942 days is a long time when you think about it. It looks a little longer when you put it into days than if you say 2.5 years, but it’s easier to count the time down when you can subtract from it more often. 22608 hours would seem like a joke. And it would be difficult to update that often. I’ve won my battle with Credit Card debt. I am officially credit card debt free right on schedule, as aggressive and insurmountable as that was in the beginning, but I did it. It feels great to finally after so many years get out from under that mess.
The next challenge is going to be a 2 person effort: Paying off a Condo in record time. 942 days, to be exact, starting today. I am hoping to be able to keep writing updates, blogging on a daily basis on how it’s working out, to pass the time, but also chronicle the adventures for anyone who could use some financial inspiration of their own. This is truly going to be a nearly impossible task to accomplish, but I think we can do it.
Some history:
We purchased a condo back in November of 2005 in a lower middle class area for $135,000. It was, in hindsight, a move born of ignorance and fear, as house prices continued to shoot up at what seemed like 10,000’s of dollars every day. We were afraid that if we didn’t act quickly, we would be shut out of the housing market forever. A lot of people, no doubt, were feeling the same way. Fortunately, I was not prepared to spend $250,000 on a house I didn’t like. Long story short, this place was excellent for the price at the time, and we bought it for asking. With an interest only 80% mortgage. On stated income. And financed the rest of the loan on a 20% HELOC. Oh yes, we were young and stupid. Go us.
It doesn’t end in tragedy, however, for though we purchased a property by, essentially lying, and succumbing to the lure and promise of a low low payment, I did make the correlation (thank you, mom!) that by paying the minimum payment requested, we would be paying nothing towards the principal of the house. Tight as it was, I insisted we pay a large chunk more. Continuing on good luck, our interest rates have dropped significantly, and while we owe 100% of the first mortgage, we have paid off, in 3 years, $7,000 of the HELOC loan. Not bad, if you look at the record around the USA, and especially in Phoenix!
The bad news is that other owners in the complex weren’t so diligent, and subsequently, prices have dropped along with the rest of the State, and Country to a devastating median selling price of $60-$75000. Ouch. Walking away and letting the bank deal with it had been considered quite often. Neither of our jobs are on this side of town, we’re not overly happy with the clientele of the neighborhood (our 3 neighbors, however, fortunately, are pretty amazing.) and well, shit, I feel like I can do better than this. However, I have somewhere instilled in me a sense of moral obligation to not walk away from bad choices I make. After all, someone else is just going to have to clean up after me. (Thanks again, mom!) And I vowed to see this through to the proverbial end.
I spent a little over a week running through different pay off scenarios, trying to figure out how fast we could feasibly pay this place off. I went to Suze Orman’s (who’s show I watch regularly) website, downloaded the Financial Budget Spreadsheet (requires Microsoft Excel Compatible Viewer to view, Excel to edit) and plugged away for around an hour. 4 years and 11 months was pretty close to a payoff date as I could come up with if we continued to spend like we have been. I was told to find a way to make it happen in 2 years. “Impossible!”, I said, and so the challenge lines were drawn. Cutting out every extra expense (except netflix, and cable internet), cutting out eating out, strict grocery/toiletry budgeting, and foregoing trips that were planned or looking forward to, and cutting way back on driving (for me, that’s easy, ASU offers an intercampus bus (it’s a freaking TOUR BUS) which is easy for me to get to), And devoting every extra red cent to it, we came up with a 2.5 year plan, and that is what we are going to do. After, of course, we save up a bit of an Emergency Fund.
Once the condo is paid off, the plan is to rent it out for a 500-650$ a month profit.
So expect some changes to the blog page. I’ve got some interesting ideas to start implementing.
