account, more time since I am no longer shopping or putting makeup on every morning, and a lot of inner reflection on my values and getting comfortable in my own skin. I can truly say that I have never felt prettier or happier with who I am and what I look like, inside and out.
I encourage everyone to try a No Spend, even if it’s for one day or week or even a month. If you can commit for a year, I promise it will change you as a person. One of the joys of a No Spend is that you get to customize it to fit your life and determine your own banned items list. Also, I have a ton of quick tips that helped me and can help you also. First, stay out of the stores all together and keep emails about deals out of your inbox by hitting that unsubscribe button. Clean out your closet to donate unworn items and organize it so you can easily find the items you do love to wear. Take care of your appearance in other ways..drink more water, eat a healthier diet, exercise, and stop damaging your hair with heat and product and let it dry naturally and embrace whatever your natural appearance is. I fought my wavy brown hair for years trying to straighten it, curl it, make it blonder, etc. and turns out my natural hair is pretty awesome once I stopped damaging it. Find friends to swap clothes with for those times you get bored or have an event and nothing to wear. Find a friend or two to join you and help keep you accountable. Learn to fall in love with yourself and embrace your flaws as perfect imperfections rather than trying to cover them up. Finally, make a goal of what you will do with the money you save and put it towards making a big dream a reality and share your progress.
Now I just need to know..who is ready to join me this year?!