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- Aug 9, 2020
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My wife and I were both 27 when we bought our first home in 1980. We never lived in it. The three bedroom townhouse was rented to three Penn State students, in clear violation of the property's restrictive covenants. We put 50% down on the $47,000 purchase price, planning on positive cash flow on the rental, until I graduated from law school three years later, at which time we planned to occupy it. Things could not have gone further south.
After the first two years, tenants started moving out, and the newer ones became an issue with on time rent. As a second year law student, I now understood I held a lease with terms that weren't legally enforceable. Even if they had been, action from five states away would have been nearly impossible. Graduation finally came, and I couldn't get a job, finally hung a shingle two hours from my home town.
Interest rates at the time hit 14%. We sold the place at a $5000 loss to raise cash. My failed practice took what was left within the next year. Expensive lesson, but I never made a major financial error afterwards. I made up for the beating on the townhouse when I bought my current home two decades later, on 5% down, selling my 1960 Chrysler 300F for the down payment. We've lived in it for 25 years now, refinanced at 3.5% in 2011. This one will be paid off within the year, and I gained $400,000 in appreciation.
I lost my corporate gig in a final round of layoffs three years after I closed on the house. Staring at that mortgage payment was a tremendous motivator. In the era before electronic logs, I ran my truck like the devil was chasing me, and managed to keep the wolf from the door.
After the first two years, tenants started moving out, and the newer ones became an issue with on time rent. As a second year law student, I now understood I held a lease with terms that weren't legally enforceable. Even if they had been, action from five states away would have been nearly impossible. Graduation finally came, and I couldn't get a job, finally hung a shingle two hours from my home town.
Interest rates at the time hit 14%. We sold the place at a $5000 loss to raise cash. My failed practice took what was left within the next year. Expensive lesson, but I never made a major financial error afterwards. I made up for the beating on the townhouse when I bought my current home two decades later, on 5% down, selling my 1960 Chrysler 300F for the down payment. We've lived in it for 25 years now, refinanced at 3.5% in 2011. This one will be paid off within the year, and I gained $400,000 in appreciation.
I lost my corporate gig in a final round of layoffs three years after I closed on the house. Staring at that mortgage payment was a tremendous motivator. In the era before electronic logs, I ran my truck like the devil was chasing me, and managed to keep the wolf from the door.
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