About 6.5 years ago, we bought our first home – a fixer-upper at a great price. We approached the challenge with stars in our eyes and an adventurous spirit. We quickly learned two things: 1) even when you DIY, repairs can be expensive, and 2) we aren’t DIY people. The latter was an unfortunate lesson, and we now know for any future house purchases not to bite off more than we can chew.
Our optimism started wavering when we got the quotes for our foundation a year after purchase, and realized just how expensive fixer-uppers can be. Three years ago, we poured out a bunch of money we didn’t have to get rid of a rat infestation, and at the same time were notified that they had redrawn the lines and our house was now in a flood plain. We were now required to purchase flood insurance, raising our mortgage about $100 a month. And to just rub salt in the wound, we came home one day to find our house broken into and trashed.
I hated this house. We bought low, but prices had sunk even lower, and because of the foundation problem we couldn’t even sell it. We tried to walk away – just foreclose, take the loss on our credit, and rent for a while. The mortgage company (Bank of America) refused to give us the time of day – we spent hours on the phone over a period of several days, trying to figure out our options. (We were attempting a deed-in-lieu or a short sale.) We were so discouraged and unsure about what to do.
We ended up staying. Honestly, those were dark days and I don’t care to revisit them long enough to figure out what our reasons were at the time. We stayed in this house with all its problems, and honestly I felt miserable here. I stopped inviting anyone over. I struggled to find the motivation to clean it, and I dreaded cooking in our small kitchen that was so closed off.
I stopped writing in the blog because we stopped making improvements. We no longer put money into anything except repairing broken things. We treated it like a rental house.
But, time was on our side. We bought right after the housing bubble burst, so we just needed to ride it out until the market improved. And, finally, it improved. I kept a close eye on home sales in our neighborhood and when prices were high enough that we could break even, we decided to sell. We contacted a few real estate agents, namely trying to figure out what our options were as far as selling without fixing the foundation. We actually had an investor make an offer, but the sale ended up falling through.
Around this time, we started looking at rental houses since we were frankly over home ownership and we were unlikely to make enough profit on the sale to afford a down payment. After visiting a few, I quickly realized that we were looking at renting a house that was smaller than the one we owned, with a rent significantly higher than our mortgage. And with 3 kids and homeschooling, space was a big consideration. We began to wonder if selling was the best idea after all.
Several years ago, a friend of mine (Kacie) had told me about an FHA renovation loan called a 203(k) loan. I’m going to go into more detail about it in a future blog post, but it was our best chance at getting the funds to fix the foundation. We began to talk – what would it take to make this house worth staying in for the forseeable future? I gave Paul my list:
– foundation repaired
– new double-paned windows
– roof replaced
– new HVAC unit
– replace all the pipes
– major kitchen overhaul
The next part of the story involves a lot of paperwork, phone calls, bids, and appraisals, but in the end we were able to secure the funds to do all of those things.
We started renovations in August 2015 and they finally finished in early December. The conditions of the loan required us to hire a general contractor, so no chance of DIY, but we cannot be more happy with the finished product. It feels like a different house.
It’s been a long time coming. I’m so grateful that we were able to do this. There’s been a major improvement in our quality of life living here, and I’m finally inspired and excited to really put those small touches that make a house a home.
I chronicled the renovation process with many pictures, so I’ll be collecting those and getting descriptions typed up in the next few weeks. I still need to take official “after” pictures (I was waiting for the Christmas decorations to come down), but I’m really excited for the big reveal! So, stay tuned!