That day in that house with our kids was another turning point for me as a designer and a mom. I came to a brand-new conclusion: “If all I’m doing is creating beautiful spaces, I’m failing. But if I’m creating beautiful spaces where families are thriving, then I’m really doing something.” Doing that became my new calling.
The house really started to become a space where creativity flowed, and that set me down a new path in all of my design work. It’s not just about pretty anymore. It’s about practical. It’s about children feeling that they can be at home. From then on, everything I’d touch from a design standpoint would have that element of balance to it—where it wasn’t just aesthetically pleasing, but it also fit into my (or my client’s) stage of life.
In seemingly no time at all, we had vegetables growing and a couple of chickens laying eggs. The boys loved their room with a windmill in it, and the girls loved their fifty-dollar “princess-style” chandelier from Lowe’s that dangled from their ceiling.
The kids’ living room featured a couple of big chalkboards and a beat-up old farm table where they could get creative to their little hearts’ contents. I put some of those big old letters up on the walls of that room, spelling out “PLAY” on one wall and using everyone’s first initial in an appropriate spot. Then I redid the kitchen with a clean black countertop and white subway tiles.
I filled that home with the beautiful sorts of things I loved, from an old wooden bench to bulky antique black candle sconces and some old gates on the walls and a cool-looking old antique scale that didn’t serve any purpose other than to look old and cool.
I swear, the moment we moved into that house designed around us, I saw my family come alive in ways I’d never quite felt before. The kids were happy, and that made mama happy. Chip seemed all sorts of content to go out and feed his chickens in the morning. And I sometimes found it hard to believe that we’d had such a breakthrough as a family—and I’d had such a breakthrough as a designer and mom—in what was once an ugly, shotgun flip home.
It turned out that Chip’s reasons for moving into that home were good ones. Change was good. It was inspirational. But that’s not what I’m talking about. It’s the other reasons he had—the notion that maybe the economy was slowing down a bit and maybe we ought to reduce our financial footprint—that proved to be a godsend. Because just as we started enjoying our new life in that Carriage Square home, our biggest investment ever took an unexpected turn that would rip the rug right out from under our feet.
TWELVE
GETTING TO THE BOTTOM
I picked up the phone and within two words I realized this was the type of call no businessman wants to receive.
It was my banker.
“Hi, Chip,” he said. Even those first two words sounded shaky. “Hey, man, I’ve got some bad news,” he continued. “But I don’t want you to worry. We’ll get through this.”
Could there be a more chilling way to open a conversation? I couldn’t imagine what we were about to “get through,” and I was completely unprepared to hear the news he was about to tell me.
Months before this, Chip and I had basically gone and put all of our eggs into one big basket—and no, I’m not talking about the eggs we were collecting from Chip’s chickens.
Over the past four years, we had gone from being these mom-and-pop remodelers and house flippers doing one, maybe two properties at a time to tackling five, eight, ten properties at a time. The Boys had grown into a big crew, and we had become masters of our trade. The economies of scale had finally tipped in our favor. The fact that we were buying building materials in bulk meant each individual project was a little more profitable than the last.
Right from the start, I’d been rolling the profits from one flip into the next. We wouldn’t even see the money before it was gone, invested in the next one and the next. And every single time I did that, I made money. Anyone I borrowed from, whether it was my dad, a good friend, or an investor, made their money back plus interest every time. It seemed as though we had the Midas touch.
I’d learned so much by that point that I’d decided it was time to do what the big boys do. When my dad and I had sold the eleven acres to that big development firm, the guy I shook hands with wore a $50,000 Rolex. I didn’t covet that watch, but I did envy his success. Now I was sure I, too, could handle that kind of big endeavor.
Doing a few houses at a time spread out all over town meant that a lot of money was being spent on separate crews and trucks and hauling things all over the place. The way to make money was to put a large development together with multiple homes all at once, all in one place.
So that’s what I set my sights on. We basically stopped buying new flip homes and instead poured all of our money into developing this piece of land we’d been sitting on. The plan was to create a neighborhood called Magnolia Villas—thirty-eight comfortable, affordable little first-rate homes all designed by Jo. We’d even gone and opened up a real-estate arm of our company so that all the sales and sales commissions on this whole deal would come our way.
It was a good plan. It really was. But it takes a lot of money to put a plan like that together, and that meant putting all of our eggs into the proverbial basket and taking out a massive line of credit from the bank.
I’m not going to talk about the exact numbers here, but it was a huge line of credit that we’d budgeted every dollar for permits, roads, water and sewer lines, electric hookups, estimated building materials, and contracts with additional crews—all so we could get those houses built quickly and sell them in time to start paying back that line of credit from the profits. We had to do it quickly because, basically, every day that line of credit remained open, it represented a large amount of interest.
I trusted Chip completely with this. His instincts had been right every time we’d jumped into something new. Plus, I was excited about the homes themselves. With this newfound sense of purpose in my mission when it came to design, I drew up plans for the most adorable, functional, livable spaces I’d ever imagined. These were smaller homes, but I had plenty of firsthand experience with that. I knew how to design a small home that I could love, one that would be filled with open spaces and hideaway spaces and the kinds of textures and surfaces and little touches that would make a person feel welcome before he or she even opened the attractive solid-wood front door.
The problem is, there weren’t going to be any doors or anything else. We got the plans all approved. We had the road crews come in to lay out and pave the streets. We had the sidewalks and gutters in place and all the proper drainage we needed in order to start building the actual houses.
And that’s when our banker called with the bad news.
The tidal wave of economic despair that had swept through the rest of the country, that had already crippled housing developers in far-off places like Miami and Las Vegas, had finally reached Waco, Texas. The federal government had come in and told the banks they had no choice but to pull back on any pending loans and lines of credits. And not just pull back a little, but pull back by half.
“We don’t have a choice about this,” my banker told me.
The line of credit we needed to get the project completed had been suddenly cut in half. And if we couldn’t complete the project, we would have no way to repay that loan.
And here’s the thing: We had already received nearly half of that line of credit. We’d already used it to make nonrefundable down payments on everything we needed to get started. We had materials on site. There was no way out.
I’m sitting there going, “Jo, we’re into this thing for a ton of money, and I’ve got most of the invoices sitting on my desk that are due to be paid—some in thirty days, some in forty-five days. What are we gonna do?”