Houses, Hurricanes, and Bull*hit

Bullshit

This week has been so crazy busy that I’m really glad I wasn’t trying to work a normal job. Then again, I’m always glad we don’t work “normal” jobs…..but the last few days have been just nuts. Leading the charge has been hurricane Irma. It is a large and powerful storm…..heading for south Florida…….but it isn’t expected to make land fall until Sunday morning. Would you believe that people started panicking on Monday. A full week before the storm. The panicking was so bad, and by which I mean the hoarding, that Walmart suspended it’s “order online pickup instore” feature. The company further said that on Tuesday and Wednesday they had leased 1,500 additional trucks, in order to ship goods to Florida from as far away as Las Vegas. Keep in mind that these are extra trucks…..on top of their normal distribution networks. (Personally I’m expecting a great top line number this quarter from them. You gotta sell while the customers are buying!).

Plywood, yeah sold out. Bottled water…gone. Bread and other staples….the shelves were picked clean. Keep in mind that this was nearly a week before the storm was even in the area. No, I take that back. This was back when the storm was 1,600 miles southeast of the area and nearly a week out. Worse yet, there was no gas. Keep in mind we live up near Tampa, not down around Miami. Stations were selling out of gas on Monday and Tuesday. It got so bad that by Wednesday, the Florida governor ordered the Florida Highway Patrol to provide police escorts to tanker trucks delivering gasoline from the petroleum hubs to the service stations. Wednesday and Thursday, gas was hard to find. It was so hard to find in fact that the realtor showing us a house yesterday needed to delay the showing by an hour, because of a lack of gas. More on the house later. Today however, the gas stations are open and there is plenty of gas. Furthermore, there aren’t lines. This has been another interesting observation of public psychology.

Hurricanes

Harvey, Harvey, Harvey. Over and over, that’s all I’ve heard for a week. Harvey was/is a tragedy, but also was shaped by very different circumstances. Harvey was an inordinately slow moving hurricane, which virtually stalled for a while, and dumped an astronomical amount of rain. Exacerbating the situation, very few communities in Texas have meaningful stormwater design regulations.  I know I know, ALL regulations are bad in Texas. I have always been shocked how few ponds are built with new development there, and how many commercial developments were designed to attenuate stormwater by flooding their parking lots. You don’t really see those practices in the southeastern US, but are more common in the midwest. Throw in a very dense city, built in the historic floodplain, and clay soils……and you get the mess that we’ve seen over the past couple weeks.  Any city that gets 4 feet of rain in a few days will be flooded, but Houston didn’t have to be this bad. (Sorry if this dialogue bored you, but I enjoy stormwater design and played a stormwater engineer in a past life.)

Anyway, Irma appears to be a fast moving storm…..and most of the damage will be wind and surf based, not from rain. With Harvey fresh in everyone’s minds however, the panicking began. It was all I heard people discussing. At the gym. At the store. At the park. Ugh. The panicking was so bad on Wednesday, that the news media actually started telling people to relax/calm down. Haha. First time I’ve ever heard that advice from the media! Anyway, our apartment is in a B evacuation zone……so we’ll be leaving on Saturday. I’m not so worried about the area, but our building is a 40 year old multi-story, stick built, shanty. Basically, it is about the least secure structure in our area…..and we don’t want to be inside if it tips over.

House

The good news…….we are now under contract on a house. I’ve dubbed it “That 70’s House”, because of the mustard yellow kitchen and paisley wallpaper in the bathroom. We’ll cash flow our renovations, so it could look a little rough for a while. The even better news, the house is 25′ higher in elevation than our apartment, and is not even in an evacuation zone. Amusingly, if we were already in the house….we’d be holding a hurricane party instead of evacuating. (If you’ve never been to a hurricane party, add it to your bucket list!) Oh well. The listing agent was also surprised that I wanted to go ahead and sign the contract, given the storm. I explained that I wanted a couple days added to the inspection period, but that we were good with it. Damage from a hurricane is a very binary thing. Either there isn’t any damage to the house…..or there is…… and we have the choice to repair or walk away. Remember that our inspection will take place AFTER the storm. While we paid more than I would have liked, this is a very dated house in one of the best neighborhoods in our area. On a price per square foot basis, we are below the neighborhood’s comparisons……even once you factor in the $15k-$20k in work that the house will need over the next 2 years.  Besides, I think the hurricane encouraged the sellers to quit arguing about price and sign the darn contract!

We are all about putting in sweat equity, over time, so expect to hear about many improvements and renovations in the next couple months. Also, we were able to lock in a fixed 3.625% rate (3.67% apr) on a 30 year term. If we ever getting meaningful inflation again, I’ll be happy about that fixed rate. Also, our all in PITI should come in at $1,500 per month. It is a shame that it is that high, but rents on the same house, in this neighborhood range from $2,300-$2,600 per month. The ability to profitably rent out the house, gives us an addtional comfort level. Once we close, I’ll post pictures and a lengthy discussion about the hassles of getting a “normal” mortgage when you don’t have much in the way of W-2 income.

Conclusion

With that I’ll bid you all a good weekend, and wish my friends in south Florida good luck. You guys are in my prayers. The forecast track keeps wandering west, toward our Tampa area home. If storm conditions manage to get interesting, I’ll post some photos to Twitter. Right now however, it is a beautiful and breezy day. The Little Man just got back from the park. Maybe we should go get some gas and food, now that the lines are gone and shelves are restocked. Be safe out there!

12 thoughts on “Houses, Hurricanes, and Bull*hit

  1. Roadmap2Retire

    Its interesting isnt it…you want to get access to all the essentials like food, energy etc, but dont want to wait too long — at the risk of getting too far behind and not getting any. Still, its an interesting observation on how the crowd reacts.

    Thats pretty neat if they sold the house with the weather in mind. This is the classic buy when others are fearful if it turns out to be the right deal.

    Thanks for sharing your thoughts, Bryan. Be safe and looking forward to updates once the storm is past.

    R2R

    Reply
    1. Income Surfer Post author

      Hi R2R. Waking up this morning to find out outlook from this storm has deteriorated substantially. If the track keeps shifting west, it will be very bad for the Tampa Bay area. We’ll see how this all goes and catch up next week
      -Bryan

      Reply
    1. Income Surfer Post author

      Haha, you’ve been at the Flexible Independence game longer than we have for sure. There are certainly lenders that will do it, but normal lenders just don’t know what to do. We were able to go through a normal lender, but the down payment was certainly higher. Have a great weekend
      -Bryan

      Reply
    1. Income Surfer Post author

      Thanks Bert. We could use some prayers down here because the shift in the forecast track has certainly worsened the outlook for the Tampa Bay area. The storm and the house have made for a wild week. At the moment, I’m just glad that we still have a lot of inspection period still to go on the house. Will catch up next week
      -Bryan

      Reply
  2. Graham @ Reverse The Crush

    Thanks for sharing some insight on what the hurricane situation is like for you down there. Although I hear about it through the news and see it all over social media, it’s difficult to understand how much of an impact it has on day to day life. Also, It does sound like you were a storm a storm engineer in a past life lol. That said, I wish all the best and hope you, your family and friends all stay safe during the storm! Take care, Bryan!
    Graham @ Reverse The Crush recently posted…Blog Traffic Increased by over 102%! – Page Views & Social Media Report for August 2017My Profile

    Reply
    1. Income Surfer Post author

      No problem Graham. It has been a whole week, but things are starting to get back in order. We regained power AND water yesterday. There are still gas lines and the grocery stores are restocking like mad. Apparently the huge Caterpillar generator failed at the store nearest us….and they lost all the meat and dairy inventory. Oops. I’m just glad we were spared a direct hit and that we aren’t currently trying to drive I-75 south. #blessings
      -Bryan

      Reply
    1. Income Surfer Post author

      Thanks Jay. Things are slowly returning to normal. The power AND water were turned on yesterday. Incredible how much hot showers and A/C add to your quality of life. I’ll write when I get the chance. Have a great weekend
      -Bryan

      Reply

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