Chattanooga!! (?)

We just closed on our second duplex in Chattanooga, Tennessee. We closed on the first one last month. Aren’t they cute?!

How did a couple from Portland, Oregon end up buying a couple duplexes in Chattanooga, Tennessee?  We had successfully consolidated all our local holdings into two great properties in Portland but we wanted to add a couple more to our portfolio to increase our future cash flow.

The Portland real estate market has gone completely bonkers in the last couple years. Home values more than doubled in many areas. Great for my equity position but not so great for acquisition costs on new properties. We grew up here and know all of the surrounding areas very well but just couldn’t find anything that even came close to the 1% Rule.  So we started looking outside of the metro area, then at neighboring states, then at the states neighboring them… Nothing fit the ROI we were looking for.

Then an article about great cities that are up an coming popped up in my Facebook feed. Chattanooga was on the list with a photo of the downtown and it was just beautiful! The more I read about it, the more it seemed like a stable, growing economy with a relatively low cost of living and great quality of life.

I spent months lurking on Zillow while interviewing realtors, lenders and property managers. Once I felt like I might have a good team put together, we got pre approved and booked a trip!

We stayed at a fantastic Airbnb on the North Shore, walking distance to downtown, grocery stores, restaurants and nature trails. During the day we toured a bunch of pre selected homes and multifamily properties and at night we ate and drank and chatted up the locals. We had a really fantastic time and found two properties that totally fit our criteria!

It may seem crazy to buy so far away from home, but I know from experience that my physical presence is rarely required at my local properties that I manage myself. So with a property manager handling things in Chattanooga, I don’t really need to be there at all.

At this point, we feel that our acquisition phase is complete (for now). Our 10 year plan is to pay off all the rental property mortgages for maximum cash flow. We now have four properties (2 single family homes and two duplexes) on four mortgages plus two HELOCS that we used for the down payments on the Chattanooga Duplexes. In my next post I’ll share our balances and payoff strategy.


Real Estate Start

Probably one of the luckiest, stupid things I’ve ever done was to buy a house at 21 years old. I had no idea what I was doing nor do I remember the details of the terms. I was already married (NOT to Mr. Bona Fide Money) and heard that a friend of my husband’s who was our same age just bought a house. I was like, “I wanna buy a house too!” and my husband said “Well I want this new guitar I just saw at the music store.” So we bought a house and a guitar. To me, it just sounded like a fun, grown up thing to do. I had zero understanding of how mortgages worked, appreciation, equity, maintenance costs…But I did it. I got into the Portland real estate market in 1999 for a home price of $132,000. Fast forward a couple years to 2005- lost the husband, kept the house,  gained a daughter, and Mr Bona Fide Money, and was able to sell it for $237,000. $105,000 of equity in 6 years!!!  It was probably right around then I started paying attention to the potential value of real estate.

We were able to use that equity to get into a wonderful little ranch house in a fantastic neighborhood for $250,000. Fast forward to 2012, We sold that wonderful little ranch for…. $250,000. That’s ZERO equity in 7 years. Huh. No matter. We had a 15 year mortgage at 2.something percent on the ranch so we still had plenty of equity from my first house to keep our next mortgage low. The home we purchased next was $320,000 but was twice the size and on a lovely cul-de-sac. It was a pretty moderate jump in price for much more house. And that’s where we are now.

Now, does everyone remember 2006? (one year after I made fantastic profit on my first house) How fast property values were going up and how very easy it was to get money to buy houses? Well, we were also drunk at that party and bought 5 rental properties around the same time. Some with partners (family and friends!!), some on our own…all with minimal down payments (80/20’s!!!). Now, does everyone remember 2007-2009? Yeah. That party came to an end and the hangover was awful. We were stuck in a bunch of houses that we owed the same or less than what they were worth and we shared this burden with family members and friends that had very different financial resources and very different risk thresholds.


Luckily, they were all easily rented so that they almost covered the expenses required to hold them so that’s what we did. Just held on. For years. Eventually, the market went back up and we were able to sell all the houses we shared with partners for profit and one that we owned on our own so that we could consolidate our rental real estate portfolio into two single family homes with smallish mortgages that we share with no one but the bank.

It was not the most linear path to real estate wealth but we prefer to consider the money we spent holding those properties in the years after the crash as tuition to the university of real estate investing.

Now to put all that hard won knowledge to good use…


3, 2, 1…Go!

Hello! Welcome to our blog, Bona FIde Money. The name is inspired by Holly Hunter’s character in “Oh Brother, Where Art Thou?”. She tells Ulysses that she won’t be with him because she’s got a new suitor and he’s “bona fide”. (Financially responsible) Then my husband noticed that there is an F.I. in bona fide so there you go. Also, it’s fun to say.

We are a married couple living in Portland, Oregon. Mr. Bona fide Money just turned 4o years old last month and I will do the same this month. We are planning to both quit working full time and be established as “Financially Independent” at 50 years old. That’s a nice even 10 year count down. This blog is our accountability journal as we work towards this goal, as well as a way to share helpful life hacks and connect with this super resourceful, fun community.

We have 2 children- a 15 year old girl and a 10 year old boy. Retiring in 10 years means the boy child will be well on his way to adulthood and our lifestyle options will likely be very open. Of course, we are well aware that you never really know what to expect from the future, but that is part of the point of F.I. right? Financial agility!

We first heard about the concept 6 or 7 years ago after reading “The 4 Hour Work Week” by Tim Ferriss. The time management and passive income concepts were very exciting to us but we never really figured out the “muse” necessary for that all important income stream. Fast forward a couple years to 2015. We were on vacation in Mexico and I came across the New Yorker article about Mr. Money Mustache.

I was instantly hooked. So was my husband. We read every one of those posts from start to finish. Full immersion. It was helpful that we were on a leisure vacation and had lots of time to kill.

Full disclosure- We are not hardcore Mustachians. I am not riding my bike everywhere. Or anywhere. I totally get why he advocates it, but I just don’t wanna. I do, however, drive a 2010 base model Prius. And I work from home. So there.

What we loved so much about MMM it is the clearly outlined goal. What is possible and a way to accomplish it. We have always been frugal and ambitious by nature but without clear direction. This completely validated our natural tendencies and inspired us to really take a hard look at our spending and to define our lifestyle goals. It’s way too late for us to retire at 30, and 50 isn’t super early, but we have spent the last couple years getting the hang of how we want to spend and enjoy our time in the present and how to also plan for the future. We’ve designed a pretty sweet life for right now but we definitely work a lot. Too much. We want to make more things and learn another language and learn to play a musical instrument and to experience slow travel and… and… and.

Mr. Bona fide Money is a software engineer with a BIG company. Data architect, I think. I honestly have no idea what he does. But he does a lot of it. Whew! First requirement for F.I. is “be a software engineer”, right? Good thing we’ve got that going for us. Otherwise, I’d be screwed. Just kidding! It’s totally not necessary. It’s just common and compatible with the types of peoples that pursue this sort of thing. I am not a software engineer. I am a hairstylist, a realtor and a real estate investor. 3 side hustles that equal full time employment and income.

We hope to achieve our financial goals primarily through buy and hold rental properties. We do all the other stuff we are supposed to-contribute heavily to our tax deferred retirement accounts, spend very intentionally, live in a house with a reasonable mortgage, and drive paid off, basic cars. In the next couple posts, I will share our real estate history, portfolio and strategy.