Our Story // Renovating Old Houses and Early Retirement
how renovating old houses, house hacking, and becoming landlords helped us retire at 34 to a house in the country
family photos by Ryan Flynn
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.
how we got our start
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.
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.
financing our second property
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.
retiring at age 34
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.
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.
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 ;)
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.