Today I transferred all my Roth from last year and my contribution so far this year back into taxable investment accounts. The reason I did this was because I exceeded the income requirements.
I am working with my accountant on this years taxes and as income was way up.. all around my refund will be less ... he is working on it now. Whatever the result is this year I will talk to him and another attorney/CPA I know to see if there are ways to limit taxes in the future by various creative or currently unknowns. I expect to be having high income for a few more years nwo and I know there are a ways to use LLC (which I have) and other things to cut down taxes. Makes sense to see if those apply. Driveways, siding and roofing is all in the works. so all large things this year will be done by end of next week . I figure a few months to build back up the emergency fund and then settle in again..
I am completing the fence at my house $800 . last year you recall I did a 6 foot fence but 'cut in' at my neighbors 'outbuilding' (it ws an old stable). I just have really negative feelings about my neighbor.. there dogs are out much less (knock on wood) but I just do not like the people.. I figure with the fence I can enjoy the yard again
I still think of just selling and moving to the real downtown area out here where they have older homes and least the last time I lived there everyone was out and about. friendly. you could walk to downtown all of that..the river walk.. I can probably spend less too.. get a front porch to watch the rain etc..hardwood floors.. little nook and crannies..
Anyway. not moving right now and I have a nice house. I looked at the photos from Patient Saver and loved the look of the cozy, landscape, stone (not just the driveway but near the driveway) feel. I like that type of house...
I can understand Patient Savers ancy-ness. I am doing my own little countdown too and working way too hard and feeling like with this house debt I am not going to be whre i want.
Things change all the time.. so onward and counting the multiple blessings I do have.
Thinking on the SUV.. still looking at options but really my contract does only go until July so might be best to at least wait to do anything until then. but I DO want to downsize to one vehicle.. does not make sense anymore to have two and not worth it to me..
Archive for March, 2016
You recall I got a 2008 Suburban LTZ a few months ago part for the not for profit, part for me. I paid some of it and pay ongoing costs. I bought this out of state from a reputable dealer.. got a good deal etc etc. Love it. drives great. clean car fax... Anyway I did not ask if it had rust.. probably should have. I did not notice any rust however when it first came in but recently noticed rust. (maybe it just grows that fast.. see below for why I think that) Anyway, I figured I would just 'have it fixed'. Turns out it rusts from the inside out and 3 guys (one a trusted local friend of a friend) say that the it is not worth while to fix rust and some of the areas it is are not readily fixable and they will not guarantee any work and it may last from a month to 2 years. never know.. they say the rust will starting eating holes as soon as NEXT WINTER.. Maybe there WAS no super visible rust when I got it and it grew that fast. Two people suggested I clean it up (looks new except for this rust.. guys were surprised it was a 2008) and sell now vs waiting for the rust to eat all the way through. Thsi assumes I do not want to drive it til it dies (I did but not with rust holes). They also said this this type of car is more prone to rust etc etc but that the design of the panels etc has improved and maybe whoever had it did not wash it after driving thru salt etc. they also said where two rust areas are make them think the bumper was replaced or damaged at one time.. they suggest I buy a newer version OR if I get a 2008 to buy from down South or West.
ANYWAY. this is horrifying shocking news.
I stil have my 2011 Genesis which I love and I have this truck. I DO want a truck. DO I need a car? not sure but I love my car. Looking online it appears the only suburban I can get for the money I have in this current one is a similar one with over 100k miles and simmilar year.. actually all the ones avail seem to be MORE than what I paid .
I am weighing the following
1. buy a newer Suburban 2013-2014 with approx 55-65k miles for approx $30-35k AND SELL THE CAR to help pay for it
2. sell ths suburban and buy a similar one and try to search for one in a 'no salt area.. or downsizing to a tahoe. which is almost the same price
2008 Suburbans are going for approx $20k
I paid for rain guards, mud flaps and weather tech floor mats for the Suburban...and a conversion unit for ONSTAR to BLUETOoTh module that will fit the 2013-2014 suburban but is unclear if it will fit the tahoe. the back mat for sure will not..
I do not drive as much with work and do not anticipate leaving where I work in the near term (I think if my contract ends I can just go full time and in 2-3 years I want to explore other options)
If I only have a car I WILL LIKELY feel I need to get an suv for the not for profit and snow
Thoughts? things I need to think on or do?
My plan is to talk to a one more person on the rust, and research what my car is worth and what the suburban might sell for and figure out exactly how much money was paid for the suburban again
Continuing to feel great with my property manager. Already calling and clarifying the 2 people whose leases are up 4/31.. looks good at least 1 will stay (yay fingers crossed). I am really thinking I will have much less turnover this year and lower costs
Visited the homes we are doing the siding, roof, driveways on and met the tenants . very nice people and were excited for the improvements..
Just feeling good
So goal this year is $60k net and then next year will look to improve on whereever I end up
I am having to pay some $20k in improvements (or wanting to) so for me to hit $60k net I have to actually make $80k net. so we shall see. That is an average of $6666 a month NET.. seems a PRETTY AGGRESSIVE GOAL right now but we will see..better to shoot for the stars and hit the moon
Key is keep those repair costs down and units filled
Thrilled with it looking like things are turning around
ALSO now that I control all large repairs and get CALLED on every minor repair over $100.. I have better control and am forming sortof a team of different trades people I trust and have reasonable rates.
Got to get this primary house paid down or something by 6/2018
I took in a 15 year loan but that makes the payments high which I will not want if I scale back. My mortgage if I do not pay extra is $2750 a month.
Dad still doing 'well' and seems stabilized. VERY glad I moved him to Silverado..
the 2 flat is a GO!! trying to close end of the month. seller contract.. almost 14.5% cap rate.. my goal will be to pay off by 9/2018
Just reading through my rental net sheets from years past. My goal is to smooth out the homes this year and next and realistically complete any lingering 'large repair/upgrade items' this year and then go to maintenance mode
The homes had a lot deferred maintenance items when they were bought. some large (roofs whatever). I got them at super reduced price but realizing I maybe could have gotten them lower (with wht I know now or have learned) .. maybe not. in either case.. I GOT the homes which is a big step in and of itself
Realize that currently all net goes to the mortgages(I am paying these off on a SUPER accelerated rate). 6 homes already paid off, 3 units will be paid off 3/2018
So, my NET if I did not have a mortgage was
2014- $20945 (w repairs/vacancy charges of $50884)
2015- $34288 (w repair/ vacancy charges of $37674)
I am going to set a goal to hit $60k NET (before mortgage for this year). Looking at spreadsheets my major factors that I can control are VACANCY and REPAIRS. I wil track those closely and can more easily do so with the new manager
I am forecasting approx $20k of large repair costs outside of normal wear and tear. which includes roof, siding, driveways. I am starting that this week. I have no other large repairs forecasted and day to day repairs are runnning WAY LESS than last year. I still want to reduce my large repair costs year to year and am coming to the end of the list. realistially this siding/roof I do not HAVE to do but thimk it makes sense long term
A learning year and probably a wild ride but got to get this smoothed out so I can depend on it more. It has been a wild 2.5 years so far.
net rents update
Highest month so far
First 2 months this year (with 2 vacancies) was running at $5100 average (NET) before paying mortgage
This month (all units full) I am at $7387 NEt (before mortgage)
I will continue to track this but hoping for a continued upward trend from last year and with better management I should have it
My management fee is lower w this new company 7% down to 5% of rents and repairs costs are MUCH LOWER (and less frequent) and I have increased collection of rents and late fees .. so so far so good. I am hoping the BIG turn around will be in finding better tenants who stay longer. This management company has placed 3 people so far for me (and all seem good but time will tell). One was a replacement tenant (turning over a unit with 6 days downtime!!) and 2 were just to fill vacancies.. one from an eviction. one with a new property.
Last year I had extreme vacancy and legal costs and lower rents because of it.
23 months to go to pay off these 2 3 units.. so I will use what I have learned and work w this management company to continue this upward trend so reach my goals
I think I will reach my net rents goal but still stuck somewhat with owing this $300k on my primary house I do not like owing that much and am wanting to find ways to get that paid down or owe less. BY 6/2018 at current trend. I will still owe like $260k which will make me feel uneasy to leave my higher dollar job or relax. I want that paid down considering (to less than 100k) and maybe then refinnance to a lower payment?
A lot can happen in 2 years though so onword!
Where do all these net rents go right now? My mortgage payment is $5094 for the 3 units and the rest I either pull out to add to savings or will start using to take care of these large improvements I want to do this year.. so I am not pulling from the homes yet
I got my 401k match from last year. approx $3650.. nice!
I am trying to get my entire 401k in this year by July in case my contract ends (but do not think it will). it also forces me to live on much less which is good and I will continue at once I am complete w the 401k deductions (approx July)
I am looking at a 2 flat, contract sale
occupied , price $72,500, total rent $1750 ($900 and $850)
With all expenses (water bill, tax, maintenance escrow, insurance and mgmt) the cap rate is over 14%. Seller will sell with $25k down and finance the rest over 4 years,. payments $1018
I did an inspection (cost $450) and seller is fixing a big list of items I asked for . I should say this is a seller referred by the property manager and she is wanting to sell all her properties and move to a different area. First floor unit just prepped for new tenant too.
So i will re-inspect property Friday (my list of items) and see if it makes sense then.
Inspections are SO WORTH it. even if listing is 'as is'. I wish I had done then on the '6 homes' but live and learn.
All units filled (been a long time saying that) but finally there and all rents IN and so much smoothing out. I am tracking net now each month and so exciting to see the changes year to year. Now hopefully things will just smooth out and I will jhave normal renewals and move outs not this drama and having to evict people etc.. and lost rent..hoping this year is my best year ever actually and I think it will be. Section 8 lady moved in yesterday and hoping she stays long (and works out). I will do those driveways and siding likely in April. .. got quotes and contractors lined up
Work is still going well.. my contract is up 7/7/16 but the project is going to way exceed that timeline so unless there are any slip ups I should be renewed
I should get my 3% match to my 401k (from last year) next month.. interested to see what it is
About it. Dad is still doing well in memory care.. cost approx $7150 a month. he is doing well but the decline is quick. he is now hardly able to get up from a chair on his own and talks less and less.. but a VERY good place.. less drama and homey. very nice.
About it for right now
getting warmer which is great
Good news updates. I got the house approved (need to a few minor fixes) from Section 8 but guess what. The inspector called the manager personally on his cell and told him he only let the house back in the program because of HIM and then the manager told me that he regularly hosts a golf outing for section 8, contributes to this guys sister's campaign etc and considers it the cost of doing business.. Wow. did not know that but another reason I am happy I switched to this guy
So lease signing should be this week and them move in this weekend
Rent is going up $20 a month
New manager is also submitting my victorian for a rent increase. lady is on a smaller voucher than the size of the house so rent is real low ($1025)
when I tried for a rent increase myself and through the old manager I was turned down last year. hopefully this will work. if so it will further justify my keeping that house and switching the property manager
Did all my tax stuff and sent to the accountant. Hoping to have a rough estimate of refund this week
He is doing the not for profit and Dad's taxes too this year
My not for profit grossed $76k last year . our largest year yet
Looking at costs from last year and doing taxes really helped me see the difference year to year and easy ways to keep track of things. taxes will be easy next year w this new property managers reports
HOMES really smoothing out and will be a big income source for me
Doing siding of a house and 3 car garage this year along with a roof and 3 new driveways. These items will be my big money spend this year but I think will make the homes look nicer, rent easier and all are long term fixes.
All is good
My plan (5 year plan) is working out!!!