Coffee heat rising

A Little Luck, A Little Smart$

lightrail-Phoenix_Exterior_7417.2008This morning as I drove through the ‘hood toward the freeway, there to connect with points north and west, it crossed my mind that in the years after my son’s father and I divorced, I’ve benefited by a strange confluence of raw luck and moderately smart financial decisions. Most of these have had to do with real estate, though some are more directly tied to the economy.

After I’d had a couple of years to recover from the Parting of the Ways, I decided to buy a house — mostly by way of putting some distance between myself and the drive-by shootings near the place where I was renting. By sheer chance, the Realtor I hired, brother to a former City of Phoenix mayor, came across a house about two and a half blocks from the present Funny Farm.

Also by chance, the economy happened to be in the doldrums of the most recent savings and loan fiasco. Arizona was one of several epicenters and so was experiencing a major real estate crash, with borrowers defaulting, banking institutions collapsing, the federal government taking over property…and on and familiarly on.

My guy looked at the house in question, a single-owner property craving updates but not needing any truly major, bone-surgery-type repairs, and calculated. The owner, a widow, had died, leaving the house as part of an estate that needed curating. The place had been on the market for three months: nary a sign of moving. Meanwhile, the estate was having to pay taxes and utility bills, as time ticked on and property values continued to plummet.

He mulled this over for a day or so, after he’d shown me all the other properties on his list he thought I could (marginally) afford and watched me reject them one after another, then took me back there for comparison. I said welllll… it was better than any of the other dumps we’d looked at.

Forthwith he made an offer to the seller: 30 grand under the sale price.

Forth-forthwith, the seller grabbed it, and I was the happy owner of an aging tract house on the fringe of North Central that needed a new kitchen, new flooring, and new landscaping. Most of the stuff, SDXB (who moved in with me) and I could live with. Soon I had new countertops installed; eventually I had the floors tiled and the front and back yards xeriscaped.

Incredible luck.

The house turned out to be sturdily built; the neighborhood mostly pretty good except for a questionable area across Conduit of Blight Boulevard, the main drag to the west.

Day came when I was cruising up a freeway with the brain in idle. Through that twilight state, a thought dawned: when the alimony ran out, as it would soon, the mortgage on that house would consume slightly more than half of an entire month of my pay, which was more than I’d ever earned in my life and slightly more than the county’s median family income. By then I’d concluded it was time to eject SDXB. Without his contribution to the mortgage in the form of “rent,” I would not have enough to eat on after I’d paid the lender.

So, over my financial advisor’s strenuous objections, I combined a small inheritance with a chunk of my savings and paid off the $80,000 mortgage in full, getting rid of an 8.5% interest rate.

Surprisingly smart move.

The house was paid for. That allowed me to throw out the boyfriend and replace him with a German shepherd. And I lived there happily for quite a while, if not ever after.

A paid-off roof and a reasonably frugal lifestyle allowed me to stash substantial amounts of cash into savings. This worked out well.

Eventually I grew restless. Two houses across the street acquired problem owners: A single woman bought the place across the street from me. Her son had inherited his father’s vicious personality, and while he left the neighbors alone, he was seen beating up a girlfriend and terrorizing his grandparents. Then the people next door to them sold and that house was acquired by a single batshit man with two teenaged sons. He also was radically abusive, given to throwing furniture through the front windows. When he got into a fistfight in the driveway, screaming obscenities to the moon, that was when I decided it was time to move out.

Started looking around the city. The late, great Real Estate Bubble was just starting to inflate. With demand at astronomical heights, finding a comparable place that I could cover in cash was a challenge.

SDXB, who by then lived just up the road, happened to know a couple in the ‘hood who had just put their house on the market — two houses down the street from his.

It was still the same neighborhood about whose stability I felt profoundly ambiguous. But it was a half-mile from where I’d been living and well south of the war zone at the intersection of Conduit of Blight and Slum Borderline E/W. Although I would surely have liked to move further east, a mile or two away from Conduit of Blight, the price was right: I knew I could sell my house for what I would pay for this one. Plus the owners had cherried it out with all new kitchen cabinetry, nice bathroom fixtures, a pretty new covered deck with new sliding doors opening onto it, and a (supposedly functional) new watering system. And it had a pool, which I coveted.

Although the watering system was a joke and much of Former Owner’s DYI renovation was out of code, the place turned out to be a good buy. Real estate values continued to run amok, and within a few months the house was valued at $150,000 more than I’d paid for it.

Raw luck!

During the Great Recession, the value dropped to less than I’d paid for it, but since I wasn’t paying a loan and so wasn’t paying interest on a make-believe value, it didn’t matter: you don’t realize a loss until you sell. Today the house is now once again valued at about $125,000 more than I paid for it.

Luck.

As I drove toward Conduit of Blight this morning, I noted how much better the houses look. The place has gentrified mightily as the Lightrail Boondoggle has neared completion. Young urban types want to live near a lightrail. Not that any of them would commute on it: it’s just the politically correct, environmentally correct principle of the thing, I guess.

A whole raft of young marrieds has discovered the ‘hood — the only remaining middle-class neighborhood in North Central with even marginally affordable prices — and they’re gentrifying like mad.

Luck.

O.K. I’m glad I decided to stay in the neighborhood.

But soooo glad I moved a little further from Conduit of Blight. The tenements along that road are definitively NOT improved by the city’s shiny new train project. The train brings more noise and more characters you’d just as soon not have know about your neighborhood, more impossible traffic lights and more crazy-making traffic. So I’m happy to be mostly out of earshot from that thing and enough of a hike to discourage most of the drug dealers, prostitutes, and flakes it brings to us. And very, very happy for the young people who think the presence of a commuter train makes these houses worth buying and fixing up. 🙂

Very smart. I guess.

This afternoon a cop helicopter began to buzz the corner where my old house resides. It practically grazed the roofs, and the cops were hollering through a loudspeakers for people to get inside and stay out of the way. This went on for an hour or 90 minutes.

It’s not an uncommon occurrence. When I lived in that house, I could set my clocks every Friday and Saturday night by the 11 p.m. fly-over. The cops would park over my house right about 11 o’clock, almost every Friday and every Saturday evening. It was mildly annoying, because of course it would keep me awake. But with a German shepherd habitually described by my son as “batshit” parked at the foot of the bed, I figured WGAS? And honi soit (or legless soit) qui has the nerve to mal y pense.

And of course, it was in my present house that the Great Garage Invasion Episode occurred. So being a half-mile or more from the war zone does not necessarily make one any safer.

Raw Luck? Or Smarts?

It’s kind of a toss-up, I guess. Given a show-down, I’d say Raw Luck has beat out Smarts here. Nothing that happened, except maybe paying off the mortgage, was especially calculated. Everything that has been good probably has been a matter of chance or of being in the right place at the right time.

Isn’t that just like life?

Image: By KINKISHARYO – Phoenix_Exterior_7417, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=31119699

4 thoughts on “A Little Luck, A Little Smart$”

  1. I think with that much ‘luck’ you somehow knew what you were doing. You had hunches one way or another that led you down some of the twists and turns, and it sounds like they worked out pretty well.

  2. I know what you mean. When I reflect back on my financial life, I realize that while I have made some good decisions and have good financial habits, there’s been quite a bit of luck involved, too.

    Knowing when/where to buy into real estate always seem to involve quite a bit of luck. It’s possible to analyze a city and neighborhood only so far, and national trends can be hard to spot in advance.

  3. It is hard to know which way to jump when it comes to buying real estate. Especially in a city like Phoenix, which is very spotty. Most of the centrally located housing is low income — there are a LOT of working poor here. But the city is characterized by enclaves, so that you can have a patch of million-dollar homes abutting an area of $150,000 houses and low-rent apartments. SES is a little more consistent when you get out to the suburbs, but the houses are so cheaply built they’re considered “old” at 10 years and so are likely to depreciate or at least not rise in value. Also the city and county will do things like allowing builders to throw up a tract right in the path of a planned freeway — even if your house isn’t demolished a few years on, you could find yourself living next door to an interstate.

    I guess “good luck” is partly a matter of chance and partly sort of at least vaguely knowing what you’re doing.

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