Living Unencumbered

The Real Estate market has always appealed to Adam and me. We want to be investors in Real Estate as well as own our own home, and since we have been in Greenville, we have been shopping for houses to rent, flip, wholesale or call home.   The market in Greenville is ON FIRE, and while that sounds like good news, the bad news is that everyone else is shopping too – People whose pockets are a lot deeper than ours. We’re just the little guys trying to put our savings to good use, but bigwig investors are lurking in the shadows, waiting to sweep up our dreams at every opportunity.

We have walked through approximately ten houses that were listed on MLS. We would see them at 8 am on the morning they were listed, and by 5 pm those same houses either already had several offers or were under contract. People are doing paperwork in driveways on the hood of cars to get their bids in first. In this market, it is imperative to act fast. Blink once, and it’s gone.

Knowing this, we try to look at every house as an education and keep our hopes in line with the market reality. We are learning about ‘comps’, the difference in renovating for the purpose of renting versus living or renting, and the past, present and future stories of various neighborhoods. The more knowledge we can obtain, the better our discernment in choosing an investment and recognizing it’s potential for growth. When the perfect deal pops, we want to seize it. Well, on a Tuesday afternoon not too long ago, the “perfect” deal popped.

Tuesday nights are typically our date nights. Date nights are sacred, so when Adam delicately asked if I wanted to view yet another house instead of our planned picnic, I rolled my eyes and made some comment alluding to, “It better be worth it.” I knew the importance of not waiting until morning. The pictures were promising, and the price was so low, we could actually afford it.

Me: “Baby, if this house is as good as it looks, are we ready to move on it? I don’t want to sacrifice date night for another learning opportunity, but for a home, I might.”

Needless to say, we viewed the property at 7:00 pm, and in minutes, we were hooked. Nestled in between the Brandon Mill (currently being renovated into a multi-use property with loft apartments) and Greenville’s West Village art district, the location is PRIME. Larger than traditional mill homes, it is a 3 bedroom-2 bath with a second floor open loft. With a cottonwood tree adorning the side yard, it sits on a corner lot across from a Baptist church. The street is quiet while being within walking distance to nearby art studios and coffee shops, boutiques and salons. This was a no brainer. Listed for $41,000, we had to get home to draft a contract.

Yep, forty-one thousand dollars was the sticker price. In 2010, it sold for $57,000, and all the comparable properties sold within the last year range from $60k – $90k.

So what’s the catch? No catch, but some things need clarification.

1. Obviously, we’re not in San Diego anymore!
2. This is still an “up and coming neighborhood.”
3. It’s a foreclosure owned by Fannie May, and there are rules.
   • All offers submitted within the first three days will be rejected. Still don’t understand this one, but nevertheless, we waited three days.
   • The first 21 days on the market are reserved for offers from owner occupants. i.e. this is not one to turn around and flip in a month. The buyer must live in it for at least a year. This is an advantage for us, giving the ‘little guys’ a chance, since most likely investors wouldn’t be willing to live in a shanty 3-2.

Ok, bring it Fannie May. We played by the rules, pulled our pennies together, and offered to pay cash, CASH. The DREAM: a world where I get to pick out paint colors, play hostess for parties, purchase a puppy, and NOT PAY A MORTGAGE (clearly the definition of being unencumbered!) Surely, this listing came from heaven and God is just like, giving it to us. Yes. That’s definitely it.

We waited patiently for three days to roll by before our real estate agent submitted our proud offer. Hours later, we were notified that our contract was not the only submission for the property, (shock) and we had until Monday morning at 8:29 am to submit our “highest and best” offer.

Highest and best. Offering the full price in cash was not good enough. Now it’s a gamble. What are we up against? Did they also offer cash? Did they offer more? How much more? We could drive ourselves crazy playing mind games, but there is no way of knowing. We had to evaluate just how much this house was worth to us.

Since the house had to be owner-occupied, we planned to live there for at least a year and then find good renters and hold the house as an asset. Since we would be the ‘owner-occupants’, all the paperwork would have to be in our name. So even if we wanted to take out a loan to make a significantly higher offer and secure our place in the game, we couldn’t. Banks don’t look favorably on those that are unencumbered (unemployed), so cash was really our only option.

We did the math. At $41k, the house needed some love before it could be move-in ready. After taking our total amount of cash we could liquefy and subtracting the costs of minimal renovation, we took that amount and submitted our ‘highest and best’. If our offer was accepted, we knew that we would still be buying under the market value, and if it was rejected, we could rest easy knowing that we truly offered our best.

Monday came and went. We heard nothing. I needed to know. I was anxious. Did we win the house or not. It felt like a game, and in this market, even more like a gamble. Would we be spending June and July sweating out a house renovation? Painting walls, refinishing wood floors, mowing lawns, and playing with a new puppy??! I was already arranging furniture in my head and setting tablescapes with china that I’ve never been able to use. Unpacking wedding presents for the first time and reuniting with our belongings that we parted with in September – Talk about Christmas in July! We would have a place to call our own for the first time!

Then Tuesday came with an email that read, “Game over. You lose.” Ok… It actually read, “Your offer was rejected, and we won’t know any further details until closing”. But it felt like Game over. You lost the house. The end.

That’s it, the end to our little story. We lost the house, and we don’t know what, where, who or why. We have found that in order to not go insane, we must look at life in all its moments, the wins and the losses, as learning opportunities. We love a good learning opportunity. Here is what we are learning through this experience.

1. You are not always going to win. Sometimes you lose. Not everyone gets a trophy, because where is the joy in winning if everyone else is doing it? When you do lose, think of every loss as a guiding light leading you to your big win.
2. You don’t always know what is best for you. (Parents everywhere applaud.) We are merely human and are often misled in our thinking and wanting, and if this hasn’t occurred to you yet, my guess is that you are in middle school or in desperate need of self-reflection. Think about it. I’m sure there has been one instance (or two or twenty) in your life where you thought you wanted something/someone SO MUCH, but then something/someone even better was just around the corner. What we see and know is through such a small scope; Adam and I trust that God sees the bigger picture and actually does know what is best for us. Unfortunately, we do not have a follow-up story to a bigger and better and even more affordable house (yet). This house seemed absolutely perfect for us on paper, but we believe that He’s in control and that His ways are above ours. So we’ll wait for His timing and His direction, and in the meantime I (Liz) will practice patience. My least favorite thing to do.
3. One fail does not equal a dead-end. Someone once told me that there is always another house. In our case, it’s a house, but whether it’s a job, a trip, or even a relationship, there is always another fill in the blank. Don’t see one disappointment as a dead-end. See it as an opportunity leading you to something different. It is the end of one endeavor, not the end of the world.
4. Celebrate now and refocus. Finally, when you don’t win the house, the car, the scholarship, the grad school, the girl, whatever it is – Take a deep breath, and celebrate what you do have. Right now. In this moment. We spend so much time wanting more, more, MORE, but thankfulness is the epitome of true joy. So, count your blessings and refocus your efforts. When you do try, try again, you want your energy to come from appreciation, not desperation.