Hoping for a Year of Travel and Change

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While I had hoped and expected to be further along in the downsizing process by now, I am confident that it will happen this year. Mr. PFL’s work goal is to make it until the end of February and then retire; this deadline is rapidly approaching. It would be comforting to have a new place lined up before he is done with work. To that end, I do search for a place to live every single day. I also sent out a letter to another property owner of a duplex that we are interested in. The duplex is a block from where we live now and has been in the process of renovation (and thus vacant) for about four (4) years. I actually toured the property when it was first on the market about five (5) years ago, but at that time it was extremely overpriced and needed a complete renovation. It sold to the current investor for about 2/3 of the original asking price. Duplexes in our neighborhood (the few that have sold) are going for about $315,000 (just over $150,000/unit), so they would make money if we paid market rate. I hope to hear from him.

I’m still following up on BD’s sister buildings. It has been more than two months since I first contacted the owner. I’d give up, but I’m intrigued by the potential of adding another $50,000-$100,000 in gross rental income each year. The value of the land should continue to rise as well, which may open up some selling options in the semi-near future.

My number one goal this year is to travel more. We are off to a great start. Since Christmas, we have visited my aunt in Denver, skied in Utah, and are heading to the Florida Keys tomorrow. We have another family trip planned for Florida next month when we’ll be staying south of Tampa. We’ve talked about heading back to Hawaii (I’m hoping for a coffee farm starting in 2017) and we’ve seen some very inexpensive flights to Europe. We have also discussed a road trip through some new states on our way to hopefully watch Ohio State at Oklahoma. To help accomplish all of these dreams, I recently signed up for an IHG Rewards credit card. Intercontinental Hotels Group (IHG) is the parent company to Holiday Inn, Intercontinental, Crowne Plaza, and my personal favorite, Holiday Inn Express. With this rewards credit card, I earn one free night per year automatically, plus I get bonus points each time I use it when we stay. With the sign-up bonus, I already have enough points for at least 3 free hotel nights. I continue to use my Southwest Rapid Rewards credit card for every day purchases; I get multiple free flights every year. Mr. PFL and I also signed up for TSA Precheck after waiting in those lines at New Year’s. It was a very easy process and we were approved in about a week. We will be testing it out for the first time tomorrow.

Now if only we had won the Powerball…

Introducing Old Iron Hip

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Driving back from a family trip to watch baseball on Sunday, we were notified that Mr. PFL’s 89-year-old grandma fell and broke her hip. She had surgery on Monday, leading to her new nickname, and has the goal to return home where she had still been living on her own. Thankfully, Old Iron Hip has a Durable Power of Attorney and a Health Care Power of Attorney. We’ve also previously talked to the local county’s agency on aging and had a meeting with an estate planning attorney. Having all of this information ahead of time has helped keep the stress level down as much as possible in this unfortunate situation. Having these documents signed has also clarified the leader, which has been invaluable.

Every family has issues, including this one. I’m pleasantly surprised that the work we put in over the last few years is paying off. I’m hopeful Old Iron Hip will make a satisfactory recovery and will live a content life, on her terms. I’m also grateful that she was able to pre-plan her funeral for when that time eventually comes.

Finally, one of the concerns people have when we tell them we are planning to move to Hawaii is: What are you going to do if/when something happens and you live so far away? The short answer: Fly. The longer answer: If something/someone is a priority, we will be there and we have the resources to make it happen.

More Ideas Every Day

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I’ve had four new ideas in the past few days. I guess they are new ideas; maybe they are just being recycled. Anyway, idea 1 is that I should get my real estate license. I looked into this several years ago, probably before we bought our first investment property in 2010, and it didn’t go anywhere. Now, the more we talk about selling our house, and the more frustrated I am trying to work with an agent, the better this idea sounds. We do know a lot of active real estate agents; they all want to help us. But with the ease of access to listings through public sites, I really only need them so I can get inside to see the properties. I’m perfectly capable of drafting an offer myself, and have done so. I generally find places I want to look at, drive by, and then let the agent know. If I get my license, I can cut out the middle-man. I can also make a little extra cash. I’ll only need to take 8 days of class, instead of 12, because my law license exempts me from 4 days of real estate law. Then I’ll need to pass a test. I can finish the classes in the first week of June, if I start next week. It will be just over $800 for tuition. The last step is to get sponsored by a broker; since we know so many agents, I’m hopeful this won’t be too hard. So what am I waiting for?!

My next great idea, idea 2, was to try to get the HELOC increased on the Condo. We closed on the current HELOC through a big bank while we still lived there. I called that bank over the weekend and they confirmed that they don’t lend on “investment properties.” Today, I emailed the small bank that helped us with the HELOC on our current home; they could lend, but they have a few more restrictions because it isn’t our primary residence. Basically, if we go with their offer, we’ll increase the HELOC by about $30,000 and the interest rate will go down. As I told our contact, this probably would have been good to ask about back when we were working on the other loan. Better late than never.

Speaking of the Condo, Mr. PFL and I cycled back to the roommates conversation again yesterday. When the current lease is up at the end of October, we could move back to the Condo, get roommates, and sell our current house. I’ve been looking at the Condo as solely an investment property, and hadn’t considered this possibility, but it makes so much sense! The Condo has continuously had three tenants at all times; it is 3-bed, 3-bath, with each bed/bath on a separate floor, making it an ideal roommate situation. The third floor bedroom is a double-sized bedroom as well. And, while it might reduce our net monthly income, we now have the cash available to buy another investment property, so we shouldn’t need to rely as much on the Condo’s cashflow.

Finally, great idea 4, comes courtesy of my obsessive internet searches about coffee farming in Hawaii. I stumbled across a blog about a couple from Chicago that basically did what we’ve been thinking about - moved to a farm on the Big Island. The blogger talked about what her interns, the WWOOFers, did each day. What’s a WWOOFer? According to WWOOF Hawaii, “World Wide Opportunities on Organic Farms (WWOOF) is a unique educational organic farming and cultural exchange program that allows participants to gain practical and sustainable agriculture experience, while meeting and forming relationships with people from around the world.” Cool. But how does this apply to us? Well, basically, in exchange for room and some amount of meals, WWOOFers work a certain number of hours a week at the host farm (anywhere from 15-40, depending on the farm needs and the parties’ agreement). So, we could go to Hawaii, have a place to live, get fed, work on a farm, and learn a ton, all before making a huge financial commitment? Sounds too good to be true, right? But what a great first step, with limitless possibilities.

Hawaii-Bound Through Downsizing?

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I, through our real estate LLC, made an offer on a single-family home about five miles from where we currently live, in the same city. It all started when I was getting my hair done last Tuesday. My stylist and his partner purchased a duplex back in December and it is just a couple of blocks from this new potential property. When I’m in the salon, we love talking about real estate and small-business ownership. I’m so proud of my stylist for purchasing a duplex for his first property. We’ve discussed, at length, the benefits of owning and renting real estate. So, last week, he was telling me about this great little house that is for sale in his new neighborhood. We looked it up online. I sent an email request to the seller’s agent (I have two real estate agents that I use, but thought I’d try no agent this time). I met the seller’s agent at the property on Thursday afternoon. Mr. PFL and I drove by on Saturday evening so he could get a feel for the neighborhood and location. And, today, I emailed a cash offer of $60,000 on a list price of $110,000. We’ll see what they say.

Now, this offer really isn’t as ridiculous as it might seem at first. The home was built in 1925 and updated sometime in the 1970’s or 1980’s and never again. The electric was probably replaced about the same time. The furnace and air conditioner are newer. The outside looks great, with siding and a newer roof. But, there is wood paneling in most of the rooms. Light blue laminate counter tops. A brick surround, and carpet, in the upstairs bathroom. Basically, every single room needs work and to be updated. The $110,000 list price is totally fair, and probably under market value, if the house had been updated in the last ten years. It might even fetch $125,000 or so. But there is no way it is worth $110,000 in the current condition. It is being marketed as move-in ready, but I wouldn’t even want to advertise for renters in the current state. The house is part of a probate estate, too. Thus, my offer of $60,000.

If we get this house for $60,000, we could spend the next few months fixing it up. I think we are both ready for another renovation project and manual labor can be good for the soul. We can utilize all of our skills, and learn some new ones, like refinishing the wood floors. We could then either sell it, rent it out, or rent it to ourselves. If we decide to live there, we will need to do some serious downsizing, which we want to do anyway. We would also be in a better position to get a roommate in this smaller house than our current one as the main floor has a private bedroom/bath and the second floor has two bedrooms and one bath. We wouldn’t even be on the same floor as our roommate. We’d need to add a bathroom to our current home to have that flexibility. We would also feel better about selling our current home, I think, because we would still have a home, with plenty of storage, and in a neat part of town.

And, this week, at least, Mr. PFL and I are convinced that we can downsize, sell our current house, gets some cash, and then move to Hawaii. So, I’m keeping my fingers crossed that they will accept or make a counter-offer that we can entertain.

UPDATE as of 4:25 p.m.: The lowest price the seller will accept is $100,000, so no deal for now. I’ll keep an eye on it; she might change her mind in a few months.

UPDATE on 3/18/2915: The listing price was reduced to $105,000 yesterday.

Jury Duty Summons

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Of course I would get summoned for jury duty during the last year I’m planning to be a permanent resident here in Ohio. I received the initial summons last week and immediately wrote a letter attempting to be excluded from service as I am a sole proprietor (and that is one of the valid reasons for being excused). Unfortunately, the jury commissioner did not agree with me, but did reschedule me for the week of June 29th. That’s only a 4-day week due to Independence Day Observed on Friday. I only need to report for one week, or through one trial, if selected. I guess that’s not so bad. I just can’t schedule anything that week during the day because I won’t know if and when I’ll be released. I will be paid $20 per day of service…

While the monetary impact is troubling, I’m more concerned that I’ll actually be selected as a juror. Trials, for me, are boring. Being a juror is an awesome responsibility; I don’t want to shortchange anyone because I’m restless. I’ve represented clients at many trials (always bench trials, never with a jury), but the process is basically the same. Each side needs to present evidence. It can take forever. Multiple witnesses tend to testify to the same thing. My favorite objection is: relevance? Witnesses, due to attorney questions, tend to go off on tangents that have no bearing on the case. Which makes the trial longer. And more boring. And, to top it all off, there is NO gavel banging, unlike every single court show on television.

Being forced to take four days off might actually be a great time to study for the Hawaii Bar Exam. I need to decide, soon, if I should take it this Summer. The application is due by April 1.

House Showing Sunday

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As of now, someone is coming to look at our house on Sunday morning to see if they want to buy it. I mentioned about a week ago that we’ve been telling more people about our plan to move to Hawaii. One of our friends is getting started as a real estate agent and approached me this week about doing this showing. The inventory in our neighborhood is very low and it is where the potential buyers would like to live. Worst case scenario: We have a clean house on Sunday. Best case scenario: They make an offer we can’t refuse. Sometimes the universe works in mysterious ways.

Properties Update

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The Condo: The tenants seem satisfied with the new furnace. They texted today about the water heater still giving them trouble. Well, it turns out there are TWO thermostats on the water heater, so I turned the second one up (I’d turned the first one up a couple months ago). Oops. Hope that fixes the issue.

BD - the 6-unit: Mr. PFL and I have a potential tenant for one of the units. I’m still working on getting the other unit clean. At least the bathtub drains and the fridge looks new inside. Unfortunately, the furnace for the dirty unit isn’t working (I think the draft inducer motor is out on this one, too), so we need to get that fixed. I guess it is a good thing we don’t have a tenant in there now. BTW - If you make an appointment for a showing, it is polite to call, text, or email if you aren’t going to make it. I only list on craigslist, so everyone at least has an email address. I’d estimate no-calls, no-shows are running at just under 50% of my showings. I really appreciate when people do let me know if they can’t make it.

Hawaii: I had a phone conference with a real estate agent last week. She sent some links for potential properties and a contact for the credit union to discuss financing. I’ve been researching LLC formation and other ancillary issues today. Last night, the cable box was acting funny when I finally sat down to watch TV, so I jumped onto YouTube. I spent over an hour watching videos that started with a search for coffee farming in Hawaii and this simple video. Mr. PFL and I have been a lot more open discussing our plans to move to Hawaii with our friends and family; the overwhelming reaction has been disbelief. People can’t wrap their heads around the concept that we might actually be able to move and not work full-time jobs. I can’t blame them - it is still hard for me to accept most of the time. On a side note: last week was one of my top five most unpleasant weeks of work ever. I am ready to leave lawyering far behind.

So Much Research

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Having a new plan/goal is exciting, but there is so much to figure out. Google has become my new best friend. Mr. PFL and I are still considering Hawaii to be a viable option. We’ve actually located a vacant lot with a lot of potential. It is listed at $175,000 for just under 7.5 acres, fee simple. It is zoned agricultural with minimum lot sizes of 5 acres. We currently live on .11 acres and our neighbor mows the front yard for us (our backyard is all landscaping/flagstone/vegetable garden), so this would be quite a change. We are also able to walk to almost everything we need/want - a reliable vehicle would be imperative in Hawaii as the closest town is about a 30 minute drive.

We’ve also been looking at zoning laws, since I don’t believe in buying real estate without a plan for potential income. The zoning laws are somewhat complicated and stringent, because, as we learned on several of our tours, the people of Hawaii try very hard to preserve the islands. The other complicating/interesting item is the ability to create Ohana dwellings, which are basically mother-in-law suites, attached or unattached, but without a complete kitchen so the Ohana (family) all eats together.

I’ve looked at some listings on HomeAway.com. At least one listing’s comments indicate that there is a second home that the owner lives in on the property during the time they are renting. So, I guess it is possible, but it will take a lot more work to figure out all of the rules.

We’d also first need to build a house in order to even consider renting it out. There are several companies that have kits for sale that include everything you need to build a house. Labor, electricity, plumbing, water catchment, preparing the site, etc., are all extra. Pricing has been tricky to find, but the price range at Argus Building Supply has a studio home for as little as $10,500, with a 3-bedroom maxing out at $41,500. We could build a house ourselves, technically, but the cost savings aren’t likely to pay off. For example, we’d need to live somewhere while we built the house; we’d need tools; we’d need time; we’d need to learn how to build a house; and we’d still need to hire plumbers and electricians or the house wouldn’t be up to code.

We’ve also considered building or buying a tiny house. We watched an entire video about a tiny house in Hawaii.

We’ve briefly looked into getting jobs in Hawaii to help ease the transition. Unfortunately, Hawaii doesn’t have reciprocity for lawyers, so I’d need to take the bar exam again. It is making me nauseous just typing this, which is the same reaction I had when I first looked up the rules this morning. It is possible I could get a legal job, just not as a lawyer, if I don’t take the bar exam (like a law clerk or paralegal). Mr. PFL was looking into groundskeeping.

So, the next steps, in no particular order, are to:

1) Find a real estate agent;

2) Decide on a budget and financing;

3) Decide the ownership type we’d like to use (probably an LLC);

4) And, go back to visit???

BTW - I did get a couple of emails in response to my casting application to be on Hawaii Life, but nothing else is happening on that front.