Love and Real Estate Investing in a Time of COVID

“This house will not rent. I just can’t find anyone who will rent it!” exclaimed my dear real estate friend Shannon, with an exceptionally long sigh of hopeless frustration. I responded by asking her a simple question “Instead of a long-term rental, have you considered renting it out, room by room?” Three days later, Shanon called me back and informed me that she had advertised the rental by the room, and it was now fully occupied with young professionals! She thanked me repeatedly and asked me how I had gotten into short-term rentals and what she should do next. Keep in mind, Shannon owns over a dozen properties, in her large real estate portfolio. The fact that she was coming to me, someone with exceedingly humble beginnings, for help was remarkable to say the least.

Let me back up a bit to properly tell you my tale of love and real estate. My husband and I thought we had done everything “right” on paper. We’d pursued and completed our degrees at the same excellent University in Florida. I had secured an exceptionally well-paying job at a hospital near Atlanta, Georgia and my family and I had moved there. We had a purchased a brand-new construction home and looked forward to a great life of building our dreams together. We were young, strong, with fresh degrees in our hands, love and ambition in our hearts, and our first child on the way. The whole world stretched endlessly before us. What could possibly go wrong, right?

Well, 2008 happened. The great recession cut the knees from all of us, and by the end of it the only ones left standing seemed like those with government bailouts, golden parachutes, or those riding things out on their great grandparent’s inheritance. In our home, things had quickly gone from a dream come true to a complete nightmare, almost overnight. The newly constructed home was too big, the monthly payments too much, my husband couldn’t find a job in his psychology field, and then the student loans started rolling in.

My husband and I had attended a wonderful private university, and thoroughly enjoyed our educational experience. But, by the end, we owed $500K in student loan debt.  That's not a typo.  Talk about DUMB!! The monthly student loan payments were more than our mortgage, approx $5000+ per month. My income expectations and take-home, after taxes, had been woefully miscalculated. Needless to say, we were in A LOT of trouble. Thank goodness, we found Dave Ramsey and the debt snowball!

I won’t go into all the gruesome, gory details, but my husband and I were nearly forced to split ourselves in half to survive. He worked two jobs, I worked two, sometimes three jobs. At one point, unable to find a job in his field, my husband hit rock bottom, abandoning his master’s degree altogether, he took a job with a cleaning crew at an air force base. It was heartbreaking, but I was still proud of him for trying to do what he could for our family. Eventually, after the economy began to recover, we started to make some slow progress. My husband finally found work in his field and opened his practice. We were able to pay down our debts and get our monthly expenses to a reasonable level. I do still recall the day we had been so happy when our student loan minimum payments had finally become less than our monthly mortgage payment!

Since that time, we have gone from a deeply negative hole in the ground, to even footing, to finally generating cash flow. As I mentioned earlier, getting there wasn’t pretty. We had been forced to sell our beautiful new construction dream home and rent a small apartment whilst we were paying down the school loans. We were finally able to pay for a nice home that was within our budget in an excellent school district for our children.

We had become so risk averse during that downturn that investing seemed like something we just couldn’t do. But an opportunity became available a short time later. A beautiful home near where we lived was on sale at around $100K less than the median priced homes in that area. For context, most homes in that area were $400k and this home was selling for $299k. It was a probate situation. The only issue was that it needed a new roof. We figured, if we bought a new roof for it at around $10k, we were still up $90k on this deal. So, we took the plunge and bought it keeping in mind our possible strategies: Short term rental, long term rental, flipping/selling.

They say that when you purchase your first rental home you will be plagued with many doubts and uncertainties, and we certainly were. But we took the risk anyway it was worth it. It’s sort of like getting married or having children. If you spend too much time overanalyzing and weighing all of the costs and benefits, you may never take the plunge. But again, in the end, it is totally worth it.

We were able to put a new roof on the home with a fantastic crew that did the job for $7K instead of $10k, with a 20-year warranty. We did a lot of the painting and fixing up ourselves. We took pictures of the finished product, listed the home on several rental sites, and have never been without a renter or rental income since that time.

And now, during this time of COVID-19, my husband and I are continuing to acquire properties even during this extreme economic downturn. We are not afraid. We go boldly into the fray and can hold our heads up high, because we have seen and experienced so much worse, and still survived. From our family to yours, we hope that you will be wise and prosper, and pray that you and your family will always be blessed, and just maybe find great love and good real estate even in a time of COVID.