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Archive for January, 2012

New Financial Normal

January 22nd, 2012 at 11:29 am

A lot going on right now, I'm writing to just organize my life.

On the property side of life...

BB has returned from California. The job remodeling ended up being way bigger than we anticipated. New paint, flooring went down in every room, the heating was replaced, new faucets, light fixtures and then cleaning every surface.

I have not yet organized the receipts to get an idea of the cost of this trip. Including airfare, car rental, food, I am guessing in the $7-9k range.

BB and our friend spent about 8 days working on the condo getting it ready to list. They had 2 full days to play. They enjoyed the Haight Ashbury area of San Francisco but really loved the Redwood forest.

So the property went on the market a few days ago. Yesterday there was an open house and I am told 9 couples came out to view it.

I've got a few more papers to sign, send back and then that place will be off my priority list and fully in the Realtors hands.

Rentals...

We close on the Chocolate house Monday. The lawyer found a problem with the title and the bank needed a few days to get that cleared up.

BB has lined up a few contractors to make repairs, updates next week and we are hoping it will be ready to rent by the end of the week.

Renters move into the upstairs unit of my other rental in February. January was a tough month to go without renters, but I have learned to show the units after they are vacant. Showing while the old renters are still occupying the unit hoping for a seamless transition does not work for me. The unit is generally filled with dirt, chaos and does not show very well. So I wait till the old renters move out, clean it up and show it. This means a few weeks of vacancy, but saves me the hassle of giving 24 hr notice to the renter, and then showing it 10+ times. When it's vacant, it rents easily. This time I only had to show it 3x.

Personally...

When BB returned from CA his back was really in pain. We went to FL to see his back Dr to get injections to reduce swelling. BB is feeling better now. But he still cant do much around the house.

We are waiting on Cobra paperwork to fill out for his health insurance. I think the old insurance ran out in early Jan, and we need Cobra to cover these injections. On Monday, BB will call to see where the paperwork is.

I ran the numbers last night to get a sense of our 2012 income verses 2011 income (when BB was employed). We are short about $2400.00/month even if we count the full $3k of new rental income.

There are a lot of variables that changed besides losing BB salary. He recieved bonuses a lot which averaged to about $1k a month. Our health care was free. His employer matched 10% retirement contributions.

We were collecting rent from the CA property as well. The property that is now up for sale.

But on the flip side...selling the CA property...I plan to pay off my primary house mortgage, HELOC and CC bills, reducing my expenses about $2k a month.

And once those are paid off, I want to refinance our mortgage on our first house from a 5.5% rate to maybe a 4% or whatever I can get. That will reduce the mortgage by maybe $100.

So although we are losing a significant income with BB job loss, we can still pay our fixed monthly expenses. I am anxious to get everything settled so we can get a feel for our new financial normal.

Rental Updates

January 1st, 2012 at 10:40 pm

So..the big news is that it appears we are buying the Chocolate House. We are taking the plunge and BB is going into a real estate career pretty heavily.

The last post stated that we had countered the banks counter offer by increasing our 1st counter offer by $1k.

The bank accepted!

I think we had a good negotiating hand because we made the first offer a few days before Christmas, and we negotiated through until we had an accepted offer about 2 days after christmas.

We didnt plan it that way, but we knew we had a strong hand because people are not looking at properties during the holidays, so it was unlikely there were any other showings around the time we submitted our offer.

On top of that, it rained for 2 days over christmas and we were able to make sure our realtor indicated to the banks realtor that there are water marks on the ceiling from the roof. We already knew the roof needed attention and built that into our offer, but since it was raining during negotiations, we reminded the bank that there are more water marks growing by the day! (There are not really, but the bank doesnt know that.)

So it was lucky timing for us.

We close in a few weeks, whenever the bank is ready, we'll be ready. We offered a 10 day closing, but have heard the bank wont be ready in time. Works for us.

So far we have had the pest guy out there, no termite damage.

A roofer is coming out in the next 2 days to give us an estimate.

The Air/HVAC is being inspected tomorrow.

The home inspection is scheduled for Wednesday.

The electricity and water was just turned on. BB and I did a walk through to see what is needed to get it renter ready.

The place is missing a lot of ligh bulbs, faceplates and some broken windows. One floor washer/dryer needs to be replaced, and a faucet downstairs. And several rooms need to be repainted.

When everything is done, I'll post pictures!

There is a local private college in town that fills most of the city rentals. We are hoping to rent each unit to the students. I doubt many students are looking to rent in February, but I think we'll get it rented to someone pretty quickly.

In other news, the tenants moved out of the upstairs unit of our original duplex (my Heart House). I'm not sure when they moved because when I went by this morning it was vacant. They never called to say they were going.

So BB and I worked for 3 hrs today cleaning the unit. It took longer than expected, and we did an inventory of some biig expenses coming in the next few yrs. But for now, we just needed to get a new stove and kitchen light. We ordered a stove for $360 and it will be in on Saturday. I picked out a pretty brushed nickle light for $130 to replace the pretty gross flourecent light.

I listed the place on craigslist today.

I saw the downstairs tenant (2 single guys) and they have requested pretty girls for the upstairs. I told them they have a 50/50 shot!

I hope the calls come soon!

Goals?...but I have been focusing on plans

January 1st, 2012 at 12:55 pm

Well 2012 seems to be here and my life did not get sorted out before it arrived. So I'm going to set some goals, though I feel like my life is still unpredictable and might head in wild directions.

Goal 0: Implement CA plan. This is to sell CA, pay off our primary mortgage, CCs, HELOC, lawyer, and find a safe place for the remaining money to rest.

Goal 0A: Get a lawyer to draw up paperwork sorting my inheritance from BB's financial contributions. My inheritance is my money unless I mingle it, which I have by putting so much into real estate, and BB has agreed that we should seperate it on paper to put my mind at ease.

Goal 1: build up a $5k emergency fund for each property we own.

Goal 2: by May 2012, go back to saving $200 month for a replacement BB car.

Goal 3: Start horse riding again.

Goal 4: Start a ROTH IRA for BB so he can save for retirement.

I guess those are my goals. My head is mostly filled with plans and it's hard for me to separate the two, though I do think it is important to create both plans and goals.

I try to look down the road and envision what I want next Christmas to look like, but it's so fuzzy. I'm still wrapping my head around the changes going on. BB retiring from baseball and going head on into a real estate investment career.

But that means good things are on the horizon. BB has found another career hes really passionate about. We just need to do it right.