*** This post is the last of a 3 part series. The first post discussed the rise, the second the fall, and this post is my recovery. I hope you’ll stick around to check them out and possibly learn from my mistakes. 😉 ***
A quick recap – The first post of this series spoke about my love affair with real estate. How I stumbled into buying my first condo at 24. How I quickly sold and bought a new one in the city at 25 and how I turned that one into 2 more before leaving the city for the burbs a few years later. Part two discussed the outcome of all those properties when the real estate market took a dump. What happens when the world around you crashes? When your tenants stop paying their rent? When the husband you just married turns out not to be the husband you were hoping for? What happens when you quickly realize that you need to save yourself from the sinking world around you?
And this post? This post is about starting over. Regaining perspective. And becoming the person I was before the shit hit the fan. This post is my rebirth…
When we last left off I was at the bottom…well, that’s not true. The bottom happened before my last place sold. The bottom came when I gave up hope.
In October 2012, a friend of mine was helping me clean the studio that my not so lovely tenant had destroyed prior to moving out. The tenant had worked at my husband’s restaurant and had…some issues. I felt bad for her. I took her in like any other wounded bird I passed on the street. I let her move into that unit, gave her a lower rent (at my cost) than I would normally charge, and listened to her excuses each and every month when rent time rolled around. 8 months later and 4 months rent short, I told her she had to go. She threatened me with lawsuits and I told her to bring it on – she never signed a lease. I was done with her bullshit and happy to call her bluff. I told her to have her attorney call mine and they could settle it for us. She immediately wrote back that she would be out of the unit the next week. Had I not needed a place to stay, I probably would have let continue to live there just out of pity…
I just couldn’t believe a girl in her late 20’s was so desperately fucked up. I mean, hadn’t she ever heard of a budget? Didn’t she know the dangers of the party life? Didn’t she have any friends to pull her back from the edge? Yeah…I judged…and then I caught a glimpse of myself in the mirror and took a long hard look at my life. I was kicking a broke druggie out of my studio because I was leaving my husband. I was judging a girl who put all her flaws on the outside while I desperately tried to hide my own ugly warts on the inside. My failed jaunt at real estate had put me in nearly HALF A MILLION dollars in mortgage debt. My tenant might have been living paycheck to paycheck, but I had sold my soul and the idea of my first born child to the devil – Greed…or Bank of America depending on which way you look at it. Comparing myself to this poor girl, I realized I was no better. I had finally hit bottom.
The very next week I found myself scraping dried vomit off the side of the toilet (the tenants, not mine), blathering on to my friend asking her in my own desperation, “what am I supposed to do next??”. I had just left my husband, could barely get up the energy to work, and this studio that I was moving into was behind on payments and soon to be short sold. I had already lost 2 others and this was the last domino to fall. Things looked bleak. After 20 minutes of me crying about the situation my friend took the scrub brush from my hand and made me look her in the eyes. All she said was, “Why do you have to do anything? Just wait. Breathe.”. She was right! I may have been at my bottom, but the difference between me and my tenant was that I was aware of it.* Knowing that, empowered me to dig my way out. I guess all I needed was permission.
So how did I do it? Looking back now, I see that I followed all the stages of grief:**
1. Denial came first. I followed my friends advice and took time to breathe. I did absolutely NOTHING for a couple of months. It was winter in Chicago. Cold, dark, and never-ending. I barely worked, I didn’t leave the house unless it was to walk the dog, get groceries, or some familial obligation, and I didn’t write (I stopped writing my blog. The one constant joy that had been with me through the entire marriage.). I spent months eating dinner in my bathtub trying to soak off the shame I felt from failing. I watched movies. And I cried. A lot. I was so embarrassed of myself that I didn’t want to ask for help. I had always been the rock for others and I didn’t want them to see me crumbling. Pride is a wicked emotion. It can build you up but it can also break you down. I was broken. I needed this time to heal myself.
2. Anger – After a couple months passed, I caught a second wind. I got up and got out. Spring was coming and I realized I couldn’t just sit in my tub drinking wine and eating cheese and crackers (the only food I could stomach) for the rest of my life. It was time to fight back…and I was irate!! I contacted Bank of America. I fought with them, I reasoned with them, then I kicked and screamed and tried to change their minds about my property. It did no good. I told the voice at the other end of the line “if I couldn’t modify my loan then I don’t want to live here. Where can I send the keys?”. She chuckled and said it didn’t work like that. I had to wait it out. A few months later the unit finally sold. It was August of 2012, and I was finally free..
3. Bargaining – A friend who lived in the same building was moving out at the end of September. I spoke with her landlord, explained my situation, and told him I would pay the first 6 months up front and in cash. I knew my credit score was shit and I had been saving all my income (minus taxes and assessments) during the short sale process. He was extremely understanding and took me at my word. Instead of 6 months he asked for 2 plus a 2 month security deposit. Cash in hand I met him to sign the lease at a Starbucks…I didn’t even bother to buy a drink. For the first time in 9 years I was going to be a tenant. I packed the few belongings I had left (to this point I had moved 5 times in 6 years…I was getting VERY good at it!) and brought them to a storage unit in the city. I had one month to kill before I could move in. I was going to Spain.
4. Depression. This stage had already been looming since leaving my house but now I had the time to focus on getting past it. The past 3 years of losing my properties had cleared my schedule of responsibilities so I decided to take some time to clear my work schedule as well. I had walked the Camino De Santiago before but never in this mindset. I first walked it in 2005 when I was young, dumb, and not mentally prepared for the challenge, quitting one week in. I walked the remaining portion from Burgos to Santiago de Compostela in 2011, only one year after our wedding and already I was trying to escape. But this year, in 2012, I was walking with purpose. I was trying to untangle the past 9 years of my life…seeking some kind of answer for how it all went so wrong. I walked 500 miles in 23 days…some might say I ran, but I disagree. When your only responsibility is to get up, brush your teeth, and walk, it is easy to pass the miles by foot – it is far more difficult to deal with the never-ending stream of thoughts whirling about your brain. I spoke to very few people in those 23 days. I walked alone, I ate alone, and slowly I was able to process everything that had led me to this point. The answer to all my questions started and ended with Me.
5. Acceptance. This is such an important piece of the puzzle. While I was walking, I finally realized how much of a part I had played in this colossal downfall. I had blamed everybody for my failure except myself. I had blamed the Realtor who had sold me my first place. I conveniently blamed the fact that my boyfriend moved in for why we needed a larger space even though I knew my place was too small to invite him. I blamed the mortgage guy for screwing me at closing. I blamed my husband for being exactly who I knew he was when we met (we both did that…see, I still can’t take the blame for that!). And my favorite – the one I repeated over and over to anyone who would listen – I blamed the banks for all of my properties. I felt vindicated when I told people that I had played the game by all “their” rules and that “they” had changed them….I LOVED that excuse!! It’s you not me…classic! Never once had I taken a moment to blame myself. To realize that I had played a part in every single one of those decisions. I finally saw the entire picture with complete clarity…
I had purchased all of those properties with 20% down. I had paid every month even when my tenant’s rent didn’t cover it and I operated at a loss. I had done what I thought I was supposed to. But in the grand scheme of things, what I thought I was supposed to do wasn’t enough. I had leveraged my future income against my current finances and I put too much trust in outside variables. Would my tenants be able to pay? If they didn’t, what was my plan? If the entire market falls and rents drop drastically, how low could I go before I couldn’t afford to go lower? The answer was not low enough. Just owning my properties I was operating in the negative each month. Vacancies, deadbeat tenants, and the low rental market were only part of the equation. Not being able to cover the tremendous amount I had leveraged was most definitely MY fault – not the banks. It was me that signed those loans and greedily grabbed the keys to this life I would now spend years recovering from.
Needless to say, this experience humbled me. I look back on the whirlwind that got me to this moment and can’t help but be grateful for everything that I learned about myself along the way. I learned that I need to slow down when making decisions. I need to take those extra moments to breathe. And, most importantly for me going forward, I learned that I need to be kind to myself. I need to forgive my stupidity just as easily as I forgive others in my life….this point I am still working on. I also know that I am strong, resilient, and completely capable of falling down and getting back up again.
So where am I now? Pretty good! Many of you have read my prior posts on my insane savings rates, selling my wedding dress (the one tangible item I had left from our marriage), and challenging myself (and you) to go public with goals whether they be physical or financial…and for that, I am so grateful!! August 31 marked 3 years since the closing day of my last short sale. In that time, I started hustling at work, saving everything I earn and lowering my expenses.
I spent one year as a tenant and, when the opportunity arose, I jumped at the chance to buy again. This time in cash. I purchased my unit for 65K on October 2014…a steal considering how much I had lost! I now live in the same building, on a higher floor, with a better view, and NO MORTGAGE!! I had to sell some things to buy it, but I wouldn’t trade the feeling of security for anything in the world.
Where do I go from here? Now that I own my home, I am focusing on the future….
Had I not gone through what I did, there is no way I would believe I am able to achieve such a goal. But now I am energized and, like anything else, I will push hard for it. My 4-year-old self will knock door to door until enough wrapping paper earnings have been saved. And you know what? If it all goes array, I won’t crumble. If my goals change or if life throws me a curve ball – I’ve already been there and done that. I will pick myself up, dust myself off, and continue moving forward.
The rear view mirror is there to glimpse at whats behind you, not to dwell on it. Keep looking forward to the road ahead.
Until next time…
*A year later my friend and I, the same friend who helped me clean 3 inches (not an exaggeration) of cat fur off the fan blades of the vomit tenants unit, met for lunch near my neighborhood. It was a rare moment out for me as I was still battling depression and the reclusive nature that went with it. The restaurant we chose had a nice patio outside so we looked past the otherwise sad looking building and took a seat. 5 minutes later, we were greeted by our waitress…my former tenant. She was shocked to see me. Her face wore the same look I often saw when I would meet her at the train to pick up the rent and she “forgot” we had made plans to meet…”I forgot it at home” was always the excuse. On this day, she looked awful. She was skinny, her hair was greasy, her eyes were dull, and her teeth were decaying. It was obvious she was still using.
I felt bad for her…I didn’t know how much lower she could go, but it was clear she had not yet hit bottom. We exchanged a few pleasantries, she brought us some kind of weird shot as a peace offering, and my friend and I bagged the lunch idea in favor of a quick appetizer so we could eat and run. Later that night, like 3 am later, the tenant called me. I answered as I had many times in the year before she moved out. She was obviously high and barely coherent. She was crying about how she had treated me and the money she owed me and the fact that I was the only one who had ever been nice to her. She was broke and soon to be evicted. I had been down this road before with her and had learned one thing – you can’t force an addict to come clean. Any help I could offer would be a temporary band-aid to her addiction. I told her that I could not give her money but if she ever needed help in another way she could call me. I forgave her the money she owed and, before hanging up, I told her I wished her well. She never called again.
** This series of posts was started back in July – due to the nature of writing it was extremely painful and took a long time to get it just right to release my shitty experience to the world. Earlier this week, I listened to Melanie from Dear Debt be interviewed on Farnoosh’s podcast, So Money. She spoke about following the same stages of grief when she was in debt. I am glad to see great minds think alike!! Knowing this, I am guessing there may be some people out there reading who may be wondering where to start. To you I say, just take a moment to breathe. When you gather your strength, go back through these steps. Feel them completely – you will get through this and I am always here to help. Also, if I could give one piece of advice that you can listen to today – do not take shame in your mistakes – it doesn’t help to resolve them. Accept them and move forward. Use your mistake as a learning experience. There is no such thing as perfect – I know, I really really tried. Perfect is boring. Make mistakes, fix them, move on. The ride will be so much better with a few bumps in the road – I promise.**