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Updates, buying a 2 flat and the 5 year plan.. almost there

June 23rd, 2017 at 02:34 pm

Hi all

Some updates

I paid my real estate taxes (first payment) and paid off the 2 flat ($22750). This 2 flat payoff was a $5k discount. To do that I had to cut into my rental emergency fund and that is now down to under $3k. SCARY!

I got renewed at work by the way through 12/29. Good news. It is easier to get renewed at year end or year start so I anticipate being renewed again.

I am working some 78-80 hours a week almost every week due to a rocky implementation. Reminder.. I work for a large financial services company that has 'the banks' as its customer. I help lead the largest account for that company. Crazy hours lately. not the norm.. but these hours will subside but for now are good as I need the money to catch up quickly. I chose to work on contract so I can get paid for every hour of work.

I put an offer in on a 2 flat owned by the head of my property management company. He does not have time to fix it up so is selling to me at discount. However the 2 flat next door just sold for $124k in a few days. He was offering it to me at $65k. Hoping he does not back out. It needs $20k of work .. much of that due to paint, drywall and then all new windows throughout (currently stickered for boarded up windows). I will have news today as to if this deal will go through. Hope it does. Deal is $40k down and seller holds a contract for $25k over 3 years at 5%

Numbers below.



My plan is to get the money from a equity line of credit on a rental property. I have initial approval on this loan but need to submit docs. I will do so thsi weekend. Line is 2.9% for 6 months then 5%.. and starts with only a $50 fee. Crazy good deal!

My 5 year goal ends 6/2018

My plan is to buy this 2 flat (fingers crossed), set a reasonable time frame (4-5 years from now) to get it paid off, keep working this high dollar job through 6/2018. saving as much as I can....My large payments end 3/2018 (3 units payoff). After that pay off happens I will divert funds to investments not house payoff. I also plan to increase the rental fund to $25k by the end of the year.

Any ideas from the group

Have not made a decision on school. but need to make a decision on if I enroll in the Fall or not with in 2 weeks. I will NOT quality for aid.. Moody Bible. Masters in Spiritual Formation and Discipleship. For fun and to get a job in a more helping helping training field in social service or with the church

Paying off the 2 flat

May 11th, 2017 at 10:00 pm

today I pulled out $22750 from the rental emergency fund and tax escrow fund to pay off the 2 flat.

payoff is Monday

First 1/2 of taxes are due 5/31

I will be working next week figuring out how to balance things off and pay this borrowed money back and get taxes paid

Still I got a $5k discount on payoff so worth while

this is also my last check with 40% 401k deduction so future checks will be higher

My goal is to repay back the tax escrow and rental emergency fund this year.. and keep on saving as much as I can and meet all the other obligations

If I just put what I would have paid to the monthly 2 flat payments to paying myself back that is already $9770 approx from now through the end of the year... so my realistic shortfall is approx $12980 that I need to put new cash too.

Just cash short right now especially w taxes due.

I will update after I get rents. Rents have been more and more stable which is wonderful

Rachael

real estate updates

May 9th, 2017 at 02:18 pm

Hi all

Real estate updates

2 flat seller and I agreed on a payoff due 5/15 of $22750. This is a $5k discount and means EVERYTHING is paid off by March 2018. I am taking this money from the emergency fund and will pay it back to that. also scraping it up from other sources

The house I put a bid on.. the bid was not accepted and it was sold to someone else. Frown

My last 401k contribution comes out this paycheck on the 15th. after that I should have a big bump in take home pay.. especially with extra hours

My contract is up 6/30 and I am trying to get it renewed. talks are in the works. nothign guaranteed. I expect to have word in 2 weeks. a little nervous but I think I will be renewed.

Rachael

More news! crazy month

May 3rd, 2017 at 01:57 pm

More news

The 2 flat owner is looking to see if I can pay off now at a discount. I currently owe her $26k and am scheduled to pay it off per the contract April 2019 but was going to pay it off early in June 2018 (she does not know that)

Hoping she comes back with a good figure and if so and I can raise the money I will pay her off early and then my total payoff ends 3/2018!! (with only the 3 units left)

It would be exciting to start 'winding up' my 5 year goals.

How much do you think the discount has to be to make sense for me to pay her off early?

No news on my offer yet! Hoping for good news today.

Rachael

May be buying another house

May 1st, 2017 at 02:10 am

HI all

My manager found a potential deal of a house he used to manage for past 5 years. Already rented for $950. Sold for tax deeds. Tax buyer is trying to get $30k just to get rid of it. House is solid may need new roof on back 'overhang' and can update the bath after tenant moves out as needed. Hardwood, 8 year old roof, newer water heater and furnace. 960 square feet. He figures it is worth more like $60-65k. He was just in it last week.

I am putting an offer on it tomorrow am

Below is my sheet where I figured out potential costs and put the price at $40k to accomodate any fix up and if price goes up. The .1671 represents a cap rate of 16.71. $900 represents rent. $567 represents potential net profit per month.




Rachael

Updates, rentals, job, 401k, savings, school, and Dad

April 27th, 2017 at 08:29 pm

Hi all

Quick update. Been busy. Still have not done my tax speadsheet. It WILL be done this weekned and then I should have a refund in a few weeks. I have my taxes done by an accountant

This year he is doing Dad, the last year of the not for profit and ME.

Updates.

JOB
As you recall my work contract is up 6/30. I am already making inquiries at work and pushing to get that extended another 6 months. There IS work but I was transferred under another VP and the work is under the VP I was with before. Things are in the works. I DO feel I will be extended but not certain. I need to be extended or find a job asap to not risk the 5 year plan. I average 60 hour weeks now but it is not as hard as it sounds as I can work at home 3 days a week. Every hour is paid which is great

401k
I will be finished w contributing for the year after the 5/15 paycheck. I had a 80 hour week and put in 50% of that check. I am currently putting in 40% of my salary. After the 401k deduction drops off I will continue to live on this '60% amount and put the rest in savings/investments. I rushed the 401k contribution so I got it all in before my contract was up

HOMES

Homes are plugging along. No big issues. I do have 2 long term homes turning over . one should be ready in a week. The other will vacate the end of May. I think they will rent fast. Others doing well. I DO have city inspections this year on the 2 flat and 3 units which will cost a few thousand each and may put in new windows on the 3 units.I am at $18k for the rental emergency fund (have not paid for windows if I do them). My goal is to have that at $25k by year end

Dad

Still at Silverado. 77 now. We have approx $400k left which is 5 years worth of funds. Dad is doing 'well' but Silverado predicts less than 2 years left. Hard to tell..Dad is not talking to much nowadays and needs help dressing, showering etc.

School

I want to go back to school for a masters. never mentioned this before. I want to go into more of a social services, healing teaching training or church field when I am 'financially free'. I have been looking at a Masters in something Christian related. I have looked at a few schools etc and currently thinking I am leaning towards Moody Bible. Masters in Spiritual Formation and Discipleship. If I get renewed I will start this in the Fall. They have a Timothy scholarship which works that if your church pays 1/3,. Moody kicks in 1/3 and you only have to pay 1/3. They also have limited merit based scholarships. Still working out money and switched churches so have not been that involved yet to ask them to put in 1/3

I am almost at the end of my 5 year plan
I am at risk of falling short on my home payoff and on the $475k total investments but doing all I can do to get there and have slightly over a year left

In terms of the property payoff... I will owe less than $40k across ALL by 1/2018. 3 units payoff will be done 3/2018 and the 2 unit pays off 6/2018

ALMOST THERE!!!

Tiring road but I think I see the end coming

I had a 'post apocolyptic dream' last night and looked up what it meant. apparently it means the end of a something and beginning of somethign new. it is seen as a GOOD sign

Maybe I will pay off these crazy properties, start in a new field, get my masters and meet someone and fall in love!!

thanks everyone for the support

Quick notes-health insurance, savings, rentals

February 23rd, 2017 at 04:06 pm

Hi all

Quick notes

Not sure about others but I am single 46 and in good health and pay $498 a month for health insurance thru the exchange. that comes with a $6000 deductible which this year I have to pay for a knee injury. That is A LOT of money. I am hoping and betting insurance will improve and costs will go down

Many friends are in the same boat or worse

Anyway.. I put $1800 towards my rental emergency fund this month. My goal is to have that built up to $25k. The rentals if no big unforeseen expenses should give me approx $2k extra each month or more which will go the the rental emergency fund for these next few months to get that to $25k and then will go towards accelerating even further the payoff

I also am saving 25% towards the 401k and $1200 outside of that per month from salary etc

Really trying to beef up savings

I am looking at cutting costs and adding whatever I cut to savings

I have 12 months until my 3 unit (over $5000) monthly payment drops off.. so just hanging in there. 3 months after that the 2 flat payment drops off.

Work still going well. and feeling better and 'looser' and mmore positive

I will set aside time today to get the final #s on the rentals from last year but this months Net was better than ever.. so despite the tight situation now I think I am on the right track with this new property manager and with the properties as a whole. Things are artificially tight as I am insisting on the 25% 401k and I 'pay myself first' the $1200+ to savings every month and then 'make do' on the rest..

I will update true rental net from last year after I have final figures. For the past 4 years I have put quite a bit into acquiring and fixing up the rentals to a solid state.. hoping that dramatically drops off and I think it will

Tax time, goals and sharing the 'Homes budget'

February 1st, 2017 at 12:17 am

Hi all

Today is tax day for me. I am figuring out and gathering all my tax documents for me and the rentals

i also need to gather the not for profit tax info

I lost $28k gross income to my bottom line by closing the not for profit

This 5 year journey has been a wild one.my first 2-3 years were very tight. I had a good year last year and now I am Very tight again

I updated my financial goals to the left there for 2017. Those are highlevel goals. I will track monthly and set some mini goals to get to those larger goals

I continue to be off track (per my 5 year goal) towards my personal residence payoff with no clear ideas or plan on the horizon to make that up

I am also short with investments (primarily because I bought more homes) with no clear plan on the horizon to make that up

I want to formulate clear plans to make those gaps up and I really want to put together a plan to make $1000/month more income by March 1

I am putting in 25% my 401k now through the end of June. it makes things pretty tight but my contract only goes through the end of June.

Anyway I am sharing the homes budget for next year. Vacancy, maintenance is estimated based on #s from prior years and then rounded UP. Net assumes homes are paid off. They are not paid off yet. Payoffs start March 2018. . My payments exceed $7500 a month right now. I DO plan to use any extra net from the homes this year to build up the 'rental emergency fund' so not drawing anything from the rentals yet and hoping for no large expenses. I am not planning on any improvements this year

Budget attached. Red means rent is Section 8.

I will be posting more this next few days as I get caught up

Updates, homes, Me, Dad, finances, LIFE

November 11th, 2016 at 01:39 pm

HI all

Still struggling a bit here as I am sure my absence shows.. but even struggling I have been keeping busy which is good and helpful

I just turned 46 (october 15). Happy Birthday to me. Feeling a bit like I am going through a midlife crisis, learning curve with this break up and feeling I should have just broken things off YEARS ago. feel sortof bad about that but actually I decided to go to counseling and fix whatever it was that let me let it go on so long (look at prior posts obviously to catch up) but I was looking for a long term committed relationship and basically glommed (is that a word?) to someone who did not fit my criteria, was somewhat abusive and just not a good match and then sortof road it down to its death vs just leaving myself with my head held high

Worse than that I went to church last week and guess who is there?! this ex! I am church shopping (pastor left our church and a # of people left ) but was just going back to try it out again. I am thinking I will talk to the few remaining friends who are there. sit with them and see if I want to go back there or other churches I am looking into

I need a church home!

Anyway (onward)

I stayed busy which was good

Still believe Dr Amen visit and brain scan was the one of the best thing I ever did. very well worth it

Bought 2 homes, fixed them up and they both rent this week.. Minimal savings these past few months.

No more buying homes after this . I feel very out of money and short

I also made the momentous long time coming decision to turn over my rescue (largest cat rescue in Dupage!) to another larger rescue/shelter. They will keep the name, the paid staff, the cats and want to LEARN From us, our systems, policies etc.. and they will take any returns. Thsi is a large dog group trying to expand into cats. All volunteers are saying they will stay. Sad, scary, exciting I am SO HAPPY they will keep the name even short term so I can see what I built live on. Transition date is 11/20. I use the word transition the rescue vs Close as they are keeping it open as is but I will close down my 501c3 etc.. turnover all assets etc

I actually got income from this and it paid for some items so financially that $ is going away..e

I am actually feeling very short lately losing the rescue, obviously buying these homes and losing other income..

My goals I want to reach are building my personal emergency fund to $15k and building my rental fund to $30k

Can not be more impressed with my rental management company.. another one of my great decisions.. lower csts, homes rented faster, increased rents each year, lower stress

Lost 10-12# and look great..been working out and eating well (except these last 2 weeks when I was thrown for a loop by seeing the ex at church)..wearing size 6-8 and feels good to do so..

Also making friends, girlfriends.. ( I was isolating w this guy).. anyway making friends having my own interests is nice and also on match.com and meeting people. no matches yet but helping me crystallize what I want and determined never again to invest in time wasters! I am worth more and need to act like it.

Oh refinanced the house to a 15 year loan, 3.15 rate
My payment went down slightly from what it was before and truly no cost which was nice.

Work is 'ok.. just got removed from my lead role.. new administration sortof came in, took over ownership of this big program I was running and wanted their guy put in .I am still very involved just am not as responsible for its success. sortof a deflation but talking to people it is less stress. people still respect me turn to me and I am paid the same and can still work extra hours.

Working 50 hours a week still but not hard (esp now) and it is good income. Contract goes through end of year, project goes through June. (as of now) I expect to be extended thru June and will look for other projects after that. I am pretty valuable there so I am sure I can find something. still wanting to work at this company for 1.5 more years..

I will set up my 401k again next year to fully fund in 6 months

I may look into other FUN income opportunities (dog, cat behavior consulting. I used to do that. still get calls) to make up some loss from the rescue to keep my momentum going..trying to make up $2k but my main goal is to have FUN and get balance back in my life. no more treadmill of work.

Also investigating and having fun with thinking about what I will do AFTER June 2018 when the homes etc are paid off. I CAN take a lower paying job, do what I want and I want to explore that now. been looking at maybe going back to school for a Masters in Theology or Biblical Studies. not sure. just looking at stuff

I will have options if I run this right

Dad is still hanging in there but the best metaphor I can give is like when a top is spun it gets erratic towards the end before it falls down. that is sortof how Dad is.. signficant issues with balance, uncontrolled movements, sleeps ALOT, just feels he is winding down. SO HAPPY he is at Silverado and I see him every week. He does recognize me etc but does not talk much, more responds and watches. still walking well (very fast erratic walk)

I am happy for the blessings I have and hope to continue to be blessed.

have fun guys!

Bank holiday today which is why I can write a big post (I work for the worlds largest banking services and solutions provider so when banks are off we sloooow down at work!)

Rachael

Got featured in a nationwide blog (link) and other updates!

August 30th, 2016 at 06:20 pm

Hi all

Got featured in a nationwide blog. link here..

http://chrisreining.com/case-study-rachael/

The blog owner editted somewhat. I am not a MULTI millionaire but probably sounded better in the blog..

I am doing ok. the guy who moved out never called me. sad, hurt, upsetting but moving on. Making new friends, joined hte Y doing aqua aerobics. LOVE it.. being more active. doing redecorating w the house. and extending my fence. I am doing some feng shui changes. house looks fantastic.. lost 10 pounds without really trying. MUCH less stressed.. stil doing my Dr Amen supplmements and just signed up on match.com but definately have a clearer idea of what I want and boundaries and not letting my life shrink when I meet the next guy. I still think this guy will call. very sad shocking the entire situation but it did force me to look at the negative aspects and I was not really happy and it was not going anywhere on the current trajectory..just sad..I have grown alot maybe he has too but MOVING FORWARD and not waiting.. no luck on Match yet but on 'day 2' so not been on that long.

refinancing the house to a 15 year term. slightly lower payment even with NO COSTS.. rate is 3.625 with this no cost option...I pay almost 6 now on a 5/1 arm.. so sortof win win. appraisal next week then we submit. mortgage guy has initial approvals so hopefully it passes the underwriter. he feels confident.

We are getting rid of the last of the tenants my old Property manager put in. she is currently not paying rent (so no rent for August from her but took her security) and she is hiding from service. but next door neighbor says she talked to her and she is moving by the first.. so we will check the 1st and change locks if moved out. hoping that is the case

She lived there for about a year and place looked awesome when she moved in.. hoping for minimal work

outside of that the homes, units are plugging along. Basically after I make Sept payments I have 18 months left until the 3 units are paid off. that is my highest payment of almost $6k a month. what a relief and then 2 months after that the 2 flat will be paid off.. currently tracking to an average of $8k a month once paid off.

work still going well . very well . adding more resources. I am setting boundaries. having more ME time and fun time and it feels great..


and a MILESTONE. I have made the SAME AMOUNT (actually slightly more)as of TODAY as I did ALL YEAR last year from the rentals. so now all net profit from this day forward is MORE than I did last year. So trying to beat last year by $30k plus even with repairs

Fingers crossed

Things are coming together. jsut miss the male companionship and still feel hurt, sad, upset from the crazy situation with the last guy..

Rachael

Best rental month so far

July 20th, 2016 at 01:19 am

Guys

These are the much anticipated #s (at least by me)

MY NET this month (after taxes, insurance, repairs, utilities, lawn care) is..$10274.45!!!

It is really true. told you it was unbelievable. Crazy numbers

Again i do not pull from the homes at all right now. All that went towards mortgages, repaying back the emergency fund (done!! and adding to it towards my goal of a $25k emergency fund.

I do not have any renewals until I think October and everyone seems pretty happy so hoping to stay at similar heights the next 3 months.. 3 months at least.. more if we have no turn over and just renter renewals.

Also this month was a LOW repair month but WOW

My budgetted forecast is $8000 (taking into account a 5% vacancy forecast and approx $800 per month in repairs).. obviously this month I did not have any of those costs

Still working excessive hours and just got back from Wisconsin (work day trip) so going to walk on my treadmill and go to bed.. but WOW!!!

No word at ALL from that guy.. crazy. hard to understand just sortof walking out.. no communication at all.It still makes me feel very sad and often down. i am still investigating groups, activities and looking to make new friends. Last weekend did not go to church (had a delivery) this week will go to church and hopefully get back involved w that

feel SO MUCH healthier and alive w these Dr Amen supplments.

AMAZING change

I got a coupon for a reduced cost dental exam and xrays..$65.. I have always had good teeth so never really went to the dentist (I am 45, had not been since I was a kid). i went and the person said I had 'moderate bone loss' so recommended some 'deep cleaning' where they numb your mouth and do a scrape and polish or something,. I do not have dental insurance . their cash charge was $800 for all. Crazy. I thought about calling around for prices before having it done (my friend works at a dental office) but I was THERE and motivated to get it over with so I put the entire thing on my card (to be paid off next month no interest)N but had NO IDEA dental work cost so much. apparently though (they did the entire mouth in one sitting, apparently the norm is a few sittings.. I asked to just get it over with) but apparently if I take care of my teeth which I will I will not have to have that serious cleaning done again.. just maintenance cleanings

I am trying to get a hold of my friend to get her opinion on the cost of the procedure and good dental practices.. etc

it feels good to take care of myself!

Lots of updates, me and personal and financial doings

July 15th, 2016 at 12:35 am

Hi all

I will do a separate post on Dr Amen and my brain scan but in short I was VERY IMPRESSED< AMAZED, SHOCKED and I think doing that test will be life changing. you can actually peer into the brain and figure out why you are the eway you are in some respects, personality wise, mental agility wise, very informative. I got some supplements from the clinic.. and immediately (like THAT DAY felt much better.. shockingly so).. more on that later. I did NOT have early signs or any signs of alzheimers. Whew!

Other news. I still have not heard from that guy. very sad.. lonely .. downer. angry. sad.. upset.. stressed.. (less so w taking care of me and my brain) but really a downer. I want to find and have a good relationship.

In the meantime it really brings up how little social activity I have. I had said that before.. but with him goone. wow! I am joining back up in church, went out to the movies w girlfriends (first in a long time) last weekend, joined some meetups and am considering taking some classes. I also want to go to work and see if I can work there and if people are there. Currently I work at home all the time which adds stress to home and makes me feel stir crazy.. I left working at work in part because EVVERYONE worked at home so I would come in but turn on and off the lights and sit in a huge room alone. Hopefuly more people work there now I miss work friends. church friends etc.. My boyfriend and I did not attend church regularly. Conflict w that.. or disinterest on his part and I let it slide. another thing

I REALLY like going to church.. leading small groups. being involved etc.

Anyway..my main goal right now is to work on ME, my health , my brain health, stress level and level of social engagement.. ie build my own life before I find someone else and then not drop it.

I DO feel stronger with my personal situation but shocking that to have no contact at all. makes me feel stupid and undesirable

Anyway.. I am swamped at work so I asked for HELP to lower my stress level. I do not need 60 hours a week I want a LIFE too.

On the financial side

$450 left to fund the 401k in full for the year. It will fund tomorrow
Renewal at work for next year seems very likely
19 months to go to pay off the 3 units and and then 2 months after that the 2 flat will be paid off which will be everything! (except my personal house)
Networth OVER $1MM but w only $253k in investments. the rest in real estate
Biggest month so far in real estate coming up (or so I think) #s come out this weekend and I will report.. too good to share ahead of time

I looked into Mutual Fund Store adviser services, spoke w someone for a free report etc etc, then decided to go w them then half way through filling out forms I had doubts. so 1-2 weeks go by and I thought I had to fill out ALL the forms for this to start but turns out only key forms are needed so $50k was withdrawn from Vanguard and put w the Mutual Fund store at Schwab. Withdrawal happened to come at a high point and then was invested back at a low point so I made a quick $3k. Fee is 1.5%. I decided since it was already moved I will leave it there for 3-6 months and evaluate. I do like the Bogle Heads model so will do the rest like that.

I am busy cleaning up and doing deferred items around the house. This guy was ultra handy so intimidating to have to do things myself but so far doing and proud of it. and some items like 'yard work' are fun for me

I want to lose 20lbs and was going to go on a dating site..dating site in a few weeks . I want to build my independent life first

Considering taking courses.. yoga or something fun. .not sure if that is fun but just trying things out

If all works well (STILL have not worked out how to get out from under this personal home mortgage) but if all other stuff works well I will have replaced my income (actaully with MORE than I net now) at this high paying job in full by 4/2018 and will have options for what I want to do

I am raising my personal emergency fund to 5 months costs this month
I am raising my rental emergency fund to $25k by year end (that is my goal)

I really want a social physical job. giving tours outside or something or teaching stuff I enjoy sounds really exciting

We shall see.

Rachael

Feeling like progress is starting to speed up-Exciting

June 17th, 2016 at 01:38 pm

HI all

Really amazing.. highest net income month so far!
Filled that one vacant house
The other unit is filled (with guy moving in the 1st). we decided to wait for this guy as he is real good vs filling it sooner with other folks.. it is only 2 more weeks.

My total repairs (per the management company) so far for this year are approximately $5000 across EVERTHING!!

however I paid for $24500 in long term improvements and then that one house turnover. so 'repair, improvement' costs I paid for are approximately $27000

But I definately feel and SEE I got something for my $27k and the homes are improved because of it

In contract (cringing) with the old management company I was charged $27k (for the whole year) but for various misc repairs that never seemed to add up and if I were to look at the homes at the end of last year they did not look like they had that money spent on them at all

Feeling VERY good with this new management company. LOVE the reports.. love how tenants respect them and fall into line. love how things are handled

I am still on track to NET $60k this year even with my $27k improvements..This NET is assuming the homes were paid off with no mortgage... I have 21 months to go .. but tracking now gives me an idea of where I will be. AND that $24k improvement stuff I did this year. I do not have to do that again for a LONG LONG TIME.. if at all really..

Other good news..

I am renewed through year end..

I am also at $998,500 net worth. I will announce when I cross that $1mm mark.. most is still home value but savings/investments up to $247k and climbing.. still trying to hit $310k by year end

I will have completed the 401k contributions after my next two checks. that was taking 25% of my check. After that I will put that money towards savings . investments

Feeling I am starting to turn the corner!

Thanks all for the support and gentle feedback (haha) during the earlier times.

Rachael

Filled the house and more updates

June 10th, 2016 at 02:59 pm

hi there

I filled that house w the Section 8 lady.. she moves in today. other homes are stable. I still have not filled that apartment.., we are on the 3rd app though. First two did not screen well. Hoping for good news today. We are still showing and getting lots of action

40 days of vacancy from that house (over half of that spent fixing up the house though)
10 days of vacancy on this apartment so far

I saw someone else tracking DAYS of vacancy per units so I wil do that myself. good way to track and you can only improve what you track.

Last year under the other property manager it seems like I had months of vacancy (well I did at least on that one house) . I will look back through leases etc to figure out last years days of vacancy..

I still owe $5k back to my emergency fund so hoping to get htat paid off in these next 2 months.. and then I need to build that I think to $25k so I feel more secure having money flow in and out of it.. This time i had to use almost all of it to pay for some items but did not feel comfortable doing so so put in cash of my own

I can do that while I work and makes so much. in the future I do not want to do that

My goal is to save $4500 this month and put that into investments and then starting August to save $6k plus into investments each month

My net worth now is $991k ($9k down from 1MM) but most of that is real estate. I want more investment and cash net worth

Goal this year was $310k total investment/cash net worth (not including rental emergency and other funds). I am at $239k so an incredible $70k to go into essentially 6 months.. a stretch goal..
Rachael

Investing questions and 'financial freedom date' thoughts

June 2nd, 2016 at 03:27 pm

hi all

I was thinking of doing the 3 stock portfolio plan from Bogleheads with my money and just sticking to that with the majority of investing and then using a 'smaller amount' which is undefined yet to try other investments out or pursue other (Stock) investments. What do you guys do?

and thinking on 'financial freedom'.If no big hiccups I should have all these properties paid off by June 2018.. but realistically w this big house mortgage (currently $300k) I will not feel 'financially free'.. even if I reach my goal of $450k investing too. I need to do something about this mortgage. I also am thinking I need a year w this new property management company to feel good too. I also need to have a 'passionate goal or plan' and really do not have that (yet). My goal is to pay off all these properties and get the cash flow but then what

Working on all the above.. just posting..

Currently no plans to move from where I live now but just doing a quick check reveals several homes which are on the bike path (in other neighboring towns) with large lots, older homes with hardwood floors etc.. which I like and are less $$ than the house I live in now.. One even had a coach house which would be sortof fun and I would love to be on the bike path or nearer to downtown. The hsoue I have now ... though near the downtown of our town is NOT in the downtown and again the people are less friendly..

Got that unit approved for Section 8

May 31st, 2016 at 10:29 pm

Hi all

Turned out I got that house approved for Section 8 after having been previously pulled from the program. There were some very minor fixes (new screen door, screw on circuit breaker covers) to be done per the inspector and then the lease will be signed and she will move in. This will likely be another very long term renter which would be great.Target move in is Friday.

No takers on the vacant apartment but that lady is moving out today and it will be truly vacant tomorrow. We have an application pending and several more showings set up so it should rent soon. Hoping the existing application works out. Apparently the unit is in very good shape and should need no major or minor fix up . just a little cleaning.

We have one other guy in the 3 units whose lease ended 4/30 but he said he wanted to stay and sign a 6 month lease. We said either sign a year or move out and gave him 2 months to decide and during that 2 months he can pay $50 more. We will force the issue this month and either get him on a 9 month or longer lease or get him moved out so we can rent to someone else. I do not want to sign a 6 month lease that ends in December.

and then no other renewals until September and no large work needed.. so hoping to pile on the cash flow. I suspect that many of the 'later lease endings' will renew too.

All real estate tax 1st payments made

I have about $4k more to 'pay back' the rental emergency fund. I will let the rents pay the rest of that back and estimate that happening in 3 months so my savings will continue in earnest starting next paycheck. My savings comes from my W2 income. All rental monies stay in the LLC at this point.

Rachael

Rental updates, job update and life

May 27th, 2016 at 06:33 pm

Hi all

We have someone who looks good for that vacant house. Section 8 inspection Tuesday. This was the house that was REMOVED from Section 8 due to a bad history from the owner. I got Section 8 reinstated on another house w this issue.. hoping to get the same here.. No rent increase.. in fact $20 less but filled same month, we can ask for a rent increase in a year and generally s8 are much longer term tenants. vacancy is REALLY expensive so trying to avoid that at all costs.. turn over is really expensive too . .I just spent almost $2k getting this house fixed up. do not want it turning over in a year.

Person for 3 unit fell through and chose a place nearer to her work. We are still showing it and still aiming to fill for the first. Fingers crossed

My boss says she IS going to renew me . My contract is up July 7. Not sure for 6 months or longer. I asked for a year and talked to her boss who says he has budget.. and in fact I am already in this budget through year end and he will be put me in for next year. project I am on is likely to extent into mid next year

After July I will have maxed the 401k.. so my paycheck will go way up. What ever that 'difference' is will go directly into savings/investments

HIGH repair month last month and missing 1 month rent.. but still getting NETS of almost $6000. I had almost $3000 of repair maintenance costs last month.. upsetting but not avoidable.. house fix up..fence.. water heater.. sewer rodding.. were among some of the larger items.

I am considering ending a relationship and just sortof moving on. always upsetting/scary/stressful to end a relationship but does not appear to be 'long term' and sortof feeling I am wasting my time and feeling 'stalled'.. just a lot of stuff..

About it for now. despite some bumps here and there still thrilled with new management company and my plan.

For the end of this year I will still save as much as I can.. invest.. develop systems/ processes for the rentals and continue to work on creative ideas to get this house (where I live) paid down significantly..

what a feeling it will be next year this time when I will be essentially 1 year from having all properties paid in full and likely receiving over $8000 cash flow.

Apartment in 3 units rented

May 12th, 2016 at 09:00 pm

Good news..

Apartment in 3 units was rented for June 1. Got a $50 increase. So should be no lag time or just a few days lag time between move out and move in. This is the second time they rented the a unit before the unit vacated

All work done at the house that we are renting (well steam cleaning happening today and final work so will be done by end of day) I feel concerned I went with too dark a color. I will look at it all cleaned up Saturday and with lightbulbs. Showings start tomorrow. Fingers crossed.

Tenant in 2 flat. We will sign to a new lease.. 9 months. no rent increase (manager feels she can not afford it).. all rent due by the 15th if paid late gets a $75 late fee.

Rachael

Rental updates, job updates, misc

May 10th, 2016 at 04:34 pm

Hi all

I got the 2 flat.. 14% CAP rate. upper unit is up for renewal and wants to stay. She currently has until the 15th to pay her rent and gets no late fee until the 30th. I do not like that at all. We are going to give hew a new lease and set it for rent due date the 1st, late after the 5th and if she can not accommodate that the latest we will go is the 8th for rent due with no late fee. I need to be able to depend on the cash flow. Currently she has not paid rent and I feel angry with it but we will fix it with her or find someone else. REAL good time to get new tenants. I will raise the rent slightly on her too.. so far rent increases for the year have totalled $110 and we are listing that house at $90 more rent than what it was and the 3 unit at $50 more rent so hoping to get good increase there.

Other than that all rents in.. and homes are going very well.

They are showing the 3 unit that is up 6/1 now and getting lots of showings at a $50 increase in rent
and will show the house that was recently vacated starting Thursday (have a list of people who want to see it). House is being repainted and minor fix up and cleaning. Turning over this house with top/bottom paint and cleaning, minor fix and carpet clean is expected to cost $2000+. I am so glad this firm is getting better long term tenants and so glad I am LEARNING about costs and how to cut them. Feeling the best I have ever with the homes and plan.

Speaking of the plan. I need to increase my rental emergency fund with all the homes to $25k. I will work on that gradually but that is my new goal. I need that to avoid cutting in to much my cash flow per month when I start to rely on it if I do major fix up works

Still looking at $7-8000 net based on CURRENT RENTS (now).. Wow. did not think I would come so far so fast

Still no plan to pay down house (my own) or reduce housing costs.. monthly mortgage is $2700 but I pay $450 extra.. that is a big chunk if I only rely on the rental income.. I want my housing cost lower.

My contract at work is up July 7.. project I am running is expanding and has at least til November to go. I iwll ask for a 6 month or more renewal. Actually my plan is to talk to sales and get a read on what else they are trying to sell to this customer and get an extension for a year or past Christmas.

Paying back my rental emergency fund has crimped my savings for last month and this month but will resume regular savings next month.

About all for right now. Have a good day folks


got news on the Section 8 rent increase

April 28th, 2016 at 09:50 pm

Hi all

Got news on the section 8 rent increase on that house I was going to sell. I got $50 a month increase but they say to apply again next year. I was hoping for a $100. I would get more if I had a new tenant but my current tenant .. her kids all moved out so she is on a 'smaller voucher' .. she has a 2 bedroom voucher vs a 3 bedroom so section 8 is limited. The house is a large 3 bedroom.

Still a good increase..especially for no work and got $50 more. We will try next year and hopefully she stays but if not I can repaint, do fix up and expect to rent it for probably $1200 or more.. current rent WITH INCREASE is $1075.

Rent increases so far this year are $110/month

2 flat and rental updates

April 27th, 2016 at 04:10 pm

Hi guys

2 flat closes Friday. 14% cap rate..

Got 2 renewals at the 3 units and 2 people moving 5/31

Got 1 sudden move May 1 (or this weekend) at a house . I will look to turn that around asap. We get keys this weekend

My goal was to raise rents (across all units ) by $600 this year. So far we are at $60 and got room to raise for the NEW tenants at the 3 units (start them at $50 more hopefully) and then at the house that is vacating ...hoping to start people at $100 more if I got section 8 or maybe $50 more if I do not. and still waiting to see if I get a rent raised on that Section 8 house I decided to keep. Hoping a lot more people STAY this year so we are using our judgement when we raised rents on existing tenants (we had alot of turnover in homes last year)

Still on track with all the fix up work Should have that paid off by June 15 and back to $15k emergency fund. Hoomes with new siding and roof and landscaping and driveways look great. Doing the fix up work took a dent out of my monthly savings for April and will impact May as well.

Those fix up items were my last big items this year.. now costs will be limited to general maintenance and rental turnovers

Exciting to see how I turn out this year with my total nets..

Updates , new 2 flat, taxes, rentals

April 17th, 2016 at 09:13 pm

HI all

looks like I will close on that 2 flat at the end of this week (hoping so). had to get a new attorney (seller side) the attorney got sick and file was dropped.. we just ordered title Friday.. anyway hoping

The work on the homes looks great.. 3 driveways (where there were none), roof and siding and major seeding where yard got ripped up due to prior foundation work

I have money or credit for all of it

tax refund came in at $9200 and I am setting up with an attorney next week to figure out ways to save on taxes next year

I owe my rental emergency fund $13990. Entire $9200 will go towards that and then I have approx $4500 in repairs on a card that need to be paid off (linked to the large repairs). I will pay that off next month which leaves me with about $5k left to replenish the emergency fund with. That should take one more month

The only other large items I want for the homes are siding the 3 units (not a need and not scheduled but they have really old siding). Quote is approx $13k

One of my tenant suddenly got custody of their kids (the dad) ex wife ill or something so he is moving out immediately to a large home. the property manager is taking his security and letting him know he is on the hook for rent until we find someone else. Hopefully that will be soon. I predict carpet clean, paint and clean with not a lot of fix up. Manager thinks he can get $65/month higher rent. the guy is predicting he will be out next week or mid the week after. We will see. Home will be advertised as soon as this guy gives formal notice (expected Monday). and I have already notifed my 'crew' of paint/fix up guys

Got 2 move outs end of May (at the 3 units)

I am really keeping track of vacancy and 'time to fill' and 'cost to fill' this year as I near the time when these homes will be paid off

I paid $985 to an attorney to do a wage garnishment suit against that one tenant from last year. he works for the gas company (so good candidate for this) and I am trying it out. I have never pursued wage garnishment, bank levy before. $985 is my total cost and they add that and more on to the tenant balance. It would be great if that worked out and was a viable option for me. If it does not I have learned a valuable lesson.

So far NETS from homes have been the following (net of everything-EXCEPT the large $22k repairs which are funded from a different fund). I think I will expand my repair fund to $20k and keep it at that. Another goal for this year. I get section 8 on the first and the rest averages around the 18th

FIguring out vacancy and time to fill and time to fix up will be key to be determining or feeling good that this imcome (or whatever lower amount of this I decide) can be counted on monthly. I allocate $15,200 in the rentals yearly budget for repairs AND vacancy (vacancy covers the costs associated with lack of rent, fix up to turn a unit over, and property manager extra fee to fill). I will see how that figure lines up with actuals this year

Approx monthly nets so far this year (IF homes were paid off.. which will happen 6/2018.. currently all overage goes towards paying the homes off)..

Jan- 5750
Feb- 5300
March- 6725
April- 7300

My budget calls for an average of $6500 a month.

Updates on rentals

April 7th, 2016 at 01:06 pm

Hi all

All rents in. I am SO THRILLED with this new company. They enforce late fees. rents come in sooner. I am hoping for less vacancy and faster filling of units (I will decide if that improved by year end but I think it will)

Tax results today. My accountant says betweeen $5-10k and was going to work on them again.. Appointment is at 10am.. So fingers crossed for the 10k figure. I took out $14k from my $15k emergency fund for rentals to pay for the siding, roofs, driveways, seeding work. Good investment I think. not done yet. the rain/snow has delayed things. That is ok with me as it gives me more time to pay. My tax refund will go towards that and then predicting 2-3 months to rebuild my fund up

Suburban rust fix should be done TODAY. excited to see it. again I was referred to a long time client of my accountant so I am sure it will be done right or fixed if not. no one wants to make their accountant look bad.

I looked at my #s again and not sure what I wrote before but I fixed an error in my spreadsheet and hre is what it is

IF the homes/units were paid off I would have made the following

2014 $20k
2015 $34k

Last year I actually got LESS RENT than 2014 I think due to vacancy poor management . just nightmares. The only reason my net was more was because of less repair costs

2014 was my big fix up-repair-improve year

and this year I am targetting $60k This year before the subtraction of the $22k improvements (which will show this month) I was at $18k net for Jan-Feb-March. this subtraction will take it down to negative and then I have April thru end of year to make that back up and reach $60k. I get rents deposited on the 15th of each month

I really want to get it up to $70-80k a year..

Next year will try for higher.. key factors are vacancy , repairs, time to fill vacant units

Thrilled with new managment company. bringing me to new heights and making me see and think my 5 year goal can be a reality

Literally I am starting to wonder. hey should I do a career change, take some classes.. feels like the world is opening up.. investigating hobbies.. all of that

Hope to hear on that Section 8 rent increase this week or early next. This is on that home I was going to sell then got some advice from here and others and decided just to keep it. it is fixed up, rented, new manager says it will not be hard to rent. so why not keep it.. and if I can get a rent increase of $100 or more with the current tenant .. even better!

I know I am not at June 2018 yet (5 year goal end date) and there are still upcoming challenges but it feels like I am OVER THE HUMP and no longer climbing the mountain but managing my way downward.

More rental updtes

March 24th, 2016 at 01:44 am

Hi all

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.

Loving it

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

Rental nets from years past-true numbers

March 21st, 2016 at 03:43 pm

HI all

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.

Rachael



Net rents update-highest month so far.

March 17th, 2016 at 02:02 pm

HI all

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

Rachael

Got my 401k match and possible new 2 flat

March 14th, 2016 at 10:28 pm

HI all
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. Smile

Rachael

Good news updates, rentals (govt payoff bombshell at least to me)

March 7th, 2016 at 05:07 pm

Hi all

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!!!

Rachael

Updates, rental and 401k

February 29th, 2016 at 04:26 pm

HI all

Quick updates

ALMOST done w gathering all info from taxes. Hoping to get LOTs back but not sure this year as I have the '6 homes payoff' and more income and other stuff. Hopefully my accountant can give me a rough idea in a few days

I decided NOT to sell the Victorian house. at least not right now. It is rented, does well and I have done so much large fix up (new roof, soffits, gutters etc) that I do not think it makes sense right now PLUS I found a way to ask Section 8 for a rent increase even with the tenant in there

We have a potential tenant for that one vacant house.. we will hope to firm that up early this week. Fingers crossed that works out. She want to move in right away. 1 lady, 7 year old kid, very good references

My net rents are SUBSTANTIALLY higher w this new management company. hope that continues.. be interesting to compare last year to this year

exactly 2 years left on the 3 units.. payoff 3/2018

My 401k is matched 3% a year but deposited all at once. so interested to see what that deposit is for last year (I carry the expected match to the left). I should have that match in the next 2 weeks

Onward!

Rachael

Rental update and general life stuff

February 15th, 2016 at 03:34 pm

Hi all

ALL rents in this month, have an application on that one vacant house (hope it turns out) and lots of showings set up. 2 of the 3 units coming up for renewals in 75 days (the point the system throws alerts) so either will turn them over or renew. I can expect to get $50 more if turned over but as I look at my list of larger things I want to do I want to spend less on general turnover. In either case, my turn over cost are MUCH less than last year.

I feel so much better controlling and reviewing the 'fix up work' between tenants. I get to know the homes more and feel in general less stressed.

I have a list of items I want to do this year (improvement type things) to the homes .. but really all improvements should last a number of years so once I get this final round done should be just repair/cosmetic

I do my big excel sheet today (on the rental costs from last year). it was supposed to be systemized and easy and it will be this year but from last year I have the old property manager who gave me no reports for the past however long and then just one long excel sheet at the end

Anyway. still on target to pay off these 3 units march, 2018. if I buy this 2 flat I will set that up to pay off by then too

Feeling better in general about my health/future ( I got sortof thrown for a loop with Dad getting sick so fast) but looking forward to doing other new things, jobs, volunteering and incorporating that into life now

Still have no concrete plan to get this main house mortgage down. I want it to be under $100k by 6/2018.. that is my only goal with no clear path

I DID hear loan rules changed and may be able to switch to a 15 year if that is the case and keep the same ppayment but just 1/2 the term which wil help quite a bit

We shall see

VERY GLAD I switched property managers. one of my better MORE IMPACTFUL decisions in a long time.

Investments are WAY DOWN but just putting in more each month. and have the 401k at 25% . that is the amount I need to do to get to $18k by July1 (current contract end date). It will be fun to see the big change in investment value when things go the other way but for right now with things going down it is sortof scary.

Got some interest in that house. We have a call today. So will see on that. I will share later.

I Do still want to upgrade neighborhoods but do not want to give the house away either but sometimes it is better to cut your losses.


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