During the first walkthrough of their new home, Eddie and Katie Burkhalter looked around at piles of garbage, drug paraphernalia and graffiti-scrawled walls noting the previous tenants’ drug of choice.
Calling the house, which the Burkhalters bought with $8,000 cash, a fixer-upper would be an understatement. But with some work and a lot of saving, they turned it into a home for their family. Now they are free from the burden of monthly mortgage or rent payments.
“Obviously, we knew what we were getting into. The real estate agents had never been inside the house. It was uninhabitable,” Katie Burkhalter said.
Buying a home with cash and having a mortgage and rent-free lifestyle may seem unattainable for many millennials, who already are buying homes much later in life compared to their parents. The Burkhalters believed that with a lot of work and willingness to rough it for a few months, they could achieve homeowner status and escape the vicious paycheck to paycheck cycle.
The Burkhalters live in the small east Alabama town of Piedmont, located on the Alabama-Georgia line about 70 miles from Atlanta.
The town of around 5,000 people is home to Alabama’s second tallest peak, Duggar Mountain, and is a popular destination for bikers, hikers and fishermen.
The couple and their children live on less than $35,000 per year with Eddie, 46, working as a journalist and Katie, 37, as a social worker. They wanted a home of their own, but didn’t want to continue living paycheck to paycheck just to pay the mortgage.
“When we started talking about just paying cash for a house, our discussion was always ‘How can we not be poor anymore?’” Katie said.
In 2012, the Burkhalters decided to start saving for a down payment, saving around $4,000 by 2014 when they found their future home. Before then, they had only rented.
The house was one of group of homes a landlord in town was selling for a few thousand dollars. The Burkhalters chose one with a price tag of $8,000.
Knowing they needed an additional $4,000 to make the purchase, Katie picked up extra shifts at work and they saved more money by eating low-cost meals at home.
Charles Schwab’s 2019 Modern Wealth Survey found 62 percent of millennials say they’re living paycheck-to-paycheck. Of every generation surveyed, millennials were the most insecure about their finances.
The Burkhalters said they both watched their parents struggle with their finances. Eddie described his family as “house poor,” meaning his parents owned a home, but a lot of their income was tied up in mortgage payments and utilities.
The couple picked up odd jobs or extra shifts at work to make extra money for the cash purchase.
In addition to the garbage and drug paraphernalia, some of the plumbing and gas lines were deteriorated, the floors rotted.
“It wasn’t easy. I don’t want to sugarcoat anything or make it something that it wasn’t because it was really, really difficult,” Katie said.
The Burkhalter family continued renting their current residence for nine more months before moving into one room of the house, and kept working room by room until the home was restored. Since 2014, they’ve spent around $25,000 on the restoration of the home.
Eddie’s father, Emory Burkhatler, who worked as a carpenter doing remodeling work until the late 80s, helped him with some of the restoration work. To save money, Eddie used some of his father’s tools instead of buying more.
He also watched YouTube videos to learn how to do some other work on the home.
“A construction loan would have been the easiest route, but it would have defeated the purpose (of using cash to buy the house). We wanted to keep out of debt as much as possible. It was not for the faint of heart,” he said.
They repurposed as much material in the home as possible in order to avoid spending additional money on new materials. Friends nearby heard about the project and donated extra materials from their own projects.
Now, they live there with their two children and two nephews. Eddie is currently working to finish the attic, where there will be an additional bedroom and an office.
Last year, the couple paid $15,000 in cash for the house next door and is restoring it as well. They plan to turn it into an Airbnb. When it’s not being rented, family members can stay there during visits, they said.
But the $8,000 house is more than a place to live and raise their family. It represents freedom for the Burkhalters.
“I see people now struggling because of the pandemic, and how we very easily could have been in a shelter when this pandemic hit if we didn’t have this house paid for. I’ve worked with homeless people, so I know how little it takes. A flat tire can send a single mom into homelessness,” Katie Burkhatler said.
For people who are looking to get out of the paycheck-to-paycheck cycle, Eddie suggested anyone willing to take on a challenge should also buy a fixer–upper.
“You’re trying to get the worst looking place in the best area,” he said.
“I know that whatever happens, even if I were to lose my job, we’d be okay. We’d make ends meet. There’s that comfort in that — and especially during this pandemic, when it was really uncertain,” Eddie said.