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Mrs. Maroon

January 23, 2015

A Breeze-Fall

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This week we closed a rather tumultuous chapter of our lives… we sold our semi-investment property.

 

Cutting To The Chase…

A wire transfer for just over $8,000 hit our checking account to mark the end of that time. We had taken $7,500 to the closing table with us 35 months and 3 days earlier. We didn’t make any money on our ‘investment’ –  especially once you factor in various expenses and an extra mortgage payment or two. Plus, considering the power of our money were it invested for those three years, we most certainly lost value towards our net worth. But knowing everything I know now about the whole experience, I wouldn’t have changed a single thing.

 

Why Did We Do It?

In mid 2011, we began encouraging Mr. Maroon’s parents to move from west Texas to north Texas to be closer to us. We asked them to leave what had been their home for the last 30 years so that they could take full advantage of grandparenting their first grandbaby. Also, our grandma-to-be was receiving medical care at a nearby hospital and the 5-hour treks to go to the doctor were becoming tiresome.

 

The problem was that they couldn’t sell their house. Fortunately for us, we discovered the Family Opportunity Mortgage program, which allowed us to obtain a conventional loan (as opposed to one for an investment property) on behalf of parents since they would not qualify for a new loan while still holding the mortgage in west Texas. We jumped at it. After putting our wonderful – and very patient – realtor through the wringer, we settled on the perfect house for two recent retirees. We signed the papers while they loaded the trucks on a Friday in mid-February and proceeded to work our tails off over the weekend to make it a home.

 

We apparently appeared to have so much fun unpacking that Mini Maroon #1 decided he was missing out and wanted in on the action. He made is debut into this world the following Wednesday night. He was full-term, but still dramatic all the same. I guess some things will never change…

 

And Then Life Changes

Well, in the nearly three years since that day, so very much has happened:

  • We found elation in becoming parents for the first time.
  • We experienced the agony of losing a parent.
  • We transformed our whole future by stumbling upon some crazy idea for financial independence and early retirement.
  • We uprooted our roots from the past five years and moved to a new state.
  • We added one more Mini to our family.

After all of that, it was time for grandpa to make the move back to west Texas, close to his friends and Mr. Maroon’s sister. In fact, Mr. Maroon is immensely proud of kick-starting the savings plan so that grandpa was able to buy his own house this time. But that left an empty dwelling in north Texas. It was time to sell.

 Source:  http://www.rockinghamgroup.com/deductible.aspx


Source: http://www.rockinghamgroup.com/deductible.aspx

What’s with the Breeze-Fall?

The inflow of cash was not something we had allocated in our 2015 budgeting, similar to a windfall. But being such a paltry amount in the grand scheme of our financial picture, I deemed it not worthy of being called a windfall; thus I’m calling it a breeze-fall.

 

The next question is… What to do with it?? First, we finished off our contributions to 2014 Roth IRA accounts. Since we sent all of our extra money to taxable investments last year, we had not yet maxed out our IRA accounts – thank goodness for the grace period. We will still have just over $2,200 to work with. I’m actually writing this as Mr. Maroon delves into the depths of mortgage payment calculations in Excel to find our optimal investments – stay tuned for that final decision.

 

The Benefit to Us

At the beginning, I told you that we lost money on the venture. However, our financial future is brighter because of it… By investing that initial $7,500 in the house, we sheltered it from the biggest enemy of all – our uneducated selves. We were financial dummies back then. If we had left the money lying around in our bank accounts, at some point, I can guarantee that we would have found an absurd justification for spending it. The first things that come to mind are a camper, tractor, or boat – all of Mr. Maroon’s obsessions desires at the time. But now, we are smart enough to be debating merits of early mortgage payment vs. additional investments for spending our breeze-fall of $8,000. I’m completely convinced we won on this one.

 

~ Mrs. Maroon

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  1. Comment by Emily @ Simple Cheap Mom — January 23, 2015 @ 4:22 PM

    That’s awesome that the house sold. It must be such a huge relief! I’m sure you’ll make the best use of your new found money. (I like the term breeze-fall)
    Emily @ Simple Cheap Mom recently posted…Signup for SwagBucks to Make Money OnlineMy Profile

    Mrs. Maroon Reply:

    We are very relieved to have closed the book on this one. We had a contract in less than a week. But The inspector noted a problem with the AC unit. We waited another month for a day warm enough to service it. Turns out no problems at all…

  2. Comment by Vivianne — January 23, 2015 @ 9:19 PM

    Wow, sold a house in January? I’m impressed. Awhile back, I listed my house for a year, and it didn’t go. I’m glad it didn’t go because it actually generate income. But you should teach me your secret to make it sell. 🙂

    Mrs. Maroon Reply:

    No secrets here – just a good realtor and very low inventory available. We actually listed it in early December and had three offers with three or four days. We got hung up by an AC service that delayed closing by three weeks 🙁

    Glad you turned your non-sale into some income! That’s great!!

  3. Comment by Tonya@Budget and the Beach — January 24, 2015 @ 8:39 AM

    It’s crazy how much can change in a short amount of time. You think you have everything “planed” but life so rarely works out that way…sometimes better, sometimes worse. Glad the house sold!
    Tonya@Budget and the Beach recently posted…The PlanMy Profile

    Mrs. Maroon Reply:

    I think we should all take to heart that life never goes as you’ve planned. It’s always a good idea to make plans. But remain flexible and roll with what life throws your way.

  4. Comment by Justin @ Root of Good — January 26, 2015 @ 8:16 PM

    Sounds like a good-enough ending to the house’s story. The concept of sunk costs comes to mind. You did what was best going forward and didn’t focus on trying to get an unreasonable amount of money.

    Now you have some extra cash to make productive in 2015! Great problem to have.
    Justin @ Root of Good recently posted…Why We Chose The Worst School In The DistrictMy Profile

    Mrs. Maroon Reply:

    Great problem indeed. The story of the house ends well enough. I stand by my assertion that I would not change a single thing about the whole situation. The house served a very specific purpose. After fulfilling that purpose, it was time to let go. And our bottom line will even improve. Wins all around.

  5. Comment by Joe @Stacking Benjamins — January 27, 2015 @ 9:31 AM

    Wow! What a story. You met the enemy….and it was you. I love it.
    Joe @Stacking Benjamins recently posted…My NVestly Adventure: Cleaning Up The IRA — Rupees EditionMy Profile

    Mrs. Maroon Reply:

    Fortunately I think we have defeated that enemy for good. We work on educating ourselves every day – just can’t get enough. We will likely still make financial mistakes moving forward, but hopefully the magnitude of those mistakes will be much smaller.

  6. Comment by Shannon @ Financially Blonde — January 27, 2015 @ 11:34 AM

    Congrats on selling the home! You may not have made as much money as you wanted, but at least you didn’t lose money, so yes I would say that’s a win. As far as what to do, I am a huge fan of investing and growing your wealth especially if you have a low interest mortgage in place.
    Shannon @ Financially Blonde recently posted…Music Mondays – 9 to 5My Profile

    Mrs. Maroon Reply:

    Thanks for the advice. We appreciate all opinions and thoughts. Mathematically, the best idea is to invest for the long haul. Seems like every day we come to an answer, but then re-think it. So the debate continues…

  7. Comment by Elroy — January 27, 2015 @ 11:39 AM

    Wowza, you guys get way more involved with family than we ever would. Which may speak to the kind of person I am. But, glad you learned something and got out basically with your clothes on.
    Elroy recently posted…Israel – Masada & Dead SeaMy Profile

  8. Comment by Mrs. Frugalwoods — January 27, 2015 @ 9:41 PM

    That’s wonderful that the house sold! And, it sounds like it was a good decision initially–it’s such a blessing to have family nearby. I’d vote for investing the breeze-fall 🙂
    Mrs. Frugalwoods recently posted…Why We Don’t Meal PlanMy Profile

    Mrs. Maroon Reply:

    The very best part of the venture was for Mr. Maroon’s mom to be a grandma to Mini #1 so often, given her close proximity. Through all the headaches of moving and buying/selling the house, I would still make the same decision today if I had to do it over again – simply to give her as much grandma time as possible. We talk a lot about money here, but her time was priceless.

  9. Comment by Kayla @ Femme Frugality — January 28, 2015 @ 10:17 AM

    Sounds like you’ve made good use of your breeze-fall. I’ve got one coming at the end of this week (though smaller than yours) in the form of my 2014 performance bonus. I can’t wait to decide what to do with it!
    Kayla @ Femme Frugality recently posted…Budget Hack: Keeping Track of Expenses CreativelyMy Profile

    Mrs. Maroon Reply:

    Congrats on the performance bonus!! We’ve gone round and round about what to do with extra money. At some times it feels like a lot to consider. But then again, it’s a wonderful problem to have.

  10. Comment by Christina @ Embracing Simple — February 2, 2015 @ 3:27 PM

    Congrats on selling! I agree with the sentiment of how we can be our own financial enemies by being uneducated with how to use “extra” money. I still feel like I have so much to learn in this department!
    Christina @ Embracing Simple recently posted…February GoalsMy Profile

    Mrs. Maroon Reply:

    Well, as cliché as it sounds, I’d say the first step in learning how to make smarter choices with extra money, is to recognize that you might be your own enemy. Without understanding your own shortcomings, how on earth can you hope to improve upon them?

    The process for deciding where to send extra money is actually quite simple, despite how much we complicated it and muddied the waters… decide what you want most. Then throw all of your effort towards it. Even if you slip up and don’t make the optimal decision, you’ve certainly come out ahead in just doing SOMETHING that helps you make progress towards your ultimate goal.

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