Steph: I feel like I stumble over every single time.

Kristina: Welcome to-.

Steph: Okay. This is-

Kristina: That's good.

Steph: Just the name of our podcast is so, evades me. Welcome to the Open House Podcast where women talk real estate. I'm Steph Douglass.

Kristina: And I'm Kristina Modares. Welcome.

Steph: How are you? Kristina: I'm good. Today is, what? Sunday. I've had like a very relaxing weekend of just reading, and hanging out, and trying to figure out what to do with free time.

Steph: Right? It's so weird. It's been the past week for me too, is like, wow, we have our business running, and we have to figure out what to do with ourselves.

Kristina: I know.

Steph: And relaxing is really good because we've talked about this, how it frees up your mind, but Alan's having to teach me how to relax.

Kristina: I know. I hate that. I don't know. I feel like I used to be a lot more creative, and I wanted to do more projects, art projects, and writing. And it's hard to do that right now. So, I'm trying to just do nothing, and allow that discomfort. And hopefully, my creativeness will start to come back.

Steph: It's like our brains have been in business owner mode for so long that we've been so efficient. Like everything has to be efficient. Like what are we doing with our time right now? How's it going to move us closer to our goal? But that's no way to live. Kristina: No. Because what do we want, ultimately, Steph?

Steph: Yeah, exactly. Freedom.

Kristina: We both want these lives of like, "Oh, we can do what we want when we want." But then I think that's so important for business owners to realize is like, "Okay, why are you doing what you're doing?" And if it is a lot to do with financial freedom, just make sure you remember how to relax, and have free time because you're going to work, work, work, work. And then once you do have more free time, you're not going to know what to do with yourself. And that is very scary.

Steph: It is very scary. But I think really this quarantine ... I mean, obviously, not everyone is quarantining still, but I feel very much like we're staying inside, we're trying not to do anything. And so, we're still in that mode. And it's like a blessing in disguise because it's teaching me relaxing can look many different ways. And you're right, if you forget how to relax, it could be detrimental to everything. And you just keep on pushing and pushing until you're sick emotionally and physically.

Kristina: And I think that how I used to spend my time, it was a little distracting, which is fine, I guess, in some ways. It wasn't distracting in the way of, "Oh, I'm just on my phone." It was, I'm going to different events, and concerts, restaurants. And I think now that we're not doing that ... I mean, yeah, we are staying inside mainly, like I'm always at my house. Eric comes home, and he's like, "There she is again." I'm like, "Where am I supposed to go?"

Kristina: I think it's a good time to try to reflect, and think about the things you used to do as a kid. Like what did we entertain ourselves with? How can we pay more attention to the world around us? Like even I was just sitting on my porch this morning just looking out at like bugs or birds, or I don't know, I was just trying to be more ... What's the word I'm trying to look-

Steph: When you're slow and deliberate and ...

Kristina: Probably.

Steph: Not reflective?

Kristina: No, just not introspective. Well, I don't know, but-

Steph: Yeah, but I agree, even though you don't know the word, I agree. There's a lot of lessons to learn from like being slow, and deliberate with your time. And I was not doing that before. Like you're right. There was events, and there were social things that I didn't want to go to, but feel very obligated to go to. And the absence of those allows me to refocus on what's important, and how I actually want to spend my time.

Kristina: Yeah. That's very true. Yeah. Well, I'm excited to interview our next guest. Michu. Steph and I both worked with her. She was one of our clients who bought a house.

Steph: And how did you meet her? Kristina: I don't remember exactly, but I think this was a few years ago, and I was just going to all these different women meet ups, and organizations in Austin. And I think someone was like, "Oh, you should talk to my friend, Michu. She's really cool. And I think you guys would get along." And so, we just met up, and hung out for a little. And then I think later she talked to me about her and her husband, Lope, their interest in buying property. And she expressed how she was a little nervous about it, but she was excited. So, yeah, we started looking around. I think her search took about a year and a half or so.

Kristina: I think she said it took them two years, which I don't really remember that, but I guess I was showing them homes for around that. But it wasn't like 10 homes a week. It was like one or two homes every few months, because they really knew what they wanted.

Steph: It was also very fun to hang out with them when you showed them. Because you and I both showed them a couple or you showed them much more than I did. But near the end of their search, when they wanted to see something, and you were out of town, I was like, "Oh, yay."

Kristina: They're so pleasant, and kind, and just sweet people. I wanted to go over a little the details of the home before, just so our audience knows of the home that they bought. It is a three bedroom, one bath. And it was a fixer upper. And there was like a, it looked like it was functioning, tiny home. You remember it, right?

Steph: Yeah, totally.

Kristina: There was a tiny home in the backyard. And later we realized it wasn't really working like the plumbing, and everything, but there was a structure back there. And then the home was 1400 square feet. It was built in 1966. And it used to be a duplex. And the owners before had converted it into a single family. So, yeah, just a little context of the home. So, it was listed for 380,000. Do you remember that?

Steph: Yeah, totally. We got it down so far.

Kristina: Yes. $73,000 off the sales price, which is crazy-

Steph: Because we got-

Kristina: But it was funky, but-

Steph: Yeah, 307 in Cherrywood.

Kristina: I mean, so good.

Steph: It's unreal. I mean, what do you think the median home price in cherrywood is?

Kristina: So, it was their one year anniversary for their home purchase a week ago. And we sent them some comps, and I was like, "Michu, you could probably sell your house in the 600 range." Like mid 600-

Steph: That is insane.

Kristina: Especially, with the tiny house as well. It's crazy. Anything else before we get started?

Steph: Any last words? No, let's jump into it. I said I'm excited like four times. So, the verbal ticks are real, and right in our face right now. Poor Alan, he's hearing them over and over. He's like, "You're doing that again." Okay. So, let's hear your interview with Michu. And yeah, let's go.

Kristina: Okay. I'm here today with Michu Benaim, former client and ... I mean, not former client. I was going to say former client, and friend. I'm already messing this up. Okay. I'm going to-

Michu: I've just been fired everybody.

Kristina: No.

Michu: I'm a friend. I've been friend fired.

Kristina: Okay. Hi everyone. I'm here with Michu Benaim. She is a past client of mine, and a friend. Hey Michu, how are you?

Michu: I'm doing good. How are you?

Kristina: I'm okay. Lots of meetings. I feel like you felt the same today.

Michu: Similar. Yes. Kristina: How have you and Lope been with COVID, and dealing with your business, and everything right now? And how are y'all?

Michu: We're doing well. I have to say that in a big sense the answer to that question connects to what we'll be talking about today, which is, this house has been a life saving place to have when confined for three months. It has all this light, and we were living in this tiny 300 square foot place. And I think that if this had happened before we moved, we would be climbing up the walls. And this has become a sanctuary. So, thank you. I have you to credit for our sanity in a way.

Kristina: That's funny. Because I think I forgot that you had moved from such a small space. Was it a studio?

Michu: It was, I think technically a loft, but yes. I mean, there were no doors, so, I guess, that counts as a studio. Kristina: I want the audience to get to know you a bit. Do you mind? Can you formally introduce yourself, and tell us about who you are, and what you do?

Michu: Sure. So, my name is Michu. I run a graphic design, and branding studio called In-House International, and that's that we are inhouse.com. And we work with clients to develop brands, and delightful storytelling. And we're based here in Austin. The company started in Austin. It is the offshoot of magazine called Gopher, which is the reason Lope and I moved to Austin in the first place. So, and-

Kristina: How long have you lived in Austin?

Michu: At this point, like with a couple of hiatuses, 10 plus years. Which is crazy.

Kristina: Do you think you're going to stay in Austin?

Michu: I mean, I bought a house. For me, that's like the ultimate permanence. So, I think we're sitting here. Yeah.

Kristina: That's what I wanted to ask you. Because I think a lot of people are like, "Well, I might live here for five years or I might ... I don't know." And that stops them from buying house. So, I always like to ask people like, "Is this your forever home or do you think you're going to move around or?"

Michu: I think people are braver, well, certainly, than I am. Kristina: I don't think so. You bought a ... Well, we'll get into that. You guys bought a big project.

Michu: We did. So, I think maybe that's the kind of forever home gamble we decided to take. And I'm glad it paid off.

Kristina: So, why did you want to buy a house? What was your motivation?

Michu: So, I guess, there's a few reasons. Some of them just emotional. Lope and I we're immigrants. We're from Venezuela, which is at the top of South America, not to be confused with Minnesota, which is a common thing that people hear. And the situation in the country made it so that our childhood homes, and our families, and everybody just disperse. So, this idea of having no place to call our home was all mixed up into this. But on a more practical level, we needed to stop living in such a small house. And that small house, that 300 square foot, tiny studio place was always building toward saving for a house, and the reason we wanted to buy a house.

Michu: And I guess, cerebrally, it was because it's a good investment because we needed to, A, start establishing investments because we're not getting any younger. And ultimately, because we realized that we were going to stay in Austin, at least for the foreseeable future. So, it seemed like the smarter thing to do.

Kristina: So, before buying a house, did you talk to family or ... I mean, maybe you learned some information from us, but where did you get the majority of the information that you-

Michu: From y'all.

Kristina: Really?

Michu: Yes. You know what? Now, that you say that it's weird that none of my family had any advice to give me. They didn't tell me anything.

Kristina: Well, maybe sometimes I feel like family has a lot to say, and then sometimes they're probably like, "Let your wings fly." You know?

Michu: I might be being a little unfair. My mom had stuff to say, she wanted to sometimes see the places that we were looking at. And I think just she wanted to make sure that we were setting ourselves up for a true investment as opposed to something that was just going to be very expensive, and not set us up for success. And of course, every so often I'd just check in about how ... She bought a home in 20, I think, 12. And so, she had some recent advice because I'm sure things started breaking in her own home. So, she had thoughts about that. And you know this because we asked incessant, torrential streams of questions that we were just so anxious about. So, we definitely got the majority of our information from you.

Kristina: Okay, well, I mean, that's normal. I think we work with primarily first-time home buyers, and I mean, we were never taught this. So, I think lots of our first time buyers have lots of questions, and that's totally normal. And you and Lope bought this house last year? Is it?

Michu: Yup. Actually, this past Saturday it's a year exactly.

Kristina: Oh, did we send you your one year-

Michu: I don't know. I don't check the mail every day, or every week at this point. So, maybe. I'm sure you did.

Kristina: We're supposed to email you a one year something. Okay. So, you bought this almost a year ago today, so happy anniversary. And then, so how old were you?

Michu: I was 31, and Lope, my husband, who was the other half of the buy, and the money was 37.

Kristina: Okay. And I want to get into some of the details of your home. Do you mind sharing some of that with us?

Michu: No, go ahead. If I know I'll share.

Kristina: Steph and I did an episode a week ago, and we were talking about numbers, and years, and I was like, "I need to write all this down because I don't remember." But, so how much was your home that you bought?

Michu: So we bought it for 307,500. So, 307,000 with $500. The 500 are quirky and cute.

Kristina: And I think people might not know this neighborhood if you don't know Austin, but Cherrywood is the neighborhood. And it's a, I would say, very expensive neighborhood, like one of the most expensive neighborhoods in Austin. And so, buying a house for $307,000 in Cherrywood is actually really good. But the caveat there is it was a fixer upper, right?

Michu: It was a fixer upper. I was a little difficult in that I was a little risk-averse. It seemed like a humongous investment that we'd been saving up for so many years. So, that seemed like the stakes were very high, but the neighborhood, it was really like the closest we could get to Downtown on our budget. And also, it came with a tiny house in the backyard that seemed to be more ready than it turned out to be, but it already came with a rental potential. So, that was a big a help.

Kristina: Yeah. And you say you're risk-averse, but you did it. You made that leap, and you bought the property, and you renovated it. So, I don't know, I would give yourself a little bit more credit. You bought the house for 307. Do you remember the percentage you put down for that home?

Michu: I didn't. But I knew that we were going to speak, so, I tried to remember by looking it up. And it was 12%, which is also fairly odd, but-

Kristina: I know, 12%. That is interesting. Okay, so you put 12% down. And then do you remember your interest rate?

Michu: 3.75. Very good at the time.

Kristina: Oh yeah. It's really good. Under 4% was amazing, and it still is amazing. So, you are self-employed, you have your own company, was it hard to find financing?

Michu: It was a little difficult. We didn't get a no, we got a, we need more time here. Lope was briefly working for UT, and then that was a very short adventure. And so, he came back to work for our own company as well. So, we were both self-employed, and we didn't have a big, established W-2s. So, it was made clear by the bank, and ultimately, the credit union that we went with that we needed to provide at least two years. And one of the things that was a little bit peculiar was that they not only requested the two years of income, and W-2s, and all that, but also wanted to peek at the company financials.

Kristina: Oh, yeah. P&L. They looked at your P&L. Yeah. And a lot of first-time home buyers do work for themselves. I think that's very common now to be a W-9 employee, or just like contractor, work for yourself. And it can be tricky to find financing. I know when I bought my house ... I always had to partner with people because first I worked in the hospitality industry doing events. And then when I got my real estate license, I didn't have two years backing at first, when I first started. So, it was difficult to find financing. And so, I partnered with people. But it's really cool that you were able to buy a house, even though you are self-employed. And both you and Lope were self-employed, and you were able to do it, just a little trickier.

Michu: Maybe it was a little more time-consuming. And I think maybe it didn't feel quite as like gut-wrenching because we saw that at the very beginning that Austin just got so expensive so quickly. And so, at the very beginning, we were like, "Well, we're certainly not necessarily there yet savings-wise, but we should start looking into this." So, the timelines matched up pretty well. But if we'd been ready to buy, and had that response, I can imagine how frustrating it would have been to be told, "Hey, you need to wait a couple of years before you do anything."

Kristina: Okay. So, you bought a fixer upper as a first-time home buyer, tell me how you felt. And who was more risk-averse?

Michu: Me. It's a little bit funny. I think he was far more motivated to buy. He was more levelheaded, which, I hate to say to play to stereotypes, but he'd been reading a lot about it. And I think he was more motivated to set down roots. I don't know, I was more risk-averse. I will give myself a tiny bit of credit in that the combination of him just being really motivated so that we actually did it, but my being super risk-averse, so that we had to check every decision, we made a pretty good team. And that there were points at which we got frustrated that the budget range that we were looking for wasn't giving us the results that we hoped for. Michu: And there were a few points where Lope was like, "Well, we just need to increase it." And I was like, "Absolutely not." And the truth of our finances has not really changed even though the market is pricing us out. And I think that was how we ended up with a fixer upper, because we did care far more about being close to Downtown. And so, each of us had their non-negotiables. I wanted something in the neighborhood that was part of the city, that had access to public transport, that was easy to get to. I didn't want to be in the suburbs. And Lope also wanted that, but he also wanted a lot that was large enough to add an ADU in the future. So, that was his big thing.

Kristina: Again, to give you credit. I was there through the whole process, and I saw. I mean, that's naturally what happens, right? Like if one person is super excited ... Like this happens with me and Steph in our business, she'll be like, "We need to go, go, go, go, go." And she's like, "Let's go, go, go, do this, do this." And I'm like, "I mean, I'm excited. That sounds awesome. But then there needs to be someone who's like, whoa, let's look at this a little bit. And I have to be that person." Sometimes it feels like a Debbie Downer, but I'm like, "What about all these? We got to poke holes here." That's perfect. I mean, you're a good team. You need that.

Michu: It is, but I will allow us to commiserate for a second and say being the Debbie Downer is not like the fun role. So, sometimes I'm like, "Man, can we just like switch for a second, and you can just hold the brakes for a minute?" I think that were it not for Lope having his foot on the gas, just to keep going forever with the metaphor, I don't think we would have ever done anything. We would just have sat there saving, and scrimping forever until we died. So-

Kristina: The inaction me-

Michu: Absolutely.

Kristina: I mean, it's crazy. Because you guys got such an awesome place. And in retrospect, I mean, it was a lot of work, and probably a lot of stressors. But if you hadn't moved, you would've still been in your 300 square foot place, which would not have been the end of the world, but look at what you would have missed out on.

Michu: Totally. And I think that leads us back to your original question of buying a fixer upper. I think seeing as we had all these ... You know how there's those episodes of house hunters, where there's people who have insane demands, and will not budge? We were those people, but I think we knew that where we had to give was in the condition of the house. And thankfully this was not a tear down. We didn't have to start from scratch. So [crosstalk 00:25:19]-

Kristina: How long did that actually take? How long did the renovations take?

Michu: So, from the day we signed to the day we moved in, it was a little under nine weeks.

Kristina: That's really good. That's crazy to me. Honestly, it took me a month to do my kitchen, and I'm someone who's like, "Got to go, go, go." If I have a project I'm like, "Must finish it within two weeks to a month." And to do a whole house, that is amazing.

Michu: It was one of those like ignorance is bliss situations where we had a timeline, we needed to move because paying for a mortgage, and rent wasn't fun. And I knew that we would start paying the mortgage a couple of months after. I think it was August. And so, I didn't want to have the expense of the mortgage, of the rent, and also the renovation at the same time. So, we did have a clock going which was a big incentive to us, but also we didn't have a huge budget. And I think in the sense that our business forces us to negotiate contracts all the time, and learning how to align those incentives for everybody, we realized that it's not particularly profitable for a contractor to be booked out for months and months.

Michu: And also that we could tie financial incentives to finishing on time, that if people finished in six weeks, they would still get the full amount. And we weren't going to be paying by the minute, but rather by the results. And so, being able to secure that, to be like, "Look, there might be a bonus, but also if you finish early, you get to go elsewhere, and start earning money from somewhere else very quickly." And we will have no issue with that. And they were very receptive.

Kristina: Wow. So, you had good experiences with your contractors.

Michu: I did. We used a lot of our life skills. And I think maybe that we can talk about that later, but in this, it's almost surprising to me how much transferrable stuff came from running a business. So-

Kristina: No, that's very true. I didn't even think about that. Because buying a fixer upper is one thing, but then knowing how to be a general contractor, managing people, because you can't hire one general contractor, and they can do it all, but you still ... Is that what you did?

Michu: We had a general contractor, and we were managing the project.

Kristina: Yeah. You still do. You have to. To move it along in the timeline that you want it to move along in, you have to. I mean, it's probably better than just hiring a bunch of one-off contractors, because then that's a lot more management that you need to do.

Michu: And I'm sure expense. If the general contractor has a set budget, they'll be able to negotiate. But what we figured out is that, of course, it's our house, right? So, we're the ones who have something to gain from the work being done completely, being done right, and being done on time. So, of course, we were going to manage the project.

Kristina: Yeah. And you guys are designers, so you probably were like, I want this to be aesthetically pleasing, and done right.

Michu: And I'll add an asterisk, whatever done right means we were just looking stuff up on Google constantly, like, "Is this done right?"

Kristina: Yeah. I know you have to second guess everything.

Michu: Like, it looks good, but is this going to break the minute you walk out the door?

Kristina: How did you find your contractors?

Michu: So, we have a few friends, one who develops single family home, and the other is an architect. And they were very generous in introducing us to their contractors, and it was from one of those introductions.

Kristina: Awesome. And then do you mind sharing the cost of the renovations? Like what-

Michu: Oh, I think I wrote that down. So, yeah-

Kristina: You can look it up.

Michu: The budget we had for the general contractor, the top of the budget. And we spent the whole top of the budget was 52,000. And they were kind enough to guesstimate on materials, but also you have to furnish your house, and there were additional things that popped up as things do. And so, I think that the overall cost with everything ended up being closer to 60, high 60s, 67, 68-

Kristina: [crosstalk 00:30:12] not that bad.

Michu: Which considering ... Right? Yeah. And, of course, after we had the house move-in ready, because here's what we did because I should answer your question. The house has two floors, and you enter through the top floor, and the bedrooms are in the bottom floor. And then it has an exit to a backyard from the bottom floor. The downstairs had like two bedrooms, and a very, very, very large closet, which I'll talk about in a second. And the top floor had two rooms, one, which was very large, and it's where I'm sitting now. And a very constrained kitchen, and a very dark room on the other side.

Michu: And the only bathroom was upstairs, and you had to go around the kitchen, and around the little dark room to get to it. So, here's what we did. We realized that the walls separating the tiny kitchen from everything else were not structural. So, we tore those down, and opened up the whole top floor, and moved water tanks to tankless outside, so that we could make room. Then we pushed the AC into one of the walls, had a almost six or seven foot kitchen area. Yeah, I think it's almost 15 or 16 feet long. And so, we opened up the kitchen. From the bathroom, we changed the door. So, it's on the other side, and turned it into a half bath. And then we added two bathrooms downstairs, and a laundry room.

Michu: So, that each bedroom on either side has their own full bath. That was, I think, the big stuff. We also had to replace the roof. Luckily, the person who lived here before he was a roofer. So, we made it part of the deal of the house that he would do the whole roof for a fee as part of the house transaction. It was atypical, but it worked out.

Kristina: Yeah. Okay. So, you spent around, you said 65, right?

Michu: Yeah. More like 67. Kristina: 67,000. Which, I mean, it might sound like a lot to some of you listening right now, but I got a quote to redo my kitchen, and it was 45,000. And I was like, "No, thank you. I'll figure this out on my own." So, having your entire home, and adding bathrooms, and I know all the work ... You're sitting in your beautiful house right now. I can see the background. And it's really cute, and lovely, what it was before, for 65,000, or 67,000 is amazing. It's really good because it's functional too. It's not just aesthetic. It was functional. You replaced the roof, you did some electric work, I know. And some plumbing stuff. Yeah.

Michu: Yeah. We had to replace one AC. We had to a lot of plumbing work because the downstairs bathroom are under street level. So, there was a lot to figure out there. And, of course, that number includes not just the labor, but also, you have to buy a toilet, you have to buy tiles, you have to buy materials, you have to buy wood, you have to buy everything that goes into a kitchen. When I say 67, I'm including everything. I'm including the fridge.

Kristina: Wow. That's amazing. That's really good.

Michu: [crosstalk 00:34:06] to know that you can run out of money because that was [crosstalk 00:34:10], and then there's no more. K

ristina: Did you all do any of the work yourself or did you hire it out for most of it?

Michu: We painted. We did all the installing of the like ... We weren't very handy. You don't want to be responsible, or maybe you do, but we didn't want to be responsible for the structural integrity of the house without knowing what the hell we were doing. But we did the finishes, we'll call them the finishes. We moved stuff in. We hung things on the wall. We built a bunch of furniture that ended up going into the wall. So, like the whole kitchen we assembled before it got put on, and we placed it on the kitchen area. But other than that, we were pretty useless.

Kristina: I mean, I feel very similarly. Steph's always like, "No, you do good." But I'm not like a handy person. Eric is. My boyfriend Eric is, but I am not. And we also don't have time, which I know you don't either. Even if you were handy, you wouldn't have enough time. So, I guess, let's try to do the math on this. So, you spent spent 67, so that's bringing us at so $374,000, essentially, that your house is like, right?

Michu: Right.

Kristina: For the 307 plus the 67. So, you're at like 370. 374,000, right?

Michu: Yeah. [crosstalk 00:35:45].

Kristina: That's not bad.

Michu: That is not bad. No, that's true.

Kristina: Because if you could sell your house today, do you know how much you could sell your house for?

Michu: I have no clue. I know that there's a couple of houses for sale in the neighborhood, and I should have done my homework but you are more the expert. Kristina: I was going to say I can ... I would think that you could sell your house in the high 500s or 600s, which is crazy.

Michu: That's excellent to know.

Kristina: I mean, it is because that's such a coveted neighborhood. People love it. It's so cute. You can walk places. And I don't know, it's just like a very expensive neighborhood. Because we're looking to hopefully move in the next year. And I was looking around, and I was like, "Oh, I don't want to leave my neighborhood. I won't be able to afford it." It's crazy. But I like talking to you about your total home renovation, because I think that's what we're going to have to do. We're going to have to find something that needs some love, and fix it up. Michu: I think maybe probably both of you are handy. I have seen you on the internet, Kristina.

Kristina: I can paint, and dig some holes. If you've seen my stories, I've been digging some holes unsuccessfully with the rain.

Michu: Can we talk about the hole for a second?

Kristina: We can.

Michu: Can you tell your listeners what you are doing?

Kristina: Oh my gosh. Eric and I are trying to add more space to our house by creating more outdoor space. So, we were trying to xeroscape the side of our house. I was like, "Oh, this is an easy, little project. We'll just put some gravel, and a couch, and whatever." And then Eric's like, "No. We got to dig it out, and level it, and put the plastic ... " Like he's very much into doing it right. Which is good. That's how we balance each other out.

Michu: That's good.

Kristina: But we were digging a hole, and it started raining. When I say a hole, the whole side of our house is just like dug up in a water-

Michu: Like a trench. Right?

Kristina: Like a trench. There we go, like a trench. And it's just filled with water. It was full of water. It looked like there was a moat around my house. So, we had to suck the water out. We just don't have enough time to do these projects, and we wanted to do it. So, we're still going to do it. It's just going to take [crosstalk 00:38:12]-

Michu: You're both business owners. You're both very busy business owners. So, it's great that you take all of your free time, like, time to dig up a giant hole, and then extract the water from it.

Kristina: Well, what are you doing on your free time now? We're just at home working, and working, and that's it.

Michu: That's true. Yeah, there's a lot of working, a lot of thinking about adding exercise routines to my life, and not doing it. But yeah, you're right. And I do think that it's probably the most perfect time to do home projects. If I can share a funny, and this is where timing has been on our side on many things, that we were able to wait for the right place, and the financing worked out. Other things didn't work so well. So, the tiny house, we decided to go for it, and fix it up.

Kristina: Let me tell it. So, they bought a house, and then there's a tiny house in their backyard that when we first walked through it, it looked like it needs a little work, but it didn't look that bad and sorry [crosstalk 00:39:30]-

Michu: That's right. No, exactly. It looked much more habitable than it ultimately was. So, there was an AC unit that seemed to work, but it didn't work. The plumbing has been a beautiful ghost in this story, in that we had to dig up, and move the old plumbing aside, and do it all over again. So, there was a lot of that. It didn't have a water heater because the hot water was coming from the main house across the yard. And so, by the time it got to the shower at the house in the backyard, it was lukewarm at best. And so, we had to do a whole bunch of that. We added a water heating element. And the kitchen needed a little love, and needed to be repainted.

Michu: And then we found out that it had all sorts of things. And we also replaced the floor. So, ultimately, it ended up being a little bit of a project, but we were essentially aiming to get it ready by [inaudible 00:40:44]. And we did. And we finished putting the last drops of paint on the house on the 6th of March. And the 7th of March, our booking that had come in earlier ... We took pictures of the fully aestheticized, but not completely, fully functional house because we knew it would be functional by the time they came here. On the 7th, everything got canceled.

Kristina: Oh my gosh. [crosstalk 00:41:14]-

Michu: So, we didn't have anybody stay ... The house was perfect. The bed was made, and months passed.

Kristina: So, you fixed up this little tiny house, and this was right after you fixed up your home?

Michu: It was a few months after. But it was almost like a never ending thing.

Kristina: Because where that tiny house is, that could literally pay for your mortgage payment.

Michu: Yeah. That might be true.

Kristina: It is. You could rent [crosstalk 00:41:43]-

Michu: That would be excellent because all the reasons. Kristina: Are you not renting it right now because of COVID?

Michu: We were not renting it out because of COVID. But we had a revelation, a friend needed to quarantine here after a trip abroad, and they stayed at the house. And we really didn't even cross paths much. I mean, we crossed paths on purpose, but if we weren't really looking for it. And so, the whole experience proved to be so different than the only one time that we hosted people in a separate entrance guest bedroom, which was a little bit invasive because you could hear everything.

Kristina: Oh, wait, in your house you live in now, you had tried to rent out a room on Airbnb?

Michu: And it was successful. They booked it. And so, we had a lovely family stay here but everything they said we could hear. So, we basically, spent a week in a silent retreat because we were like, "Well, if we can hear them, they can hear us. So, we need to tiptoe the whole time."

Kristina: Not ideal.

Michu: It was not ideal. I will say soundproofing might be something that had we not been completely tapped out, I might've invested in. But the other house is completely separate. And so, seeing how safe it could be has made us reconsider. And we're opening it up, but yeah-

Kristina: Yeah. I mean, and also, I really do think if you Airbnb ... I want to check back in with you in a few months to see if you start Airbnbing like how much it's covering your mortgage. Because I know this literally happened to us too. I helped Eric buy a house, and he moved in with me. So, he was just renting out rooms in this house. And it was becoming a lot to just be a ... He was like a property manager for four people in this one house. There's all this drama. He had someone move in that had a Nazi flag on their wall, and the other roommates were like, "What's going on?" So, yeah, it was a lot of drama.

Kristina: And he was like, "I just can't do this anymore. This is crazy." And I was like, "Well, why don't we try to put it on Airbnb?" And his house is a little further away from things. So, I was like, I don't know maybe families would want to Airbnb it out. I know his family when they come in for Thanksgiving, they want a big house. So, we were like, "Well, let's try to get it ready for Airbnb, and put it on there." And then COVID hit. So, we were scrambling to put furniture in it, and get it ready, and then COVID hit. And we were like, "What do we do?" So, we still had it on there. I think there was never a time that ... I don't know, maybe there was like in the very beginning of COVID that Airbnb was shut down a little bit.

Kristina: But we've had families come stay. So, longterm families are coming to just do a staycation. So, it's been a lot of people from Texas who just want a bigger house. Like imagine if you just had a baby, and you had another kid, and you were planning on moving then now it's like, what if you were stuck in a small space? So, a lot of people I think are like, "Oh, I can rent something on Airbnb. And his place is very affordable." So, it's great for people. A lot of people from San Antonio are coming down, and just coming and staying, and being in a bigger space, or just being somewhere else besides their house. So, some people who are working the construction jobs, and stuff, I think that's what we're getting.

Michu: That makes sense. And that's excellent to hear. I think maybe the change of who's coming might almost be like easier or better because if somebody stays for a long time, they'd be able to probably give you better feedback about what's there. But I'm now just having a flashback, and that's right. I think we were both in the rush of finishing a complete sort of ... Right. And so, there was talk of mattresses in our social conversations. I felt very exciting, like a very exciting person who talks about mattresses.

Kristina: Yeah. Well, it's the exciting world of real estate.

Michu: It is exciting. I mean, I think when you're in it, it feels like you're making all these decisions. And I think that was the lesson for this, there's a lot of decision-making. It's exhausting.

Kristina: It's true. Michu: But in the end, putting in the thoughts, then you get to ... Well, in our case, we get to live with it. But also the results are semi-permanent. So, that's pretty cool.

Kristina: Yeah. It is. Wrapping things up a little bit. I feel like we all have a lot to learn from like your successes, and your slip-ups, from being a first-time home buyer, and buying a house that needs renovations, what do you think was the most stressful thing about renovating your home, and what was the most rewarding?

Michu: The most stressful I think was that just first not knowing anything, and then being responsible for everything. That combination is a little bit brutal.

Kristina: I love that you said that, because everyone we talk to who has never bought a house before they say, "I know nothing." And I'm like, "It's okay." And you do know things. You think you know nothing, but you know things. And you're capable of things. It just sounds really scary to jump into things like this.

Michu: And there's part of it that's warranted, but I think there's also even the most knowledgeable buyer is going to have some uncertainty. So, that was something that in subsequent conversations you learn that there is no mystery free house.

Kristina: Yeah. That's true. You're always going to have little things that pop up. So, what do you think was the most rewarding thing about this whole thing?

Michu: Well, I mean, the house itself. Just having a place that is our own that we can ... The roof came with a lot of skylights. And for many years we thought we had black thumbs because there was not a lot of light in that small house. And now, I can pretend to be amazingly talented at plants. And I was talking with Celeste-

Kristina: With your plants. Michu: Yeah. Well, she noticed the plants, I'm like, "It seems like I have a problem." But it just feels like such an accomplishment when they're just blooming, and I have to do practically nothing. So, having a space that we've been able to not just settle into. But now with COVID, and I think that's a bright side, and obviously, a sign of great luck, but also a sign of great privilege that we've gotten to enjoy the house every minute of every day.

Kristina: Yeah. Really. That's so true. I guess, is there any advice you would give to a first-time home buyer who's interested in taking on a big renovation project like you did?

Michu: Well, maybe I have a few pieces of advice. I think-

Kristina: I have a novel.

Michu: I have a small novel. I think, familiarizing oneself with city of Austin tools, and information about homes was something that we found out about a little late in the game when we were buying. But anything that you need permits for, it's helpful to know how the process goes, because otherwise it really slows you down. And shamelessly asking people for references, or contractors is very, very helpful. And also speaking very frankly. Having the ability to speak frankly to a contractor, and telling them like, "Look, I'm not going to play games, and this is what we have, and this is what we need. And how can we make much of that happen?" And knowing what you can drop off, and what's essential.

Michu: So, having the plan in your head was very helpful. And also, what are the things that you can get second hand? So, for example, we needed a kitchen because people need kitchens. And we ended up sourcing our gas range, and oven, and over-the-range microwave, and our fridge from Craigslist, which took a long time to get something that was adequate. Because we got all of that for, I think, 800 total-

Kristina: That's [crosstalk 00:51:35]-

Michu: Maybe less. And the dishwasher was $35 [crosstalk 00:51:40]-

Kristina: I remember you told me that. And it's a Bosch one. Right?

Michu: Right. Exactly. It's from-

Kristina: I remember that. Because I remember when I was talking to you, and I came to your house, and saw everything, and I was like, "You got really nice appliances." And I was redoing my kitchen, and you were like, "Oh yeah, we got these at the home ... " What is that?

Michu: Restore. The-

Kristina: The Restore. The Habitat for Humanity Restore. And on Craigslist, and stuff. And I was like, "What?"

Michu: It's a little bit of a schlep, but otherwise, it would have been thousands and thousands of dollars. And the one thing that was such a good trick was we didn't feel aesthetically married to stainless steel. And the minute we gave up stainless steel, everything became way cheap. So, you could get really high quality, really nice appliances. And we were fine with having white appliances. I think maybe eventually stainless steel will look dated, and maybe this will come back. But in the meantime it's functional, and we can cook, which is very crucial in this time.

Kristina: My oven is white, and my dishwasher is white, and my oven was really expensive, and it's super cute. So, I think white is okay. I mean, when I say super expensive, we still got a deal, we got it half off on eBay, but it was like one of those fancy ovens. So, I think white is fine, and you would know, right?

Michu: Yeah. I mean, I think this was ... That leads me nicely, I think, to the next piece of advice, which is that your skills from your life, whatever it is that you do, just bring them all to the renovate. You don't know, everything you know is a tool for something. So, from the brief time I worked in journalism, knowing exactly how to Google the most obscure things was extremely helpful. And of course, we have a branding and design studio, so we brought all of our aesthetic expertise, and resourcefulness to figuring out how we could work with materials that weren't necessarily the most trendy at the moment or the most expensive but to make them beautiful, right?

Kristina: Mm-hmm (affirmative).

Michu: So, the selection of things could work out, and then everything project management. So, for in-house design studio, project management is part of our bread and butter, and knowing how to keep things on track. And knowing that it, ultimately, even if you have a contractor, it is your house, and your responsibility. So, knowing exactly what people are doing, what they need, and what's holding them up, and being able to take 300 calls at ... Well, not 300, but at least one very early phone call every morning, because contractors are early risers, and if you are not, you will be one. I mean, we were always just like, we feel like such lazy people sleeping at 6:00 AM. How dare we?

Kristina: True. They have to wake up, and especially, if they're working in heat, which is, in Texas, most of the year you are, so waking up early is important. I'm sure that's one of the reasons. I'm sure there's many others, but-

Michu: So, that is part of it, right? Like bringing all your expertise. Like doing your research, figuring out how permitting works. And there are things that you don't think need permits that definitely need permits. And there are things that seem like they would need permits but that absolutely do not.

Kristina: Yeah, actually, that's so true. And I think that's very unique to Austin. I'm from Atlanta. And I remember telling my dad all these permit situations that I was going through when I bought my house, and he was like, "What? You need a permit to knock down this little thing in your house? That's your house." And I was like, "I mean, I don't know." Which is funny because we're in Texas, you would think like ... But I think right outside of Travis County, it's much more lenient. The city of Austin just has very strict permitting laws. And I mean, no one really knows what the right answer is as you probably found out. You have to talk to 10 different people at the permitting office, and they all will tell you something like slightly different.

Michu: Right. But the key is getting to the person who doesn't know, but has the power to do something.

Kristina: Yes. That's so true.

Michu: Who's like, "All right, I'm now going to sign off. And this is correct."

Kristina: Like, "Thank you."

Michu: You're like, "Thanks, man. I've been at this forever." So, permitting is helpful. And also just the permitting is not all bad because even though it is tedious, and time-consuming ... When we were installing AC unit there ... Again, like many people, we don't know exactly how everything works, or how things are built. And so, having the inspector come in, and find issues with it might've saved us a small fire who knows?

Kristina: That's true.

Michu: So, the fact that there was an inspector in the end, I think guaranteed that a lot of the work was done properly. And when it was done shoddily that it got called out. So, it is a terrible burden, but sometimes when you're doing big things, it is helpful to have someone with the authority to make it work. Right? With the leverage to say, no, this isn't done. And-

Kristina: Yeah. I think that's a really good point. And I also think it's probably really rewarding the confidence you get after doing something like this, like, "Oh, I know what to do. I know how to talk to people at the city." Maybe that's a skill you might not use again for a while, but it's the confidence that comes with it that is ... Even just talking to contractors, knowing how to schedule things out. I think there's a lot of confidence that comes with all this. Do you feel that way?

Michu: I feel exactly 100%. I was nodding along the whole time because it does feel so incredibly overwhelming you're just saying things and doing things you understand nothing about, but really just the immersion of it, and coming out the other side makes you feel like you can survive better in the world. Like you know how to do things that are of a size.

Kristina: Michu, this has been amazing. Thank you. Is there anything else before we sign off that you'd want to say to everyone about home ownership or renovating?

Michu: Well, what you were saying I think is very helpful that you know more than you think you know, and what you don't know, you'll learn very quickly because under pressure it's amazing what you can retain. It really is. But also, just working with y'all was extremely valuable, first, because of your patience. And second, because there are a lot of questions that aren't just like on the internet. Well, maybe they're in your book. But there are a lot of questions that come up. And maybe, finally, the saving for a long time it is worth it because you don't need to put in a 12% down payment. We were always calculating for 20, and having 20 but spending 12 was what allowed us to do the remodel.

Kristina: Yeah. That's a good point.

Michu: Well, I think we had a little over 20. And we were like, "Oh no, this is going to be great. We won't have to pay like mortgage insurance." But being ready for the eventuality was what allowed us to get a fixer upper in the first place.

Kristina: That's such a good point. And thank you. And you were wonderful to work with, honestly. But yeah, again, thank you so much. This was wonderful. Oh, maybe I'll connect a link or something to some photos of your before and after if you have any, if you want to share [crosstalk 01:00:32]-

Michu: Totally. I can definitely share some of those, and just to be a business owner forever for branding, and design we are inhouse.com. And we share our surname with the business that's interviewing us now. From one house to the other. Alan, take that out please. That is terrible.

Kristina: Alan. No, he's going to use that as a little-

Michu: He's absolutely going to use that, and I'm going to die being the person who made that joke. [crosstalk 01:01:07].

Kristina: I love that joke.

Michu: I have regrets. Mistakes were made.

Steph: Wow. That was so good. I feel like every single person that goes through renovation should be interviewed about it. So much good stuff.

Kristina: Yeah. Especially, like it's first-time home buyers, they had never done this before.

Steph: Right. She had incredible insight not into just the process, but I love that she talked so much about how many skills are transferable. I mean, she has her own company, obviously, but everybody has skills that can be transferred to a renovation. And you feel like you have no idea what you're doing, but there are so many skills that you can use while you're renovating a house that it just seems way more possible after listening to her.

Kristina: Oh yeah. For sure. You can take skills from any job. I think when I first renovated my house, the skills that I was bringing was skills from being a wedding planner, of just coordinating things. I don't know, get certain deadlines hit. It was just-

Steph: Yes, when you first hear that like, oh, you were a wedding planner, and a caterer, that has nothing to do with renovation but when you think about it deeper, you're project managing, you're negotiating contracts, you're making sure things get done on time. And that's all it is in a renovation. When people think of a renovation, I think a lot of times they're like, "Oh, well, I'm not handy." But it's very rare for people to do handyman work in their own renovation.

Kristina: That's very true. And what's even crazy, so, after Michu and I stopped our formal interview, I paused it. And then she was like, "Oh yeah, I forgot to tell you that actually not long after we renovated our home, we had it reappraised through our bank, and had the PMI taken off." So, the 20% that they saved for a house, originally, was used as a down payment, and savings. And they still didn't have to pay PMI. Although, they saved 20%, they only put 12% down, used the rest for the renovation. And then right after had their bank reappraise their home. And they were able to get rid of the PMI because of how much value was now in the house.

Steph: It's so great because people are terrified of PMI. And thinking about they've been in their house for one year, and their renovation took nine weeks. Could you believe that?

Kristina: I was like, "Oh my gosh, this ... " It gave me so much confidence for ... I mean, I know we've both renovated homes before, but to do an entire project in two months, essentially.

Steph: Yeah. And I've had this fear that my renovations have been a fluke. And so, preaching that you can do it too. And I've known that you can, and I've known that everyone can, if I can do it, anyone can do it. But I was just like, "Oh my gosh, I hope that other people can get prices that I've gotten, and stuff like that." And just hearing her having spent only $67,000, which you mentioned this sounds ... It is a lot of money, obviously, but for a whole house renovation, it is so affordable. And they have so much equity in their house after a very short amount of time, and not that much money in the grand scheme of things.

Kristina: Yeah. And they had originally saved all of that money to put into the down payment of a house. That's it. And to know that they did all that, and they didn't have to pay PMI. Which PMI, again, it's not the end of the world if you have to pay it. Mine's $85 a month. I know you said yours was like, what? 130 or something.

Steph: Yeah. Mine was more, but not currently paying any PMI because I've done the same thing to get it off. And again, PMI stands for Private Mortgage Insurance, and that's what you pay if you put less than 20% down, which it deters a lot of people, and makes people think they have to save 20% when it's just not true. So, I love Michu's story, and I love that she has such confidence now. And you guys talked about like her dynamic with her partner, and how it's similar to ours, in that she was the more cautious.

Steph: And I saw that in even her showings, she was like, "Oh." She wanted to know all the details. I mean, she is the definition of grace to me. She is so graceful in the way she speaks, and the way she handles herself. And you can tell how intelligent she is. And her questions were always really poignant. And she just wanted the whole picture. And I think that is a perfect balance with Lope who was like, "Let's get it." It's nice to have that. And you can have that in one person too. So, you definitely don't have to have a partner to do a renovation, but having the dual-

Kristina: It's a good balance. Especially, if you partner with someone who has complementary ... What am I trying to say? Skills.

Steph: Yeah. Complementary disposition too. Like you and I.

Kristina: For sure. Yeah, exactly. And they worked so well together. I mean, I think that's so important too, is when you are buying a project with a significant other, or with a partner, you really need to have a lot of conversations. You need to know how to communicate very well. And you almost have to divide, and conquer the tasks, like, who is going to be looking into the details of this project? And who is going to be finding the contractors? I think they worked so well together.

Steph: I agree. I love that she said they offered incentives for the contractors to finish early, and that she paid them for the results, not the time spent, which is so perfect. That is what you want to pay for. Even if it can take someone, half the time, but they do it way better, that person deserves the same amount of pay as someone who takes a lot longer. And you're not paying the carrying costs for as long. It was really cool to hear that. I've never offered financial compensation for a quicker job. And I will do that next time.

Kristina: Yeah. And some of the listeners may be thinking, "Well, she had you all to guide her on this." But honestly, I don't remember them asking us that many questions. They had us as a resource, but she might've asked me for an electrician. Honestly, they figured this out by themselves. This was on them. They did.

Steph: Yeah. I love also when she said knowing how to Google obscure things is a real skill. And that is a picture of resourcefulness. And resourcefulness is, in my opinion, one of the top indicators of success in anything, and especially, in renovation.

Kristina: Oh my gosh, it's so true. And I know we get a lot of questions from people where ... And I'm sure this happens to everyone. In every industry, if they have some platform online, people will reach out where you're like, "I want to help people, but also, this is like a question where you could Google it." It's not my opinion on something, it's the literal definition is what you're seeking. And so-

Steph: My main example of that is one time this unnamed person, it was a client, texted me, and asked me how many square feet were in an acre. And I was like, "No." Literally, the first thing that comes up when you put square feet and acre is it tells you the [inaudible 01:09:16], like, no.

Kristina: Oh my gosh.

Steph: And at the end she even says that she loved working with us. And she attributes part of her success to that. And I love that. But she also did so much on her own. It is a partnership. We're not just depositing knowledge into your brain. We're working with you to facilitate your learning on this topic, and the experience, and the renovation, which, ultimately, you'll be more confident, and more knowledgeable in the end.

Kristina: Ah, so well said. Very true. What's that quote? We're teaching you to fish, we're not just giving you the fish or something like that.

Steph: Yeah. What is it? Teach a woman to fish ... Yeah. [crosstalk 01:10:07]. You guys get it.

Kristina: We'll become more eloquent speakers one day.

Steph: Yeah, we need voice coaches or speech lessons. Okay. So, thank you guys for listening. I'm so happy that you got to listen to this interview. We're going to do more like these. We'll come to you next week with another episode with just me and Kristina. And yeah, anything else?

Kristina: Nope. I think that's it.

Steph: Yay.

Kristina: Thank you all for listening. Again, if you have any questions, any ideas for this podcast, please reach out to us at podcasta@openhouseaustin.co. And you can find us on Instagram. We post a lot of first-time home buyer, and investor tips and resources. So [crosstalk 01:10:59]-

Steph: Yes. And follow us on Instagram, Openhouse_Austin. Also, please, if you liked this podcast, give us a review. It really helps in our searchability, and give us a little rating. And we would love to hear any feedback, obviously, on our email, but also you can DM us on Instagram. So, we'll see you next week. Bye.