Inspiration for Sticking to your Renovation Budget and Being Generally Smart with Money

Last week we published our budget for the Porch House powder bathroom (you can see that here) and I wanted to get back to the topic of money today. For those of us who own and love old homes, there can be an interesting intersection where renovations and life finances meet. Like the saying goes, an old home can be a money pit if you’re not careful. Last year, Garrett and I shared our journey to *early retirement* (which is really more like *self-employment*) through renovations, house hacking, and rentals. And I’d like to keep that discussion going today.

Emily Netz Kitchen

via / design: Emily Netz / photos: Melissa Click Photography

Lately I’ve seen more talk about finances going on in the blog world – both in renovating (like Sarah’s post) and life (like Joanna’s post). So I wanted to share a few of my favorite blogs and Instagram accounts that keep budget in focus. These folks are doing inexpensive (and beautiful!) renovations, retiring early, and generally being smart with their limited funds. I love following them because I tend to be more responsible with our money when I see others doing the same. I think it’s easy to get accustomed to seeing $50k, Pinterest-perfect kitchens and feeling like we need one too (regardless of our home value or financial goals). But these folks help keep our dreams in check.

Emily Netz Sitting Room

via / design: Emily Netz / photos: Melissa Click Photography

Inspiration for budget renovations and generally being start with your money

@emilysuenetz /the Slow Flip Formula – Emily and her husband Jeffrey renovate old houses in Oklahoma with the most beautiful results (the pictures in this post are all from their last project!). I was first drawn to their beautiful interiors and cute kids, but stuck around because I loved their story. This post about their journey is more detailed, but basically Emily and Jeffrey buy fixers, move in, renovate them, and then sell them a couple of years later for a profit. They call it “slow-flipping” and they recently turned their process into a new business, the Slow Flip Formula. Check out their site for a free guide on buying homes for future profit. And check out more of their beautiful (budget-friendly) interiors on Emily’s Instagram page.

Newly Woodwards – Kim and her husband Ryan built their own home with cash, renovated others, and own rentals. They believe in making a home you love and can afford and I really appreciate their perspective. Basically these guys have their heads on straight! You can see what I mean in Kim’s ‘budget and money’ section (be sure to check out this post). In Kim’s relatable words: “It’s just plain easy to get sucked up in a black hole of “what we could do.” You visit a friend’s home with a $50,000 custom kitchen and can’t get it out of your head. You see marble floors on Pinterest and nothing else compares. You need it all. But, hold up, my friends. We need a roof over our heads. But we want the finer things.” Amen, sister.

Apartment Therapy – Apartment Therapy is full of beautiful house tours and enviable remodels, but it’s the real world budgets I love seeing the best, which you can see here. I’ve even written an article for them on 7 ways that Garrett and I save money on our renovations (you can see it here).

@jennasuedesign / blog – Jenna and her fiance just launched a new real estate business in Florida after traveling the world for the better part of a year, DreamStone, LLC (you can read more about that here). They’re looking at buy-and-hold properties (and just bought a 5-plex) plus flips and they’re going to vlog all about it. Jenna is an amazing designer in her own right (you’ll probably recognize this beautiful bathroom she did for the One Room Challenge) and I can’t wait to see how they balance beautiful design with the strict financials of real estate investing.

Mr. Money Mustache – So this blog has nothing to do with design, but it’s one of my all time favorites on money. Mr. Money Mustache is all about extreme frugality and he’ll make you look hard at your own consumption, spending, and waste. What you’ll find: case studies from those seeking financial freedom, household spending in a year (hint: it’s waaaay less than you are spending), and tips for spending less on all the things. Mostly, I like his voice and practical approach to money/life/being.

The Kitchn’s Financial Diet Column and Food Budget series – this site also has nothing to do with home decor, but did I mention that renovation budgetting is completely intertwined with everyday budgeting? Well it is. And Food budgets are some of the largest expenditures we make every month so keeping that in check can mean more money for renovations and home improvement. The real world food budgets are especially interesting!

The Frugalwoods – I first discovered the Frugalwoods about a year ago. They’re into financial independence and simple living, much like Mr. Money Mustache but on a large homestead in Vermont. You won’t find design inspiration here, but what I do love about these guys is their perspective (similar to Mr. Money Mustache) and that they share their monthly spending. It’s empowering to know how little money you could live on, even though most of us don’t.

Emily Netz Bathroom

via / design: Emily Netz / photos: Melissa Click Photography

There’s so much ground to cover when talking about money, old homes, design-forward renovations, and personal finances. So if you guys are interested, I’d love to make this a regular topic on the Grit and Polish.

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Our Story // Renovating Old Houses and Early Retirement

The other day I was explaining what it is that Garrett and I do to a total stranger, and it got me thinking, have I ever really explained it here on the blog?  Sure I share all about the houses and our family and the before and after photos of our renovations (and I’ll get back to it next week), but there’s a whole other story in the background.  The tale of why and how we do what we do.  Why we buy old houses.  Why we spend so much time renovating them.  Why we lease them out as rentals.  And why we’ve been working so hard for the better part of a decade.

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family photos by Ryan Flynn

To answer that, let’s rewind to 2008 when our renovation journey began, long before our band of renovation gypsies numbered four.  It was just Garrett and I back when we bought our first house, a 1916 craftsman “fixer” with an unfinished basement, a unique detached cottage/workspace in the backyard, and tons of potential.  In a desirable Seattle neighborhood back then, old and in-need-of-work cost you a whopping $445,000 (that number is now substantially higher…eeech!).

At the time, I had just started my engineering career and Garrett had returned to school to pursue his PhD (which he completed in 2015…biochemistry, the smart guy!) so we planned to live in that house pretty much forever, while we slowly fixed it up, had a couple kids, and worked away at our careers.  But you know what they say about best laid plans…

Well just 8 months after buying our first house, I got laid off from my oh-so-short engineering career, and life went into a tailspin.  With a big mortgage to pay and no job in sight (there weren’t a lot of jobs for newbie structural engineers in the building downturn of 2008 and 2009), I suggested we finish out the basement, rent the main house, and move into our 400sf backyard cottage, which at the time was lacking a kitchen and even a bathroom sink.

I told myself that small-space-living would be an adventure, and Garrett went along with it because he’s a real trooper.  So we rolled up our sleeves and got to work. The only problem was that we didn’t really know that much about renovating.  So we learned as we went and asked for help from pretty much everyone we knew (especially our folks).  Sure, we made some mistakes – like that pink tub…oh goodness why did we buy that pink tub?! – but three months later, we had turned our 2-bedroom, 1-bathroom house into a 4-bedroom, 2-bathroom house.  We got renters in the main house then moved out to the cottage to start that renovation.

Essentially, we were house hacking, before the term actually existed. If you’ve never heard of house-hacking, I like to explain it as getting-someone-else-to-pay-your-mortgage-so-you-can-do-what-you-want-with-your-life.  But more on that in a minute.

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We spent three years in that cottage. During that time I got a job, we cut expenses, we lowered our mortgage payment by refinancing, and we raised the rent in the house. Suddenly we weren’t just living rent free, we were actually making money on the house. Our house-hacking endeavor had turned into actual income and it felt good. We saw this whole other path open up before us and although the destination was a little fuzzy, we called it financial independence.  Our goal became to make it there – to financial independence – by the age of 35.

After those three years in the cottage, we used the money we had saved up and bought a second “fixer” house. And shortly thereafter, a third. We moved into each renovation project and loosely followed the BRRRR model (which is apparently a thing although we had no idea at the time): Buy, Renovate, Rent, Refinance, Repeat.  And although we were saving all along, we had to get creative to find enough cash for down payments and renovations (this is Seattle after all and houses don’t come cheap).  Over the years we’ve utilized traditional financing, a FHA loan refinanced into an 80/20 loan, cash-out refinance, HELOC, personal loans from family, and cash-purchase-turned-delayed-financing. Finding time to renovate our properties was tricky. Garrett was in school and I was working full-time, so we had to renovate on nights and weekends, often turning down social plans to get dusty and bang on walls. Of course, we love old houses and renovating, but we love our friends too.  While the sacrifice has been well worth it, these choices were often hard ones to make.  Once the boys came along, our renovation pace slowed down, but we kept at it. By then, our goal was crystal clear: make enough income from our rentals so that we could “retire” and spend more time with our family and working on our own projects.

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By the time we rang in 2016, we had four houses plus the cottage in Seattle, and we projected enough income from the rentals to bankroll our life (granted, not a lavish life, but a modest, happy life for our family). So when we found our dream home, a farmhouse on 3 acres in our hometown, I quit my 9-to-5 and we moved to the country. Garrett and I were both 34.

Our “retirement” is in it’s infancy, but we are excited for what we have planned. We will still spend a lot of time as landlords and of course as parents, but also plan to dedicate time to outdoor activities, fresh-food cooking, country-dwelling, and renovating any old house we can get our hands on.

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So that’s the story of how this little family house-hacked our way from first-time home buyers to full-time renovators and landlords. How we turned our love of old houses and renovating into income and retirement plans.

I should note that being a landlord is not really retiring.  Nor is being a parent of young children.  These things can be hard with a capital H.  But the first affords us the luxury of having more time to do the second and provides us the lifestyle we want without having to work more than a few hours a week, hence we call it “retirement”.

One other note, I’ve hesitated for a long time on whether or not to get so personal on the blog, especially about a topic as touchy as personal finances.  This is, afterall, a renovation/home blog.  But ultimately I thought about our younger selves, that 27-year-old couple who had just moved into a cramped cottage without a bathroom or kitchen, who had no real income and struggled with the weight of their debt. Those two would have been really excited to hear a story like this. So I hit publish.

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We are really excited for what comes next in our story! Thanks for being a part of it.

Also thanks to Ryan Flynn for these family photos!  He had the patience of a saint and a shutter speed fast enough to catch even the wildest of toddlers 😉

xoxo

-Cathy

p.s. Love all the feedback on the interior of our farmhouse from you guys and over on Instagram. Sounds like there’s plenty of folks out there who wouldn’t paint their millwork, either 😉

p.p.s. I’m absolutely in love with this vintage London apartment.  It’s ethereal and beautiful and so well styled.  Kudos Ms. McAlpine!

p.p.p.s. This kitchen. I loved it when I saw it a year ago, and somehow it’s gotten even better.

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