Meet Lisa: The Working Mom Who Flips Houses to Pay Off Debt

LisaTotal Debt Paid Off: $9,154
Accounts paid off: 2
Months using ReadyForZero: 3

“The debt payoff is the biggest thing. That’s going to take many years. The second thing is to start saving for retirement. When you’re young, you just don’t realize how quick life goes; and before you know it you’ve got retirement only 20 years away. So that is another priority to not only pay on the debt, but also get some retirement money in the bank.”

When I was in college, I had a pretty hectic schedule. Working two jobs and an internship while taking a full load of classes left me feeling like a barely functional human being. I was about as stressed as someone could be. One day I was studying for an exam when my classmate said she hoped our next class would get out early so she could get home to her sick son.

“You have a kid?!” I asked. 

She laughed and said yes, that she had a one year old at home and that she took night classes so her husband could watch him while she was at school. I couldn’t even wrap my head around what her schedule must be like. I could barely take care of myself at the time – how on earth was she managing to maintain an equally busy class load and take care of a child?

To say I was impressed would be quite the understatement. Since that day, I’ve had a newfound appreciation for working moms and moms going to school – which is why I’m so excited to share this success profile with you today.

Meet Lisa: The Working Mom Who Flips Houses to Pay Off Debt

I can’t remember the first time I “met” Lisa. It may have been on Twitter or in the support inbox or perhaps our Facebook community. The reason it all melds together in my mind is because ever since I met her, Lisa has been a force of motivation and support for the ReadyForZero community in so many ways.

When you read her story, you’ll understand why!

As a child, Lisa was taken away from her family when she and her eight siblings went through the process of adoption, which resulted in each living with a different family. These rough beginnings instilled in Lisa a strong sense of motivation to overcome her past and create a better future for herself. So when she eventually married and had 3 daughters of her own, she was determined to pursue an education and urge them to do the same.

Getting married and starting a family at the young age of 20 made this process difficult though, as she had to work full time to help support her family once they were out of kindergarten. That meant working, taking classes, and raising children…all at the same time. Any one of those things can easily be considered a full-time endeavor! But she pursued them all to be a positive example for her daughters:

“I kept thinking, well, if I go back to school and get my master’s degree, that would be something that’s an accomplishment. That would mean I’m the first person in my family to ever get that designation.”

And that’s certainly an accomplishment to be proud of! The only problem was, taking on such a hectic lifestyle made tracking the financial side of things a challenge – especially since she had to take loans out from multiple student lenders to make it work. When she finally tallied her total debt – after 12 years of working, raising a family, and taking part-time classes – Lisa was in for the shock of her life:

“When I graduated, I figured I was about $80,000 in debt…then I learned that I was $150,000 in debt and a lot of that was accumulated interest.” 

Talk about a terrifying realization. As someone who had my own awakening with student loan debt (seeing the difference between the balance and the amount that will actually be paid over time, thanks to interest), I can identify with the shock and anger that must have followed.

This is the part where some people would say, “Why would anyone pay so much to go to school?” While I understand where that sentiment comes from, I also came from a generation that was told that a college education is the ticket to a good career. With a degree, you’ll go places. Without it, you’ll be stuck forever. That was the mantra. And it sounds like Lisa heard the same thing:

“So, over the years, I just accumulated all this student loan debt, and the basic reason was, it was my own fault. I didn’t watch how much I had accumulated because, when I got these loans, they came from different banks and different sources and I just didn’t keep track of it all and hadn’t considered the accumulating interest over all those years.

You know, I kept thinking, ‘Oh, you know, when I graduate I’m going to have this great job so the payments won’t be a problem’ and I will have made something of myself.

But really what it came out was that I put myself deep in debt to prove I was something when that degree really didn’t prove that I was really anything. It was me that is something, not the degree. So $150,000 later, I came to the realization that, you know, oops, I screwed up big time!”

Lisa’s thoughts reflect what so many of us believed – that future earnings would mitigate the cost of college. That this was an investment we could all trust. A rude awakening for many after The Great Recession.

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Creating New Opportunities to Defeat Debt

Lisa didn’t sit still for long. While her daughters also had student loan debt, she knew time was on their side to pay it off and save for their futures. But she needed to handle the debt immediately, lest she be paying it off well into retirement.

She took a couple financial courses and decided on a course of action.  She also began taking  her 15 year old stepson to financial classes so he didn’t make the same mistakes and had a good education and foundation for financial decisions that is so lacking for teens in our society.

She then harnessed the motivation that enabled her to work, go to school, and raise a family to then work as many side jobs as she could. And then she and her husband were given a small inheritance that led them to a new endeavor:

“We started flipping houses in 2007. My husband’s mother passed away and she left the family some money. Not a lot, but enough. We really wanted to take that money and make money with it. We didn’t want to blow it. That’s why we bought our first tax foreclosure house; and that’s how we got started in the flipping business.”

Cut to a few years later and Lisa and her husband have now flipped ten houses! But even with that boost in their income, it wasn’t enough:

“I realized I would be 72 years old when I paid off my student loans. That is the most terrifying thought… So we needed to do something drastic. We needed to get rid of a huge chunk of debt. Between all the credit cards that we had and the student loans, cars, and the mortgage, we were about $350,000 in debt.”

The next move Lisa and her husband made was definitely drastic. After selling as many of their belongings as they could (motorcycle, boat, furniture, etc.), they decided to take the biggest step they could think of: getting rid of their mortgage.

Drastic Measures & Swimming Upstream Against Societal Currents

By now Lisa and her husband had plenty of experience flipping houses. But their next flip wouldn’t be targeted towards earning money – it would be about eliminating debt and creating more stability. How? By selling their own house and buying a flip in cash. This would cut down on their total debt, give them one less bill to pay each month (which could then be applied to student loan debt), and provide more stability through smaller monthly expenditures. Talk about a win/win/win!

“Instead of buying our next flip project, we took that money and bought a house with cash in November of 2013 for $33,000. It was right in the middle of a bunch of $80,000, $90,000 houses. It happened to be a foreclosure. It had good bones, so we came in and rehabbed it. And now we’re selling our $135,000 house with a $1,000 a month mortgage.

We did this because it will eliminate about $125,000 of debt right off the top and give us another $1,000 a month to start chunking on debt.”

Before - After

A labor of dedication with a big payoff: updating appliances and adding nice finishes – topped off with decorative details!

As much as this helped Lisa and her husband improve their situation, it wasn’t an easy process – especially when they explained their plan to their family and friends.  It is expected upon graduation that your lifestyle improves, not the other way around!

“It’s a scary move. It’s not easy to do; and I always swore I’d never move again after the last time. Our family was looking at us like, ‘What in the world are you doing?’ They’re like, ‘Why? Are you going bankrupt? Are you losing the house?’ No, we’re not losing the house. We’re making the choice to change our lifestyle and that’s what it came down to.  It’s something we did and I actually love my new house.

That amount of debt scared me. I wanted to have a home that, no matter what, I would always have a roof over my head because that amount of debt scared me to death. I thought, what if I get laid off? You know, will we lose our home? Will we be on the streets? If nothing else, I need to make sure we always had a roof over our heads.”

Now that Lisa and her husband are moved in, they’re not stopping their extra efforts to continue paying off the debt. Lisa uses websites like Elance to find ways to earn extra money, but she’s also learned a lot about the value of her very limited free time:

“I started working a lot of jobs in Elance and just basically trying to do anything I could to make an extra buck. Well, I quickly realized that a lot of things aren’t worth it.

Life goes by so fast. I mean I was doing anything from mystery shopping to completing surveys. I’m like, why am I doing this? Why am I spending an hour of my time to make $10 when I have a Master’s Degree? 

I was reacting out of desperation. ‘Oh, my gosh, I’m horribly in debt.’ I’d do anything I can, but you get to the point where you only have so much energy in a day; and how you spend that energy, how you spend that time needs to be maximized to its maximum potential. And I was not doing that. Now I am.”

So the real question is… how does Lisa stay so motivated and maximize her time? I’m happy to say that, aside from her incredible drive, ReadyForZero has been able to help.

“One time I paid off one of my credit cards and I got this happy little email. I even posted it on the group because I was like, oh, this is really cool that it makes you feel good. This is actually a pat on the back from a system that says, ‘Hey, you’re doing a great job. You’re really on it.’  So, yeah, it is very motivating. It is very motivating and it makes you think about the next one, getting that email again.  You know, I want to get that email again.

Another aspect of RFZ that I love is that it shows you how much interest your debt is costing you every day.  I’ve never seen than number before and I am watching it go down, it’s my little victory!

Bright Future on the Horizon

Lisa and her husband still have a ways to go on fully eliminating their debt; but they’re not taking their eyes off the prize.

“The debt payoff is the biggest thing. That’s going to take many years. The second thing is to start saving for retirement. When you’re young, you just don’t realize how quick life goes; and before you know it you’ve got retirement only 20 years away. So that is another priority to not only pay on the debt, but also get some retirement money in the bank. Number three is actually getting to slow down and enjoy the rest of my life.”

With the amount of drive and hard work Lisa has exhibited, we don’t have any doubt that she can achieve her goals and then some. And if you ever see her in our community, give her a little hello. She’s one of our community’s most vocal cheerleaders and I know she’d love to hear from you!

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  • Lisa Kovac

    Thanks for publishing my story Shannon, I’m hoping to do a follow up progress report a year from now with good progress to show!
    🙂

    • Shannon_ReadyForZero

      Thank you for sharing your story, Lisa! Looking forward to hearing updates :). Keep up the awesome work!!

  • john sneed

    do you need a loan?? contact mr_irvincostaloans@outlook.com