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.
Viewing the '6 homes-rentals' Category
I got renewed but for only 5 months!Crazy. I have a new boss though and they said that is all they thought they could do. I did check and the position is budgetted for the the year. My old boss is trying to get me a 1 year extension which they had told me they would do in the first place. Fingers crossed.
Anyway.. have not done tax info yet but i AM looking at this year NET rental income I get and big change w the new property management company. less costs.. less hassle etc.. and I have one unit not paying (eviction date 2/2 if not out by then). Hoping the upward and stabilizing trend continues
Anyway I am thinking though and the biggest (not worked on yet) barrier to financial freedom for me is my house. I owe $300k . can not get a lower loan (though my rate is ok) but I can not get ANY loan reallly or any good loan for apparently 6 more years (unless rules change which they may) which means if I sell/move I would have to go FHA or something else.
I am NOT thinking of selling but need to get that balance down! I pay $450 over a month but still not really making any huge leaps in paying it down.
House is still nice. still in a good area.. still hoping neighbors move though (on my one side) and I may extend my fence.. I am kicking myself for NOT doing it last year .. instead I used part of their 'rear garage' as wall sortof so I did not have to fence that length..
Stil trying to get to almost $500k savings (only at $200k now) by 6/2018. it will be a stretch unless the market bounces back up and I continue my super high savings rate.
where do you guys suggest I investigage long term care insurance?
New 2016 goals below and on the left. I have NO pending large repairs across the rentals. what a change. the first two years were ongoing repairs and fix ups.. no such pressure now.. of course still maintenance and I do WANT to do some long term things but they are not required..
Still setting personal goals.. looking forward to another busy wild and crazy with ups and downs year.
Need to reduce my stress, the amount of stuff I have going on and do more for ME
GOALS FOR End of Year 2016
1. Maintain emergency funds at correct levels
2. $310k total savings and investments
3. Increase rents across all units by a total of $600 month by year end
5. Fix up/raise rent or sell 411 house
6. Buy 2 more homes
7. Fully fund Roth/HSA accounts
8. Fully fund 401k account
I will try to fund the HSA and Roth by February then all the rest goes towards taxable savings.. I will try some of the methods folks are using on here to track #s etc. I do VERY little tracking of personal. adn want to do more.
If the 3 units were paid off and I was not accelerating payments on them so much (I pay over $5k for the mortgage right now) I am at about $7k net cash flow/month with a 5% vacancy rate and other escrows included (tax, repair, insurance etc).. I am still smoothing things out so NOT at that right now.. but these 2 months w the new property manager have been the best in terms of stress and money in a looonng time.. I will check my vacancy rate these past 2 years .. and then again this year and onward. I have the feeling I will have less vacancy adn faster tenant placement w these guys..
really excited to compare this years #s to last years and have some more baselines. I did have a handy dandy excel sheet for that (which I still do) but lack of management reports and accountings from the old manager for 6 months makes it more challenging..
We got default judgments on both tenants. which means we get immediate possession
1. first tenant has already paid over $1300 to get caught up and formed a plan to pay the rest by 1/8. We still retain the right to remove her at any time up until paid in full. Mgmt company is adding legal fees to her bills too. MUCH lower legal fees w this company
2. 2nd tenant says she is moving by the end of the month. We will wait to engage the sheriff until then
struggling to put as much into savings to reach some goals by year end..
Goal (not on left yet)
300k by 12/2016
had a great meeting w my property manager
Felt more confident, reassured, got more access to their system and my data. They showed me how to access 'notes', 'event history'.. everything.I can log in and see if rent is paid and if not I can see the notes of what they are doing about it. Still having to toss 2 people.. upsetting .... court date ALREADY set up though for the 15th on 1 and still setting court date on the other. I want good LONG term tenants and good properties
house across from my Victorian is SMALLER and listing for more than I wanted to sell mine for. wow. Hope mine sells well next year.
ALso having some new thinking about section 8.. these people really have a system for handling section 8 and it might be worthwhile. they know how to handle the tenants and I can tell the tenants already respect them
I have MUCH LESS stress from the homes
I stil think I am 2-3 months out from smoothing the homes out (getting these folks out, new folks in) they sent out new leases yesterday so the tenants are on their leases.
Repairs so far (have not been many) have been reasonably priced and well done.
We have a small backlog of minor repairs to do from the prior manager but feeling very good and like things are being HANDLED
also makes me think I can buy more.I am still short of my $8000 net a month goal (even if the 3 units were paid off) there is an investor who wants to sell this house that is in real great shape for $62k.. and it would rent for $1250.. looking at it
Work is ok. feelign on track but feeling sortof bored too. want a new challenge
I am working out and doing more things but still troubled by this personal relationship.
I am REALLY feeling like I CAN DO THIS.. and meet my goal of $400k by 2018, $8k net cash flow and be on my way to relaxing more and freedom.. Wow..
Accelerating payments on the 3 units makes things tighter but I wanted to force myself to do it
Been swamped and struggling with what to do with a personal relationship... have not figured it out yet.
Anyway. back to finances
new property manager still going well. some bumps in terms of communication but overall much better. We have a face to face meeting today to check progress after month 1 and I will talk about communication etc expectations. I feel confident we can smooth it out.
Meanwhile they are MUCH tougher with rent and faster to serve 5 day notices and get people on track which I like.
STILL smoothing out which is upsetting but necessary and hopefully this will be the last time.. We are doing 5 day notices on 2 tenants.. both the old property manager put in.. both fairly new. one is that tenant he put in after 4 months of searching or 'not searching'.. whatever. Anyway I feel good these people will put BETTER tenants in faster.. Hopefully that is the case and I really feel it is.. very happy w new 3 unit tenant
The Victorian I was going/am going to sell next year/this year.. I just got a good comparable on it. the house across the street just listed (not sold) for MORE than I was going to list mine at and mine is larger etc.. so hopefully I can get the price I want for mine but really I do not have a lot in the property so just want to move on.
Section 8 inspection over there went well. much smoother.. lower cost.. LOWER stress.. we have another one this month on this other house
We are also going to have to turnover 1 unit in the (2) 3 units. and will look to do so for the $50 upcharge we did last time.
They moved in someone within 3 DAYS (of old tenant move out) to fill that first 3 unit vacancy!!.. so almost no downtime. minimal cost to fix up. just great
Hoping that repeats itself.
I have now determined I can NOT refinance out of this loan for some time (my main house loan). so committed to sticking around at least for a few years.. house is a nice ranch.. large lot. updated.. great area. I have my big fence up so private.. sortof like a 'compound' and house has all I need..
I AM paying $450 more a month on that mortgage.. .. started this month
Goal is to get under $130k by 6/18
I also talked to the 3 unit seller (I have a seller held mortgage) and re amortized the loan to pay it off by March/April 2018. With the payment being due on the 15th and the automated system w the new property manager only sending checks the 14th and 28th. this requires me to keep $4k in the account as overage. I am doing that this month. After that. I should be able to pull cash from the account each month and still save on the side. Overall savings goal is $5800 a month towards my investments funds or to fund ROTH IRA and HSA. I will also contribute to the 401k
I AM getting renewed at work which is HUGE (but paperwork is not in yet so not counting chickens until hatched/signed)
So counting my blessings.. still struggling getting these homes/units under control but feel I am coming out on top and feel good I am with a company (property manager) that is professional, cares about the upkeep, is finding good tenants and cares.. ie wants to do well and HAS SYSTEMS in place to do so.. I can tell tenants already respect them more.
I feel my goal of $8k a month NET passive cash flow is in reach. I am still challenged by the $400k by 6/18 but definately in reach too and still need ideas to get the mortgage (main house) under $130k by 6/18
I feel am going to reach my goals.. maybe I can even go full time sooner. I am liking my job. I work at home. and do well. full time will pay $105-110k and comes w 3-4 weeks vacation. why not? or take something else. I want to travel, do stuff.. live while I am young.
I am excited to do 'year end math' and see how I did in all areas.. I know I was way over with vacancy and repairs for the homes but tracking (and new management and learning) is the first step to improvement. I have approximately $400 to go up in rents still that did not happen this year.. (below market rents not just renewals) so if these people move out and at least 2 of them are next year.. I can raise those. this will also mean rehabbing the last 2 homes (if I do not sell one first) . It feels good to have the homes up to a baseline (the ones I did do) and just in general things more under control. By the way. I am now looking for LONG TERM tenants and to keep good tenants. this year poorly handled turnover, legal costs etc, rehab due to new tnenants was my largest expense! Here is hoping that takes a dramatic turn for next year w the new management.
got some preliminary tax dispute results. I disputed taxes across all my rentals. 6 homes and 2 3-units. i currently pay approx $18,500 a year in taxes. I have no experience in this but was hoping for a $3600 decrease. Got an email from the attorney (she only gave me the NEW assessed value) but appears based on the new assessed value I got a savings of approx $1250 across all (she sent a letter with full details and the translation from assessed value to amount saved). Anyway she gets 1/3 of the first year savings so if my calculations are right (had to get current assessed value and tax rate of the city website) then I owe her approx $400.
My personal residence is up next month (court) so hoping for a big decrease on that.I currently pay almost $10k
I think it was worth it. but looking forward to actual numnbers she calculated in case mine were incorrect.
This tax decrease on the rentals raises my profits approximately $100 a month for this year and on.
Found someone else to do the refinance with. the file is w the underwriter. fingers crossed. I can get either the same rate 3.25 with OUT many closing costs cover or a slightly lower rate. I SO MUCH want to be out of the refinance.. having to get a new loan every year business!!
Settling w my old property manager. his paperwork and reporting is not very good. even he was not able to justify numbers..he came to our meeting with a stack of papers and we both used calculators for 2 hours.. but we are working it out. VERY high expense numbers again this month ..but that should smooth down
November 1 starts the new property manager. Hoping and thinking that works out but scary leaving and having a change in that area..
about it for now
DID look at homes in high B areas and still lots of REO or foreclosures (some in good shape) so I CAN swap out my homes in C areas for high B areas with less differntial than I had hoped. and may be better long term..
My birthday is TOMORROW!! 45..
rental updates. All units filled. (thankfully)
Existing project manager has taken price gouging it appears to a new level after my giving notice. I had to speak to an attorney and really just out of control. I finally got him to stop (I think) just removing whetever he wants from the rents. We are supposed to meet this week on over $2000 (OVER TWO THOUSAND DOLARRS) of unauthorized, unapproved, repairs that I had no knowledge of. Attorney says to just settle, not worth it to sue and hard to prevent him taking the money on such short notice without disrupting rents. Crazy.
Anyway. swapping homes on hold. too much going on. person who runs my not for profit has been in the hospital this week and may need an angioplasty! and be out for a a few weeks. REAL bad news. not set up to run this in her absence very well
Dad doing well but steady decline. now it is hard to hold his fork so he eats sandwiches, he thinks he works still and gets $9000 a month. We normally go along w him and do not contradict just 'redirect'. however this time (as he asked me to go over his finances) it was awkward and sortof accusatory as the $9000/month was not in his accounts. Stressful. Facility says to keep conversations short on finances, do not bring it up, if he asks reassure funds are safe etc etc.. and redirect. They said accusations, suspicions are common. Uncomfortable.
Anyway. I am grateful I am able to contribute $2k a month to the 3 unit fund (payoff w $69k in June 2018 and I already have $4k saved) and save even more after that. Still paying back various funds for the 6 homes but feeling better
REALLY praying the new property manager is better and he should be. main issue is renting these harder to rent ones (which we just did and this new manager is definately going to be better at I think) and stopping unnecessary or made up or just 'unknown' costly repairs all the time. New PM notifies me w costs of ALL repairs up front and takes photos as his NORM. He also logs all tenant calls
New tenants both look good . both have family and friends in the area and both want to stay a long time
Hopefully that is the case.
Existing manager still has not renewed those leases. What is he doing.
Just his quality of service has gone way down
I only have 2 section 8 homes now.. vs 6 originally. this should cut some of my repair costs too as I was having to have yearly inspections on all before
First hearings for my rentals start Oct 22. I have seen the comps and we have some good comps that really might slash my tax bills on these considerably PLUS.. where I live.. Naperville. the dispute period opens next month but in just perusing the assessor website myself I found a house 2 homes down with 700 MORE square feet w an assessed value more than $50k LESS than mine. Hoping to get major tax decreases through this appeals process. Dropping $50k off my assessed value has a $3500 impact.. and that is still 700 square feet more room than I have.
in other news..last unit filled w the rentals AND got 1 renewal at the 3 unit, pending 1 more and pending the new renewal lease on that one house
the existing property manager and I are under tense relations as more and more stuff, inattention, errors come out. double billing, missing credits for rent payments, charging me $2500 last month for 'repairs' I was not aware of and am disputing.. and he is struggling to substantiate and now trying to settle w me for a lower amount. may have to get an attorney involved... also these renewals should occur BEFORE the lease term ends. just on and on . anyway.. one more month w him and then hopefully improves and really one of the key areas was repairs (not knowing about them, price gouging, inability to trust the repair was actually done not just made up etc etc). New property manager gets my approval BEFORE starting work and gets an estimate up front and takes PICTURES! and I can talk to the repair people if I want
again I looked through my notes. this did NOT occur w this properrty manager upfront. just got progressively worse..
Both tenants we moved in want to stay a long time and have friends/ family in area by the way.. hard to get cheaper fixeed up homes then the ones I have so may hang on to these.
So have a lot of people wanting to stay in these 'hard to rent homes' and have only 1 house that may makes sense to sell right now and investigating doing so. apparently per realtor and new property manager though, there are people starting to buy up to live in this area so area may be going up.
Totals are in. I raised rents $306/per month this year but vacancy (evicting 2 from the 3 units, and 2 slow to rent homes ) has me way over my vacancy budget and all these unexplained repairs and what feels like price gouging has me over my repair budget. The rehab I managed myself was over $2k less to do MOMRE work than through the property manager and I hired actual tradespeople not folks off the street
I opened an HSA with Health Savings Administrators or healthsavings.com. Flat rate of $45 a year. There was one other one that might have been less cost dependent on how you invest, how much you had in there etc. this was $45 flat and had good Vanguard funds so felt like the easier choice.
Plan is to use this sortof like a 401k and NOT withdraw from it (unless some dire medical emergency) until retirement. This is one I set up individually not through where I work so money put is in AFTER tax but should; be tax deductible. Limit is $3350 this year. Will try to fund this , the 401k and the Roth every year. Trying! I put $50 in it to start the account.
Trying to be financially free in 5 years is exhausting stressful work!.. less than 3 years left.
that rental house is filled. the other house is almost filled. still confirming things (manager is slow)..
New strategy w rentals. I am going to get some outside opinions , use the web and get selling price estimates across the 6 homes so I have a good market value and look to 'swap' some out that and increase the quality of the neighborhood and therefor maybe lower my costs, not be so stressed with management etc etc.. . Step 1.. get market values this week ( I will get the 3 units value even though I can not sell that right now and really do not want too. rents easily, good area, great cash flow but realistically long term mayeb I would want small homes vs apts.. we will see... be interesting to see what folks think it will bring). 2. decide which to sell.. 3. I was going to take a stab at selling at least one via investor contacts and Craigs list (yes, really) have had friends sell them like that. why not me? 3. get a pulse of the market and homes and prices to see what I can buy w the cash 4. run my thoughts by some advisors for thoughts about selling at all, sell now or later. 5. get the new managers thoughts on ease of renting these homes. really we have only had issues with one home..
I may lose some cash flow upfront if I do this.. but steady returns and simpler may be preferred and cash flow will come as it is easier to raise rents on a more highly desirable area.
I can not be 'financially free' when I am stressed w the rentals anyway..
I did go for lower quality areas to 'get in' and do not regret it .. easier to get in.. much more cash flow...now I have somethign to swap... but is that where I want to stay??.. I am not thinking so. I have options now to 'swap' out of them and I think I may take that opportunity.
Anyway. just thoughts right now. got to get some facts, do some research and think on it. no more fast decisions over here!
Updates. I think we have that 'harder to rent' house filled with a tenant I like. Manager is setting up a lease appointment. She has family in the area and wants to stay long. Fingers crossed.
House we rehabbed. we have someone lined up for that as well but she wants to move in on the 1st. We will do final checks and then sign the lease w her.
New manager starts 11/2. Excited.
Renewals notices are out for that one house..and one apartment. should have news this week
I am thinking of doing an HSA as another tax savings retirement vehicle. Any thoughts of where to put that. Healthsavings.com looks very good and has a $45 flat fee each year. $3350 per year limit
Still trying to max out the 401k. got $3200 left to fund.
ON the 2nd round w the refinance underwriter.. got another 'condition letter' w items I have to fulfill. Will work on that tomorrow and hopefully close it next week.
I will NOT fully pay myself back this month. I had hoped too but looking like I may end up short.
thanks for the feedback on the property manager issue. here is where we ended up
1. Current PM will terminate 11/2/15. Rents for November will go to new PM. I need to send the new PM an updated contract to sign. he did sign the one calling for him to take over as of 10/1
2. Current PM will keep the vacant homes until that time. The one I am rehabbing is done and BEAUTIFUL. he has showings tomorrow and one person we took an app from who wants to move in who has family in the area and is likely long term, Other vacant house, he has showings tomorrow and had a good one yesterday. Fingers crossed. we went over what he is doing and the only thing I can add is to put it on the list at Section 8 whch he should have done already.
Meanwhile we have 1 house and 1 unit coming up for renewal. Both look good but he did not send renewals out yet (hello??) but claims to have talked to the house and they want to stay another year. He has not called the unit yet but send out the notice today. He will have updates next week.
All rents in except vacant homes
Paying off the 6 homes makes a MAJOR difference in the cash flow across the homes and my own budget. I had a mortgage of approx $5500..
I am still however catching up after paying my part of paying off the 6 homes so super tight this month making my savings goals.
Work hours are slightly down w the holiday and took a day off here and there. I should average 48-50 again as of next week
I have had contact with the office of the new property manager and they are very professional etc.. organzied really excited. AND they are 2% less.. over $2k a year difference and will work w my contractor.
For this 'hard to rent ' home. the new property manager did not feel it should take 3 months and talked to some folks who felt the same way 'unsure why it is taking so long'... Regardless, IF this house IS this hard to rent, I will look into selling it and others on that street and buying easier to rent homes/units with the money.
Calm and continual cash flow is my goal
I will hear on my tax dispute in November across the rentals. Hoping for a $625 decrease each month in taxes but have no experience or facts to base that estimate off of
Still trying to reach $8000 stable monthly cash flow by 6/18
Did second submittal for refinance on main house. should hear next week. (had to submit a bunch more docs)
My property manager contract calls for a 60 day cancellation notice. I talked to the current PM yesterday and he was saying he will hold me to that and in general not very nice. He also has the house he has had vacant for 3 months. He says 'no one is going to rent is faster'. The seller (65+ year old owner rented it before on his own). We are hitting the slow renter season and I do not want that particular hosue waiting 60 days to turn over when I know this other guy can rent it faster.. and/or to a better client
The current PM says he has 5 showings set this week. betweeen Thursday and Saturday. I told him we will talk later in the week so I could figure something out and get ideas from folks. I feel like changing the locks or doing something 'forcible' but then he has all the other homes.
he makes nothing on the house right now and is likely just being an *****.I can not afford to have bad property management causing me months of rent. but can not afford to have him mess up the rest of the homes too.
Diarying. been feeling a little 'unfocused lately'.
In a relationship and wondering if we are compatible or going anywhere.He does not express himself as wel as I would like w words.
1. 6 homes bought! took more money than I had thought and had to rehab that one house. already paid back my emergency fund.. got to put $3500 back in the personal emergency fund
2. now that I OWN these I feel a little more serious and long term. Anyway. I gave notice to my old property manager .. he still has that 1 house sitting and 1 house I had to manage the rehab (which was not so bad as i learned and got it done how I wanted and for 2k less )but he did not assist with meeting people, reviewing the work etc. . Anyway I gave him 30 days notice. He says the contract calls for 60 days. I called him this morning and his VM was full (not an unusual occurrence).I am going to ask he release the homes in 30 days and that 1 vacant home immediately. I will update.
3. Put my first $1750 into the 3 units payoff fund. Looking to pay those off 6/2018 and need $69k
Basically switching property managers as the one I have (though better than the one I switched from who ran the 3 units)
1. he is overwhelmed and is a 1 man show, he has 2-3 times voiced concerns he may 'quit this' if things do not improve. VM Full often and several times got complaints from tenants he did not call them back. Not organized. reports late or not submitted at all. Still waiting for July, August reports and laundry $ from 2 months ago. Does not renew leases on time.. Having to remind him of things all the time
2. Does not have a good relationship w section 8
3. Slow to rent . Slow to rehab. It should be noted this was NOT how it was when I started w this guy. Maybe he is more overwhelmed??
4. I do not trust his repair people and he will specifically not let me speak w them.
In contrast the new guy has an online software system that allows me access to see rents as they come in, run reports, has leases etfc uploaded and has all communications w tenants noted, has an office with staff and have 9-10 people on staff. They personally take emergency calls 24-7. All calls are logged. I met the repair people and I am free to talk to themm on repairs if I want AND they talk to me upfront about all repairs with a PRICE for my approval. Plus I can use my own contractors which they will manage. Monies go out automaticaly on certain dates, late notices go out on certain dates, they have a very good relationship w section 8,. they enforce the leases and have a guarantee . if they have to evict they will refund my 'placement fee' and they are 2% less per month..
Also with the current property manager, repairs costs were high and it appeared he was 'fixiing something' every month. I recall it being 'curious' that when I did hte switch the last time the need for repairs stopped and how mmuch can need fixing in a house. these are small 1000 square feet homes? It made me feel repairs were 'made up' and added to the bill .
Again this was not how it started w that guy.
So concerns w the first guy were
1. ability to rent
It appears I wil have improvement in all of those. I need these homes STABLE.
Started an eating and working out plan . want to lose 20# in these next 8-10 weeks. gained weight getting my primary residence back from the bank and then again recently.
and looking to find ways to be more relaxed, less stressed and have more thing I enjoy
Really if I can hang on this job (or a similar job) an get these properties under control I just need to follow my monthly goals and I will reach my June 2018 main goals.
Primary home refinance still in progress. LOTS more docs this year.
And got reassigned at work to the largest account they have.. with a project that will go past 1/16/16 so feeling like if I lead this project is pretty much guarantees my renewal for another year or at least 6 months. I will ask for that in November
Worked 141 hours these past 2 weeks. Crazy.. good money but not what I want long term. I may get a Nordic Track ifit treadmill w some of the money. that or they have one of those training bikes w ifit with incline and decline.. both are approx $1500
I feel I am getting out of shape!
Anyway.. CLOSED on 6 homes. had to borrow from my emergency fund approx $2000.. will pay that off next month
I TOTALLY own these 6 homes now. no mortgage
IF homes run well I should be able to pull $3500 from the homes and will not have put in $1000 a month anymore towards covering the monhtly payment. so total NET increase to me per month $4500 ($1000 saving and $3500 new income).. basically ALL will be saved and invested to reach my 6/2018 goal
2 homes vacant. One we have an excellent long term tenant for and are fixing up. this is the home the 15 year tenant moved out of.
One has been vacant for almost 3 months.. 4 weeks I got rent for.. and the rest is a total loss.
Met with other property manager.. looks real good.. will post for input here and have asked some other folks
Thinking of for sure switching over the vacant house to him immediately w the rest to follow..
Made a mistake switching last time so want to be real sure but how can I lose? this guy is letting this house sit and has not sense of urgency.. other stuff too. will update later.
Current property manager does not appear to have time to show the house timely, and marketing is not getting what we need. I asked several folks what they thought of the vacant house. and they looked at it and were surprised our starting rent was so low and that it had not rented... even providing comps they owned near by with renters.
I contracted w a real estate attorney to appeal the real estate tax assessments across all my homes (my personal one too) .. cost 33% contingency of the 1 year reduction amount.
I currently pay $20k across 6 homes and 3 units and $10k for my own home. I am hoping for a $3k or more decrease. Never did this so do not know. What I think is good is that we just recorded SUPER low sales prices across the 6 homes w the title transfer..
Anyway. IF 3 units were also paid off I would make $6200 NET a month (this includes escrows for tax, maintenance, vacancy etc) . so I am $1800 off my goal of $8000 NET by 6/2018. Will continue to work on that.
I am CHANGING my June 2018 goal from 'having my own home and having it paid off' to 'having my own home and only owing $100k on it'. I do not feel I want to use my money to payoff the home totally right now.. $100k or less owed is fine..
Still waiting to hear on primary home refinance.
Onward. and looking forward to when hours lower (45-50 is fine but 70+) is 'soul sapping' so I can concentrate on Me, health , happiness and MORe to life than finance and work!
Also saw Dad yesterday. though he is happier at Silverado and cared for better. he is weaker and really not sure how much time we have. I am spending as much time as I can w him. This weekend I showed him the yard and he could not make it around the house (walking) on his own.
6 homes closing update
set for Saturday at 10am
Payoff so far is $1000 less than expected. so will use that to build back the emergency fund (took some money out to close)
Meeting with other potential property manager tomorrow and will post info to get thoughts from the group
REALLY frustrated with the slow renting of this one house, slow on repairs and all that basically boils down to security of rent and smoothness of house management. Trust!
Anyway. more news soon
I decided that I am ok to to have the mortgage be below $100k and I do not need it fully paid off to 'retire' or be financially independent and feel I do not have to work so hard. My house is $520 k or more. really why do I want this house anyway. I may want to move and I am ok w that. I do not ahve to stay here forever. . house is nice and has a nice SUPER mega yard which I like but really do I need that when I get older??
Dad is 76 and I am still traumatized seeing him decline so fast.. average stay at Silverado is 2 years (I got told that this week.. big shocker) which means on the average people pass away in that time period. Dad is 76 and she said that was 'young' and young people w alzheimers decline faster.. GULP!
So considering a super short timespan. where do I invest Dad's money. bonds, just get a 1.25% saving account.. stocks? I can not afford to lose alot of it. any 'safe' 5% investments out there.
Waiting for refinance news.. locked at 3.25.
Our big go live is this week but we had to cut it down so much we are now doing phase 1 and 2 so still expecting to work over 40 hours a week after thsi but just not 68-70 hrs until phase 2. I get overtime at the straight rate for hours over 40 and trying to bank as much as I can
Gift came through
I am paying off the 6 homes this week. Already sent the $120k check in and will 'close' Saturday so I get deeds etc. I have to come up with approx $10k and am doing that by cutting into the personal emergency fund a bit (I will owe that fund $2k) next month and using some of this crazy money I am making lately.
Very thankful and excited and also feeling even more like I have to get these 6 homes under control. This is a big part of my future
Got references from new property manager and need to call them
We are right before 'Go Live' at work and yesterday I worked (non stop) from 7am to 11:30pm. did not leave the house. VERY long hours and hard to do much of anything else. all of htat is crazy tense fighting issues and trying to 'save the go live' or long executive decision calls
Anyway.. happy grateful. WOW.. sortof shocked.
Now got to continue savings (all I can) investing well and paying off other debt. If I can get up $68k I can pay off the 3 units of JUne 2018. My plan is to do so.
My refinance on the house is progressing. appraisal Wed and mortgage guy is trying to close this month. That wil not cut my payment too much but will cut the term. This will be my last refinance (thank the Lord!)
I am hoping to get a few thousand back on the 'loan swap'. The reason is my prior loan required 6 months escrow. this one requires only 2-3. all of that will go towards principle.
Onward. got to start working.. crazy.
I believe this is coming through.
An aunt is liquidating some accounts and giving each of the 3 kids in my family (Ma is her twin). $200k. My brother is on hard times and this may have spurred the gift..
Anyway (if this comes through fully) we each got $80k so far... already put $80k into investments..I will put the rest, $120k, to payoff the 6 homes
To pay off the 6 homes I actually need approximately $130k, if paid off this month, so trying to figure that out and need to contact the seller and figure this out< he was escrowing tax so I may get some of that back.. figure payoff date etc.. trying to do this this month (before this dream come true disappears but waiting for final confirmation before getting TOO excited or making any contacts) . They are doing accountant/attorney talks right now.
So sharing tentatively right now.
Also have news on the property manager I met with and on the homes getting rented. will share later. Back to work. I worked 120 hours these past 2 weeks! good money but exhausting.. need a break.
Where I work though just bought another company and is on a hiring freeze through year end (also their fiscal year). My contract is up 1/6/16 so got to clarify my contract come October to try to get it renewed .. or go full time after year end
6 homes updates.. feeling stressed and trying to just get through it all.. Whatever God gives you to lift he gives you the grace to carry'
I STILL Do not feel I have the 6 homes under control
1. 1 house has been vacant for 8 weeks (but only missing rent for 4 weeks of that so far). Took 3-4 weeks to fix it up (too long. will remedy that next time), then spent 2 weeks at too high of rent and now 2 weeks at the realistic rent. .getting showings and good feedback but not rented yet. Upsetting and stressful. had long talk w property manager on it today
2. the section 8 house, forgetting if I mentioned it we were thinking we wwere going to pull it out of section 8 and then instead did all sorts of roof, water drainage work on it and left it in section 8 because the lady has lived there for so long and wanted to stay... well she UP AND LEFT. I found out from Section 8? not her. not the manager! He is going over there tonight to look at it but with her being in there for 13 years likely needs a full paint job and updating. ARGGH!! Manager says he talked to section 8 Tuesday to get it reinspected and no one said she moved out and she did not either. He talked to her Monday. Crazy
I have been having MORE AND MORE insane crazy totally unprofessional costly things happening w the section 8 folks .. Property manager says folks are getting out of section 8 and did not think it was bad to lose this house out of section 8 as rent was low (13 years in there) and the annual inspections and nonsense like this. craziness
Bottom line though is I am going into the month with TWO VACANCIES (1) already at 8 weeks and (1) likely to go at least 4 weeks as we have to do a rehab on it..
I am not prepared to spend more $ to rehab another home and am going to need to beat some bushes to find the money. or something. I am feeling severely money crunched. SEVERELY. with the landscaping (paid for) and the fence (money sitting waiting for completion)..I have been scratching around for money and cutting all costs already. hard to find or cut momre.
I speak with another local Property Manager Tuesday
and will speak to a local investor this weekend to for ideas to rent these faster... cut costs..
1. all the rest of the rent is in
2. the house that we did rehab looks good and rehab is paid for in full
3. I am working 65+ hours a week at work so getting extra money
4. still hoping to hear positive news on the gift to partially payoff the 6 homes
5. this too shall pass (hopefully onto better tiimes!)
6. fixing up this house will mark the 4th house rehabbed.. only 2 more to go after this and one of those looks pretty good
7. even though it is hard to fund these rehabs., if done right these are long term investments into the homes.
Sortof some random thoughts here
1. landscaping is DONE.. looks BEAUTIFUL.. love it well worth it. yard is more simplified much easier to maintain. no groundcover.. wonderful
2. fence. worked it out w the neighbor. I will put the 6 foot fence in FRONT of their chain link fence in all sections except one (where I own the fence). Fence guy is great says he can get with in 2 inches. FENCE is already funded (not reflected in #s to the left) and shoudl be installed Friday or Monday (takes 2 days though)
3. Toured 3 of my homes with the property manager today. starting to feel my homes are well taken care of.. still have deferred maintenance items that were not done but feeling GOOD and CALM.. like things are smoothing out. The house we rehabbed looks wonderful and we have someone who 'lookds good with good credit' very intersted and if they work out we will take it OUT of section 8 .. which long term may be good. Section 8 requires these yearly inspections which have been somewhat of a nightmare and even w the homes in better shape just the idea of having some inspector come through each year is not a good feeling. . We are checking income and other stuff on this lady today but FINGER CROSSED> I have one more home I want to take out of section 8 but the lady there has lived there for 13 years so we are just waiting her out.. no rush.
4. This year has been the hardest in terms of turn overs but good to be on the other side of that and good to feel I am on the downslope slide of major fix up work across all. Feeling I can just budget much of the rest like no urgent big money things pending and homes are looking good with is nice. For this year we have 2 more 3 unit renewals (at the big jump up rate) and then 1 more section 8 renewal outside of that.. no more big rent changes planned or in the works.. My goal righ tnow is to KEEP tenants and minimize expenses
Been researching other property managers and ways to minimize costs, how to track things, learning from others, went to the landlord meeting etc. . Mine manager charges 7%. This other guy (also in town) says he will charge me 5% ($2000 difference per year or more) and my initial indepth research says he may be able to do the same as my current guy and MORE and produce documentation which my guy is weak at..just investigating right now and checking references
I am also still doing the work to refinance the main home and reduce the rate/and maybe term.
Feeling BETTER. calmer. less panicky
Dad is doing MUCH better at Silverado.. shocking.. like it appears his mental status has IMPROVED (vs just not getting worse). He is mmore 'there' than he was. asking intelligent questions, participating..I am still merging accounts and getting access to all . some are in a trust which is requiring more documentation. Dad's house did sell
6 homes update.. 2 years 9 months to go until paid off in full.
Having inspections of homes done thsi week to uncover any major repairs needed so I can take care of those all this year and be done with it or at least save for them.
short term insurance lady moved out. House looks immaculate. No work needed. Already showing it and getting positive reviews. Trying to rent for $1200 ($235 less than her rent but she had a short term lease)
Section 8 (long term lady) moved out Friday. Section 8 paid rent already for the month. Unless they ask for it back which they normally do not, I can keep it. this house needs a rehab (tenant lived there for 8 years or more). So anticipating, paint, flooring, will udpate light fixtures, faucets as needed etc. Few thousand. Property manager looking at it today. Extra rent will help float me for the few weeks it will take to rehab
Another section 8 lady (lived there 20 years) may move out.. fingers crossed she does not but may because house is getting too big for her. If she does we can anticipate the same as above.. fully rehab/update.
I am complete trimming ALL trees among all the homes and 3 units. Trying to do long term maintenance type things and keep these in good shape.
I never had the 6 homes I have properly inspected before purchase and long timers on my blog know that that was a mistake. I do not like the uncertainty and not being in the know so I am going to get them inspected now. I got a few referrals so calling and getting someone good to walk through then inside and out and point out any major issues. Not sure of cost yet but I feel it will be worth it.
These are long term cash flow properties so need them SOLID.
Property manager and I are thinking of pulling another home out of section 8.
I may be coming into a $10k bonus so if so will devote that into making these homes 'solid'... some may be fine already.
Still saving as much as I can and having less stress w the homes but having an inspector guy to review the homes will be helpful
also attend the landlord meetings next week
Just musing here.
Dad has made me realize or struck home that life is REALLY short. Seeing him confused is VERY SCARY and makes me want to make the best use of my time and to watch my health what I eat, drink etc.
I do not want to waste time with things I do not want anymore or 'settle'. So re thinking some things in my life.
The drama w the homes and 3 units is leaving me which is nice. No dramatic updates. Moved in those 2 folks. Got 4 renewals on the 3 units.. 2 more for the Fall at the much higher rent and we are not concerned. NO MAJOR work needed immediately. I could re-side the place but no need too. I just did a major tree trimming.
City inspection is quoted and funded.
Laundry money is UP
1. short term lady moving out next Thursday. We start showing Monday and have 6 possibles lined up to see it. Hoping it rents soon.
2. Property manager is now a preferred vendor with that local insurance company with people in need of short term housing due to fires etc. He just filled one of his other homes at a $500 premium. Mine was not available yet but bodes well for the future that we may be able to do that again
3. other long term lady SHOULD be moving out end of this month. hopefully she is but my guess is maybe not. that house needs the rehab (not quoted)
4. everyone else is fine. I have section 8 inspections on the 4 homes every year and they are not fun. Inspectors appear to want to find something every time. I may look to remove other homes from the program. Others are doing so and Section 8 housing is hard to find. I am tracking how much they cost each year
5. repairs in general are down across the homes .. like break/fix repairs which means the proactive approach has worked
6. got to do some landscape work on 1 home but really feeling fairly in control
I am now forecasting that even with all the repairs I will end the year with $15k in that account and am holding onto $8k to fund forecasted repairs outside of the $15k
Job is fine..working 50-55 hours. LOTS of money but tiring
I need and now have a goal to find HOBBIES, interests, friends outside of real estate and my not for profit
I am in general unsatisfied w my life and want to be happy. No reason to wait to do that until the homes are paid off. I am seeing someone and am in general not satisfied w that too or just stressed or both. I will make some decisions on that in the next few months.
I am trying to get my arms around Dad's finances. He has much more than I had thought and all (ALL) of it is in cash accounts. I want to speak to someone to hep me consolidate and put that into safe interest bearing accounts.He will have about $1MM total cash after the house. any thoughts for advisers or what to do w the money? Plan was to keep a year worth of costs out of the market and invest the rest??
Also house should sell and close in these next 3-4 weeks..
he is not doing super awesome. VERY confused. Very bad. Last week he got into his car and got lost for 4 hours and was found by a good samaritan and driven back. We took away the car and he has an eval next week to see what stage of dementia/alzhemiers he is in. He is NOt happy at the assisted living place and I am not sure how to act. Is he not happy because he thinks he is on an airforce base being forced to re-enlist or am I holding him against his will in a place he does not want to be at? Do I act for his safety or his happiness and he is so confused not sure what to do
He says 'he hates himself, hates his life, wonders if I hate him and he wants to kill himself'
We got the 2nd renewal at the 3 units. so so far 4 units turned over to $600 (out of 6).. 2 left to go . There leases are up September and November.. 3 units are STABILIZING.. yay
and got folks waiting to see the house that is vacating by that short term insurance lady. We charged the insurance company $1435 but market is more like $1200 so getting a rent decrease there on a 1 year lease.
Still putting a good amount of money in savings..$20k so far for the year not including the 401k
Expecting $14000 of fix up costs this year on the homes/3 units. Got $8000 towards that with only $6k left to find/earn/make up. This math will keep me at $15k emergency fund by end of year which is my goal
I was thinking of taking out the $15k rental fund from my networth calculation. what do you guys think?I really will not use it for anything but real estate . and need it that high for the first few years to fix these up. weather changes..maybe just in general ALWAYS keeping $15k
Two houses move outs at the end of the month. Already showing one... and have fix up work on the other so will have to fix up/rehab first and then show (more downtime)
So far. got 3 units turned over or re-leased at the 3 units (6 total units).. All at $600 ..all look good. I also raised the security to $900. NO current vacancies. Waiting for this one guy to get out or re--sign his lease at $600 for June 1 and then got 2 more who renew in a few months. So after these homes and this guy and this fix up work. things should quiet down.
Overall happy w the rental property manager change but want to fine tune it. These homes are long term. need to hone my process and relationships to lower stress and tighten things up.
Dad gave me his guns. selling for $2000 approx (on consignment) that will go towards the rental fix up.
INVESTMENTS. how do you guys allocate? I have been reading up on this and thinking about doing an investment policy statement with my long term goals and strategy. . currently thinking.
10 % bond
15 % international
75% aggressive stock fund
All at Vanguard.
What are your thoughts. Thanks
Still plan to refinance the house in August to a 15 year loan with closer to a 3% rate. currently at 5.35. This will not change my payment significantly. possibly raise it probably $300 a month.
Just diarying the journey today and should do that more often.
1. work still fine, working 50 hours a week, making more than I ever did, raised 401k to 19% from me (and get a 3% match credited at the end of the year)-SPEECH CAME BACK!! yay.
2. doing a roof and turning over a house this month (roof is $3500. house is getting quoted)..
3. 2 tenants moving out end of May... one is long term and house requires updating. one house we should be able to clean and turn over quickly
4. 3 unit "turning over bad tenants/raising rents effort" is progressing but definitely more stressful than I had thought but still on track., We DID go down in rents from our projected $630 across all units to $600 across all units. Still hoping to have the bulk of this smoothed out at the end of May
5. projecting $17,600 worth of long term improvements this year between my house and the homes and 3 units. I will have to take $7600 out of the rental emergency fund to fund that and them replace that by end of year
6. still trying to save every month. $12k saved since the start of the year NOT including 401k
7. $28k increase in investments since start of year (with appreciation and new cash put in).. goal was $35k. Raising goal to $50k for the year
8. Dad is moving in to assisted lviing tomorrow .. 5 minutes from the house. big life change for him and me.. adding stress
9. lost wallet and 6 homes check last week (caused lots of stress.. ) almost had to replace the 6 homes check ($5100)but got it worked out.
10. still planning to refinance the house to a 15 year loan in August. I am currently on a 30 year loan paying almost 5.3.. rate should drop to 3.15 or something
2 years 9 months til 6 homes paid off but hoping for an easier year next year as we raise rents and take care of finalizing the bulk of the long term improvements this year.
Have not had ANY time to work on coming up with an extra $119k to pay off the homes at the end of this year but have 2 friends doing fix and flips. t hey are newbies but are estimating making $40-60k each.. being newbies maybe it will be much less but still interesting
We will see how it goes but I have friends who are NOT newbies, more experts, who do them and DO make that amount. I need access to cash (not my own) and TIME to THINK and RELAX (has been in super short supply lately)
Been out for a while.. LOTS going on w Dad.. a little down. my speech (stutter) has taken a major turn for the worse.. and working on other stuff.
Anyway.. a good accountant is worth their weight in gold.
Worked with accountant (took some time) as this year was A LOT (lost the 2 flat, and refinanced my house twice after buying it in a hard money deal) and got a great refund coming.
Anyway.. refund $13,568. Crazy!
$4500 goes to the Roth IRA
$1000 wil go to regular investments (taxable)
Much (if not all) of the rest will fund this years 6 homes/3 units improvements.
We are working on tenants for both the 3 units places and will firm up tomorrow likely.. the 2nd person we were tossing moved on her own. Both have tentative move in dates of May 1 once signed.
Hopefully no vacancies there in a while! (but still have 2 more rents to raise)
Expecting the S8 lady to move out end of May .. along w the short term lease lady. so will have to fill 2 homes this year. Section 8 people generally stay a long time so when this one moves (7 year tenant) we have some updating to do and then hopefully can get another long term tenant. We took the short term lease lady because her lease bridged the gap between a bad time of year (winter) to early spring setting us up to re-rent it well to a longer term person. Also she paid like $300 more a month.
this is a BIG year for turnover though! Costly
and all the same time of year.
Hopefully next year will be much less.
My rent increase with section 8 went through and all it took was an email, call and filing out a form. WOW. got almost a $200 increase on a long term tenant.
Getting lots of good showings on our vacant apartment and other person we are tossing did not qualify for enough disability so expecting her to leave shortly.. Both will go up to $650 so so far on the 3 units I will have raised the rents $205/month . and the 6 homes $186 a month since the start of the year. hoping for more .. I WILL likely take a cut when that short term lease lady moves out so can not count yearly totals til we are at the end of year. Goal was to raise rents $400 across the board across all units. I want to exceed that and stay within the maintenance budget. note: rehab and roof money does not come from my maintenance budget it comes from the rental long term/or emergency fund.. so that will need to be either built up now or replenished later so I end the year at $15k
In other news.
car paid off!
and another $350 towards investments today and managed to vacation for 6 days with no noticeable decrease ins savings.
and set up $50 Vanguard auto invest per month (difference in car insurance w dropping the Tahoe)
facing some big costs though
1. city inspection on the 3 units.. estimate a few thousand (new code rules regarding water heaters and furnaces across ALL units)
2. remainder of the city inspection on 2 homes. minor outdoor work
3. roof on one house
4. turn over one house that has a long term tenant. estimating at least 4k?
But as I turn over these long term tenants the homes are getting updated so the 'update/rehab the whole house' is not yearly expense. (thank the lord)
unit that was vacated looks fantastic. We will do a quick clean and re-rent. listing it for the weekend
I am going to a local landlord meeting April 14.. meet people and learn. I am looking forward
and finally seeing the 6 homes/3 units for what they were . a good deal but not a 'turnkey' situation more a deal where the sellers were sortof 'done' and rents were lower, management was 'ok' and the places needed some fix up.
I went into it thinking 'oh this will be relatively turn key'
Anyway glad I had the money to fix them up and hang in there through the turnovers (JUST starting on the 3 units this year) and the lack of rent.
I feel very good though that this was a good long term buy and feel I have 'turned the corner' and it is getting easier and easier and smoother and smoother.. and really when I am done I will be in a better position then had I not done the rentals and just 'saved' and actually even better then if I had kept the OLD rentals that I lost in foreclosure(those I paid too much for it. Only thing I wish was I had not used up my IRAs in the past..
that is the past. looking forward to the future
and just did the FIRE calculator thing and with a conservative estimate of savings $100k and my rentals paid off (4/2019 for ALL of them) I have no lines going to zero!
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