The Results are In

Our home appraisal results are in!

After the quoted renovations are completed, market value is estimated to be $425,000 - which is pretty much where we needed to be to get the full budget from the quote out of the equity in our home.  We still very much intend on doing some of the work where we can and putting in sweat equity where it makes sense too - but this is great, great news!

Basement Flooding

Guys...our basement is flooding.

Ugh.

Okay, so we don't have a swimming pool downstairs.  but every time the sun comes out and the temperature creeps up it gets sloshy under the floor.  We can here it squishing in a few spots and it pools in the storage room on the other side of the basement.

We're chatting to my Uncle (a general contractor in town) about our options.  It looks like we can either excavate around the entire house, put in weeping tiles, and a membrane around the outside of the house.  We'd have to take out a few sections of fence, and the very large wheelchair ramp.  Thankfully we haven't planted our gardens, or fenced the whole yard yet (just the dog run).

The other option would involve demoing the entire basement, jack hammering around the walls and installing a weeping tile/sump pump system inside.  Then of course, re-finishing the inside.  The basement is not finished well, so it's not like we'd be tearing out high quality finishings and there were some things downstairs that we wanted to do eventually - make a bigger bathroom.  Plumb for a bath/shower (it's just a half bath right now) and have a bedroom where right now there is just a giant great room.

So...we'll see which option makes the most sense in the spring, but I'd love to hear from anyone if you've had to make this decision.

Rebuilding

It's so exciting now that the demo phase of the renovation is over and we are in full swing of the re building phase.

Our new subfloor has gone in for the kitchen and bathroom, walls have been rebuilt, and the drywall has been installed.

Today, the drywall mudder/taper is going in and then Jordan and I will be able to start painting!  So exciting!

After that the flooring, cabinets, trim, appliances, and final fixtures installs can start happening.

We're still probably 3-4 weeks away, but it feels like the home stretch.

I've been keeping track of every dollar we have spent so far (a little more than $10, 000) and what we have yet to spend (a little more than $35, 000) and am looking forward to sharing the breakdown with everyone soon.

We are saving where we can.  A few of our projects are:

• Painting the cabinet doors ourselves (they are raw MDF)
• Cutting, painting and installing the trim
• All painting
• Installing fixtures

Plus, we did all of the demo, and have done all of the runs to the dump.

Renovation Budget Update

So much has been happening with the house since my last update.  We've met with our general contractor (my uncle), several times.  We've met with the plumber and electrician, and started spending $$ too.

Here's a break down of what we have spent so far.  This does not include any of our general contractor's labour, plumbing or electrical labour which will be the biggest expenses.

The green highlights are confirmed prices, and the orange is what has been actually spent.  Some things just have deposits on them, which is why there is spending in both categories.

Building in rural Canada isn't cheap, but it's going to be done well and we're excited about that.  We're doing as much as we can too - to save $$.  You know that Jordan and I have done all of the demo, and we're also doing all of the painting.  We'll be painting our cabinet doors and trim too when the time comes.

We're so excited!

Renovation Update: Demo!

It has been a busy couple of weeks since we started demolition of our kitchen and bathroom.

Here's few photos to show you what we've been up to.

A shot of the dining room and kitchen

Bathroom after the vanity was removed

Bathroom - 3 Layers of Flooring!

Bathroom, ready to start rebuilding

Possession Today!

Today is possession day, so I thought I would share a few pre-renovation pictures of the kitchen and bathroom.

Bathroom....dark, curtains for cabinets, and shower in a cubby

Kitchen...no cabinets, weird fridge cubby, two doors, two windows

The Final Deal

So it's been a busy couple of weeks since we placed an offer on the new home here in small town British Columbia.  Given that it's actually the third house we have tried to buy, we didn't want to make a big deal out of it unless it was going to happen for real...and we're here, it's really happening.

So, what was the final deal?

It was listed for $289,000, and we settled at $279,000.

We started our offer at $264k, they countered at $284k, then when went to $269k.  Next they came to $281,500 and we countered at $273,000.  They came back at $280, final.  That was hard because we didn't want to go more then $275 - so our agent went back to them and asked if they would meet in the middle of our 'finals'.  They came down another $1,000 and we took it.  The $4,000 difference wasn't worth losing the house and only translated to a $13/month difference in the mortgage payment.

The bank appraised the property before approving the mortgage and the value came in at $280,000 - so we felt really good about that and where we wound up.

Oh?  So what did that buy us?

A three bedroom, 1.5 bathroom bungalow with both an attached single car and detached single car garage.  The main floor has 1800 sq feet of living space, and the basement as another 1500.  The lot size is the biggest we have seen in over a year of looking at 100 x 120 feet or .275 of an acre.  It has the space we want for dogs, gardens and kids.

Both the kitchen and main bathroom need renovating, but that's a post for another day.

Inspection Update!

Here's another view of our *finger's crossed* next house.  

The inspection was the middle of last week and here is what we learned....

It's a good, solid house!  The inspector said he was actually surprised that he didn't find anything huge wrong because of the age.  It was built in the '50s and then was renovated sometime in the 70's and again in the '90s.  There are absolutely some things that need to be addressed, but not deal breakers.  Some of the priorities are:

- Replacing a cracked window and the remaining single pane window

- Repair a few loose edges of the tin roof

- Repair the chimney.  It's no longer in use, but to prevent bricks from falling down we should address this.

- There is a set of stairs that goes no where that we can remove.  We think these concrete stairs were left behind from one of the previous renovations as it no longer goes to a door.

- Repair some chips/cracks in stairs, pathways and driveway

- Fix the automatic door opener in garage.  There is currently no power going to the outlet for some reason.

- Attached garage man door needs a self closing devise to ensure no fumes get from the garage to the living areas.

- The grading around the house is either flat or has sunken in in some spots, so we should build that help to prevent water from getting in around the foundation.  There is also no gutter/downspout system which is apparently typical with tin roofs, but also something we could address to help manage water accumulation.

- Ceiling has an r value of about 32 for insulation - we could increase this, but no rush.

- There is no range exhaust it the kitchen, but we plan on renovating that anyways.

- The bathroom fan blows into the attic, also a problem but we plan on renovating that room as well.

- The dryer connections aren't on tightly so lint is blowing into the basement - easy fix.

- The stairways to the basement have some variation in height that are no longer to code.

- There are some old vinyl tiles that may or may not have asbestos which is common for this age of house.  We'll have to manage that carefully when renovating.

- The second electrical panel is mislabeled because of it's age - this could be addressed by an electrician for clarity.

- Replace the smoke alarms as they expire every ten years - just to be safe.

- Invetsigate plumbing as the pipe leaving the house is above ground for a foot or two which is a freezing hazard in the winter - though the current owners have never had a problem with it.

- Some very minor cracking in the foundation could be investigated further but no immediate concerns.

Phew!  Ok, writing it all out makes it seem like a really big list, but it's really not.  We felt really good about the inspector, and believe he did a thorough job.  Now to build the 'want to fix list' ....there is a lot of paint in this houses future.

Appraisal Update

Here's what might be our next house!

The appraisal is in and it came back better then expected considering our experience with this appraiser on the last house.  Our accepted offer on the house is $279,000 and the value came in at $280,000!!  Woohoo!

Conditions....

So, we've put in an offer and it's been accepted buy the seller.  Now we need to work through the conditions to see if we're going to close on the sale.  They are:

1. Insurance
2. Financing
3. Home Inspection

We had a hiccup with Insurance already that's been worked through.  The house is zoned for both commercial and residential.  At first, the insurance office told us that if we had a total loss on the home we would have to rebuild a commercial enterprise.  After reading the bylaws and a meeting with the town planner, we discovered that the Insurance office was not correct.  We're going ahead with quotes from that, and the other office in town (there are only two).  We have a big list of questions about the house to see about insurance - age of hot water tank, roof, etc.  Hopefully the home owners can get some of that for us and we don't have to wait for the inspectors opinion for that piece.

Next up is financing.  We're pre-approved for the mortgage, but we're also after a renovation loan of about $25,000 for the kitchen and main bathroom.  They need work!  The kitchen is a series of four bargain basement Ikea sections with no upper cabinets in a tight Gally flow.  The bathroom has a curtain for a cupboard under the sink.

Last is the home inspection, which will run us about $900.  There are no current inspectors in town, so part of this fee is travel to bring someone in from out of town.  That is scheduled for about a week and a half from now - just days before we have to waive conditions (the 22nd).

Cross your fingers for us!

We're trying to not get our hopes up, and are anticipating some issues with the inspection - we just hope they don't find any deal breakers.

Foreclosure Sale

With the pending closing of the sale of our house, Jordan and I have been on the house hunt again...and we've just found a diamond in the rough that we're going to put an offer in on.  It's a bank foreclosure sale, so comes with some complications.

There are multiple offers going in, and no offer can include any conditions.  That means no conditions on financing, or inspections et.  The first offer has been accepted by the bank, so now it and any other offers need to go before the judge to see who will be awarded the sale. There are tenants in the house that will need to be evicted, and, the sale is going to happen before our house closes.

hmm...what else?

Well, we got in to see the house last week and it's a MESS.  It poses both the advantages of being sold at a price where all of the renovations we would do will bring the property's value back up to what it should be whereas if we bought a house that we wanted to do some cosmetic/preference changes it would be money spent that wouldn't really impact the value.

The house is within a stones through from a school, and a small convenient store.  It's nestled high on a bank that provides a beautiful view from a wraparound deck.  There's a large six foot fence that surrounds the .8 acre space.  A large garage/shop that is in really good shape (better then the house).  It has a lot of positives that make the prospect of doing the major reno completely worth it.

....

So I was really excited when I wrote all of that and it was just when we decided to put the offer in.  Well we found out on Thursday that we lost the house.  Another bid came in just $1,166 more than ours - I can't help but be so disappointed.  Jordan was doing such a good job of being analytical about it and I let my emotions get involved and started fantasizing and planning with what our lives would lookalike on that little big piece of dirt.

Ahh well, on to the next house.

It's Official

No, baby's not here yet, it's official that we have listed our house in Alberta for sale.  We were holding on to it for a while because it looked like one or two of my cousins might be interested in renting it for a while - but that fell through.

After many conversations amongst ourselves, and our Real Estate Agent we thought listing now made more sense then taking the risk of unknown tenants for a year and unknown market conditions a year from now.

Selling our first home while staying with my mom will give us the opportunity to pay off a little bit of debt and keep the rest liquid while we continue to save. The intent is that when we're ready to buy again, we'll have that ever elusive 20% down.

That does mean however, that we have a full house full of stuff that we need to deal with when it does sell (and a few small trailer loads of stuff we have to deal with now).  So, we've decided to buy a storage container.  It's 20 feet long and 8 feet wide and will be big enough to keep all of our furniture and belongings safe that we don't have in my mom's house.

The container was $2,200 and delivery is another $800.  So the delivery cost is sunk, but the container itself is an asset as it can be rented or sold afterward.  We thought this made the most sense rather then renting storage space (which is at a premium in the small town we're in right now) and would all be sunk.

Wish us luck in finding a buyer!

More News!

So not only are Jordan and I expecting a baby, we're also moving!

We've had an offer accepted on a little 1960's bungalow in my home town and are just working through financing, a renovations budget, insurance, etc. before we waive conditions.  We're going to be selling our home here in Alberta, and I'm in discussions with my employer about the possibility of working from home/telecommuting in some way.  It's too far away for my boss-lady to be able to commit, but I'm very hopeful we'll be able to work something out.

That's right, we're buying a house, renovating it, and having a baby all this fall!  Yes, we're a bit crazy - but we're so enjoying this adventure so far, and looking forward to sharing it with all of you.

Jordan has already moved to BC, and is staying with my mom until the new house is ready (my mom is pretty awesome that way).   He's got a fantastic new job that he actually applied for over the Christmas holidays when we were in town visiting which is still in the automotive industry.  He's been enjoying it so much, and got a bit of a raise to boot!

Mortgage Payments

It's so so sooo tempting to increase our mortgage payments - but with the loan sitting at 3.39% and our Escape at 6.90% - it's hard to justify that over the Escape.  But now that we've changed our payment scheduled to accelerated bi-weekly, I don't like seeing that the amortization has gone up.  Here's some scenarios for what we could do.

Our current payment is now $770.22/bi-weekly and we could increase it as high as $885.75.

We could drop from 24 years amortization to 15 years, 6 months....from being 53 to 44 years old w/out a mortgage.... wowza!

...but what would we have to sacrifice now in order to do that?..For each of these scenarios we would need to come up with $29.78, $54.78, $79.78, or $115.53 bi-weekly.

 Do you see where it could come from?  Here's a snapshot of our current monthly budget and our debts:

 

I should  mention...just in case there's anyone new reading along - that this monthly budget is based on Jordan's salary with no commission.  I can't budget fixed amounts for that - but it's how we intended on reach the rest of our planned saving/spending goals.  We also intended to continue to pay of the LOC, and Escape using commissions.

oh!

One last thing.. in case your interested....the interest rates.

• Kia Rio - 0%
• Mortgage - 3.39%
• Line of Credit - 5.49% (unsecured, and tied to prime)
• Escape - 6.90%

Home Value is Up!

I didn't show it in my Networth post yesterday - but Jordan and I have more good news on our overall net worth.  Last year we connected with a real estate agent and found that on the market our home was worth $377,000 - we connected again this past month and found that on the market our house would be listed at $390,000!

Our tax assessment came in as well, and it went up from $328,600 to $363,200 - which validates the increase in market I think (if it had gone down or was the same, I wouldn't be as confident in the real estate agent's opinion).

$7,900 in Teeth

Jordan was born with two congenitally missing teeth - every since he was small; his benefits have only provided for a flipper/mouth piece that give the appearance of teeth.  That appliance after 20+ years is now starting to wear on his existing healthy teeth causing more problems.

So...given that for the past year we have been exploring alternatives to the mouth piece.  There are two - either bridge or surgical implants.  For a variety of reasons; primarily longevity, quality and ease of maintenance Jordan has chosen implants.

After many quotes, and many arguments with our benefit providers and dental surgeon...we have a plan.  The total cost of the two implants is $7,900 - are combined benefits will reimburse us $3,000 each calendar year....that led us to the tough decision to plan for two surgeries rather then one.

Jordan's already undergone the first surgery to implant a screw into his jaw bone and now we wait 2-3 months for it to heal. Once healed (end of December), the implant/screw will be fitted with a tooth.  Then, and only then - when the first tooth is considered 'complete' can the dentist submit the expenses to our benefit providers.  So, Jordan and I have had to pay cash (read use the credit card) for the first part of the procedure (and will continue to pay cash each time something happens related to the procedure).  In January we should get our first reimbursement; and then we'll promptly schedule the second surgery.  

Our debt load is getting a bit scary, but we have a plan and will eventually be reimbursed.  Jordan and I would both rather pay the interest now for him to have a happy and healthy mouth before we have kids or anything else when there are more demands for the money.

Our Homes Updated Value

I have been waiting to write this post for a long time.  This is the post where I get to tell you that our homes value has dramatically increased since we bought it in December, 2011.

Up until this point, I have been using our City Tax Assessed value of our home ($328,600), which as you may know is fairly arbitrary (not every house is actually assessed by the city - they typically take an average based on the neighborhood and your reported key features such as fireplace and garage).  A homes actual value, is the price that someone will pay for it.

That leads me to telling you how much we paid for our home.

Before any upgrades, our base home and lot was priced at $327,650.  After incentives, upgrades, GST, GST Rebate, down payment, and CMHC insurance - we financed $348,819.10.  

You can see from the spreadsheet to the left that the purchase price before GST was $345,613.24.

Back in April, I told you that we found out our homes real value - the value that someone would be reasonably expected to pay has gone up from when we bought it.

Now that we have completed The Big Backyard Project, our home is valued at $377,000.

Because I have been using the Tax Value of $328,600 in our networth updates, we are going to see a jump of $48,400 to our total networth!

So excited for August 1st!

The Big Backyard Project is Done!!

Check it out!

The final piece to the project is done!

Updated: The Big Backyard Project

The first deposit has been paid ($750 for the fence, and the work has begun!  Jordan and I are both working  so we can't see the work being done, but our lovely neighbor is taking photo's for us and sharing them.

Are we really going to buy a condo?

A few weeks back, I told you that Jordan and I were discussing an investment property, specifically buying a Condo.

We have narrowed it down to which development we are interested in based on quality, marketability, rental income and re-sale value – while I would like to spend $160-$170, it looks like the best value is around the $190K mark. There are a couple of things we would have to look at including how we are paying for our backyard, as well as how we would be coming up with the cash for a down payment.  The specific unit we are interested in is $194,900, so after GST and down payment the mortgage would be $158,726 for a two bed, 1 bath 876 sq foot condo that has a separate entrance from the outside (no hallways) on the main floor.

Here's why we like this one:

The washer/dryer is accessible by both rooms and it's behind the pantry rather then right next to the cooking surface.

• It has a separate eating nook, rather then just the counter top eating space - nice for families.
• The living space is open to the kitchen - which creates a bigger feeling for the space.
• Storage space within the unit (just off the eating nook).

So, that's the space - without further ado - here is one scenario for our the cash flow would work, keeping in mind that the money for a down payment would need to be in our bank account for at least 90 days prior to fiance approval.

We would pay for our backyard using our line of credit, rather then the cash we are projecting to save this year.  The cash we are saving, would be re-directed to saving for a down payment.  We would begin paying a carrying cost/interest of approx $103/month.

Half of the down payment/closing costs would come from current cash savings as well as savings from May-October bringing us to just over $23K in cash savings.  We would need to withdraw an additional $17K from the LOC to get a total of $39,681.   If we made the withdraw in July and stashed it in our TSFAs we would gain 1.4% in interest (offsetting the interest we would pay on the LOC which is 5.5%, reducing carrying costs slightly - $58/month).

Our total interest costs would now be approximately $160/month including what we pulled for the back yard.

Assuming we would purchase the property in October and get possession and have it rented prior to January/February - we factor in three months of carrying the Condo. The carrying costs would be about $1,125 (shown below).



A note here.  Jordan asked me if we could still carry the condo if I was on maternity leave - we could, but only for the first five months without going into debt.  The first 15 weeks of my eventual maternity leave  (no, I'm not preggo yet) will include a top up (paid by my employer) to 70% of my salary.  There would be some carry over from the top up month to month, which is why would could stretch it to five months, rather then 3.

Once the purchase is complete, we could begin to pay down the LOC as aggressively as possible.   We would have cash flow from November-December of just over $1,700 which would reduce the debt to $38,336 by the end of this year.

Projecting forward, assuming no raises (which their will be) and a maternity leave (which I hope there will be) - as well as rental income of $276-$376/month - the debt would be paid for by the end of 2016.  It would cost us approximately $5,000 in interest cost over less than 4 years.

Is it worth it? 

TLDR: Is it worth $5,000 to both significantly increase the value of our home ($27,181 in equity) and acquire an investment property that would net $3300-$4500 in revenue a year (yes I've accounted for property taxes and the like, but not income taxes).