Have you ever heard George Carlin talk about your stuff? It’s the thing that made him a cultural icon. He absolutely nails how we all focus so much time and energy toward the accumulation and housing of ‘stuff’. Basically we work hard at jobs, we may or may not like, to buy stuff. When we have too much stuff, we work harder to buy bigger houses to hold our stuff. Soon, we are trapped in a situation where we will lose our stuff if we don’t work even harder at the jobs we may or may not enjoy. And, the harder we work, the more stuff we buy and the further and further trapped we are.
I told you a few days ago of a dark period in my life, the year 2000. We had built a beautiful dream home across the street from beautiful Melbourne Beach in Florida. It was right on the Indian River. The home was a two story with a tile roof, a chef’s kitchen, and a real library with cherry bookcases that went to the top of the 14’ ceilings. This home was outrageous. I started construction when we first moved back from Hawaii. Right after I signed the papers, my wife learned she was pregnant, I lost all our money in the stock market, and the Physical Therapy job market went completely south.
By the time we moved in, the home was killing us. Our dream turned into a nightmare. I hated that home. We both wanted to move back to Hawaii where we had been happy. But, now we had our son. I had finally found a better job. We were recovering, but barely. Then, my grandmother died. I received no inheritance because my Uncles took all her assets the year before. So not only did I lose the one person who would console me but I had no money to get me out of this situation. I worried about making my mortgage payment. I saw no way for us ever to get out of this house debt. Then came 9/11. That awful day lead to an easing of interest rates to very low levels. Suddenly, banks were loosening their requirements for financing. Clinton signed into law a bill that made the sale of your home with gains a tax free event. The housing market, long dormant in Melbourne Florida, became suddenly active. For sale signs popped up and disappeared.
|Yes, this it was this nice.|
I looked at my beautiful wife. She knew the remorse I had about this dream home. We had designed and built it. She knew how miserable it made me feel. She was painfully aware of how I thought this home stopped me from finding happiness. My poor wife! She was also pregnant with our second child. I think deep down, she knew this was for the best. She told me we could sell it. So we did. In fact, it never even listed. We talked to a few agents to list. Suddenly, we receive a call from someone saying she has a cash buyer and we only have to give her 2.5% commission. We sold. We made almost an 80% profit on our purchase price. Two years earlier, I lost all our money. Here, in one moment, I made a lot of it back. Suddenly, we were not broke. The buyer even wanted our furniture. We sold them most of it. We were really going to be free! I know some of you might not relate to this. For many, having things is the dream itself. But I had seen a different life. I knew how happy I had been just renting a home with crappy furniture in Hawaii. This dream home was not my dream. It was not me. But it did help me get to my dream.
Within weeks, we had closed and rented a small affordable home. I was elated. We had our daughter, Kaitlynn in April of 2003. To celebrate, we decided to visit our friends in Hawaii for a vacation. With a 3 month old baby and our 3 year old son, we revisited our once happy life in Kailua, Hawaii. It was all still there, just as we left it. On the flight home, I felt a sense of crushing loss. How could I let all that slip through our fingers? We could have simply stayed there and avoided all this pain. But isn’t that always true? Hindsight is a bitter friend!. My wife looked over at me on that flight. She was nursing my daughter at the time. She said, “Is there some way we could move back?” We had looked at real estate while we were there. The Hawaii market was soaring. What had cost $300,000 when we left was now approaching $600,000. It just wasn’t possible. We had been priced out of that market. I explained that to her. I will never forget what she said next, it changed the course of our lives.
“Well, if selling one house won’t get us there, what about selling 5?”
She said that. It was all her idea. So, don’t give me too much credit. I am simply the muscle and drive in the outfit called Weiss, Inc. In 2003 financing was cheep. Standards were low. My dog could have gotten a loan. I was working full time as a home health physical therapist. It’s the kind of job where you can see more patients and make more money. And I was! Between the two of us, we were making in the middle one hundred thousands. So we had provable income, steady work, and cash for a down payment. We were a loan agent's wet dream!
Within 6 months we owned 3 homes. We didn’t stop there. We kept buying. We made deals with builders on new construction. We bought a newly constructed condo. We picked out colors and carpets for 2 custom built single family homes. We made some rules. We only bought at a price we knew we could cover with rent. We put 20% down and got 30 year loans. I wanted this to be fool proof. I knew those adjustable mortgages would eventually go up. I made a plan that within 8 years, we would have enough principle to move back to Hawaii. Then we found a run down home in a very exclusive neighborhood. We knew we could double our money with minimal work. I was becoming more and more handy. I was doing all the upkeep and repairs on our rental homes. I thought I could do all the remodeling myself and make a huge profit. So we moved in and became remodelers.
It wasn’t that easy. I had a steep learning curve. I am fearless when it comes to jumping into things, and this usually bites me later on. Soon I had gutted and refinished the kitchen. I redid the two bathrooms. We hired a tile man to lay new tiles and a granite man to install new counters. We learned from the builders we worked with on the other homes. We chose neutral colors, selected stainless steel appliances and used only granite counter tops. We learned what would sell, and we chose accordingly. We even bought furniture to stage the home we were remodeling. We knew this was all to sell. Were attached to nothing! It was a strange feeling. It was like we were living in a hotel room.
Then seeming disaster struck. Melbourne was slammed by 2 hurricanes in 2004. Many beach homes were destroyed. But, ours were fine. The home we were remodeling was damaged, but ironically the repairs only improved the resale value. I remember the terror I felt when were in the hurricane shelter as Hurricane Frances blew outside. I pictured all my rental homes destroyed and me collecting no rent. I saw myself losing all the homes and all the money I had made. Can you blame me? It already happened once! In the middle of the night, in the shelter, I told my wife if we could, I would sell all the homes. It was too much worry! Plus, so much time. I spent hours collecting rent, showing properties, repairing things, going to Home Depot for new water heaters. Being a landlord sucked! And I was also working 70 hours a week as a therapist. We felt cash poor and land rich. Actually we just felt poor and tired most of the time. And now a hurricane was going to take it all away.
But It did not happen. Instead, over 2,000 families lost their homes. Melbourne is just below Cape Canaveral, where NASA and the space center is. Lots of engineers with very good jobs. These people that lost their homes had to find new ones, and fast. Just before the hurricanes, the housing market had been getting hot in Melbourne. Prices had risen to a point where our formula of only paying what the rent would cover had already stopped us from buying any more new homes. (Please see that was not wisdom but luck, we had no foresight the housing market would crash in 2 years) So now all the houseless engineers were looking for homes. The market skyrocketed after the hurricanes. It was a full on mania. Just like the internet stock mania in 1999.
Our 8 year plan became a 2 year plan. All of our tenants wanted to buy the homes they were renting from us. Our newly constructed homes sold the same day we closed. In one case, we did a double closing where I never even owned the home, I simply signed my name to the closing statement and got a check. The home we remodeled turned out fantastic. We staged it to sell and it did within 2 weeks. We got our full asking price and the buyer wanted ALL our staged furniture. We closed all the deals.
It was early 2005. My bank account had a balance that made me feel wealthy. I kept looking at it, to be sure it was real. I looked at my wife and told her, we can move back if you want. She did. We had no things. No stuff. No homes, just a few boxes of household crap and photos. We shipped 30 medium sized boxes to Hawaii. We were as free from stuff as any family of four could ever be. We had a huge bank account. We were on our way to Hawaii and happiness.
But, before you think the story ends here and that “Wow, Doug is a Rich Bastard”, I need to give you a quick epilogue to my tale. We purchased a home in Kailua, almost sight unseen, that was suppose to be our ticket back to happiness. Within 12 months, I would attempt suicide. As it turned out, in our excitement to escape Florida, we forgot to think about what we were doing. In the next 12 months, I realized that life can go down as well as up. Lets just say the bank account shrank back down as my anxiety went to never before seen levels. Our new home had rats. Our new business had assholes. Life did not become a happily ever after story. But I am still working on it!