I hate having to rely on other people in this industry. It seems I either find the incompetent/slow ones or the industry is chalk-full of them. I called the mortgage rep a week ago this past Tuesday to get a loan package. This past Tuesday, I called him as I hadn't received it yet. He said all those things get routed through the main office, but I should be getting it "any day" now. He said to call him back in a couple of days if I still haven't gotten it. Today, I realized I still hadn't gotten it, so I called him back and he just couldn't understand why I hadn't gotten it yet. I told him if he could overnight another one to me as the contract's been signed and the clock is ticking now, and he said they don't have the means to do it. Huh?!?! Hello, this is 2007 - not 1950. I then asked if there was someone at the main office I could talk to to expedite the process, and he said "not really", but that he "would try to get the matter resolved". I told him to call me back ASAP today with an answer. If I don;t hear from him today, I think I'll just talk to someone at the main office directly, or, better yet, go with another lender altogether (even though the rates are attractive).
Update: My wife called me in the afternoon and said the loan package had arrived. Finally.
On a semi-happier note, I got hold of an inspection company local to the property, which the agent highly recommended. I talked to a very pleasant lady there, who started asking me questions I had no idea what the answers were. She said she'd talk to my agent directly and get back to me. She called several minutes later and said she couldn't get hold of her, but left her a message. She said once she gets the answers from the agent, she'll call me back to tell me "what I'm looking at" in regards to the inspection.
Friday, September 28, 2007
Tuesday, September 25, 2007
4-Plex: Contract Sent
I faxed over the contract and a copy of the EMD check to the agent for the 4-plex this morning. I also FedEx'd the signed originals of all the paperwork she sent, so it looks like the deal is bona fide now. My wife said after the fact that she wanted to be included on the contract (i.e., be on the deed), so I'll need to have a contract addendum (or whatever the agent wants) sent.
Here are the numbers for the deal:
Here are the numbers for the deal:
"A" "B" "C"Column "A" is the hard numbers financial statement, which has realistic values for each income and expense for the property. Column "B" is what the financial statement would realistically look like on a given month without averaging out extraneous expenses. Column "C" is using the "50% rule" (that is, take 50% of the gross rents and use that as the NOI). So the worst case scenario, Column "C", has my average net monthly profit at $373/mo., which is one of the reasons I've been pursuing this deal.
Income
Gross Potential Rent: $ 1,250 $ 1,250 $ 1,250
Vacancy Loss: $ 104- $ 0
Gross Potential Income: $ 1,146 $ 1,250
Operating Expenses
Property Management $ 200- $ 200-
Maintenance $ 100- $ 0
Electric $ 0 $ 0
Water $ 0 $ 0
Gas $ 0 $ 0
Insurance $ 54- $ 0
Property Taxes $ 35- $ 0
Other Reserves $ 75- $ 0
Gross Operating Expenses $ 465- $ 200-
Net Operating Income $ 681 $ 1,050 $ 625
Loan #1 Payment: $ 179- $ 179- $ 179-
Loan #2 Payment: $ 73- $ 73- $ 73-
Total Debt Service: $ 252- $ 252- $ 252-
Monthly Net Profit: $ 430 $ 798 $ 373
Tuesday, September 18, 2007
4-Plex
Looks like the 4-plex is going to happen - at least, I'll get the ball rolling for the deal. The agent has been sending me emails left and right the last few days, asking what my plans are. I finally had a few minutes today to call the lender I talked to several months ago. Surprisingly, the guy remembered me. He said they have two loans that would fit my needs:
5/5 @6.99%
10/1 @7.49%
Both have the same closing cost amount, $700, and are amortized for 30 years. I'm just wondering which would be better for my needs. Unfortunately, he can only send the loan packet via snail mail, which will add more delay to the whole process. As it is, I won't be able to get the contract and EMD out until tomorrow at the earliest.
5/5 @6.99%
10/1 @7.49%
Both have the same closing cost amount, $700, and are amortized for 30 years. I'm just wondering which would be better for my needs. Unfortunately, he can only send the loan packet via snail mail, which will add more delay to the whole process. As it is, I won't be able to get the contract and EMD out until tomorrow at the earliest.
Monday, September 10, 2007
New Blog and 4plex
New Blog
In order to not mingle my two activities - REI and business building - I decided to spin-off another blog for my business building ventures. It is called My Venture Into The B-Quadrant. I already have a couple of posts up.
4-plex
I had a few discussions with my wife over the weekend about the 4-plex located out-of-state. She is vehemently against buying it even though it cash flos out-of-the-box. I have to agree with her in the fact that it's located so far away (even though I have a PM already lined up). Before leaving for work this am, however, I asked her one last time about it and she seems to have changed course - slightly. She now wants to talk about it more (rather than not wanting anything to do with it before). My last correspondence with the agent was her wanting me to send a signed contract and a $1,000 EMD. If I send her a signed contract, though, I doubt I'll be fronting $1k for EMD.
In order to not mingle my two activities - REI and business building - I decided to spin-off another blog for my business building ventures. It is called My Venture Into The B-Quadrant. I already have a couple of posts up.
4-plex
I had a few discussions with my wife over the weekend about the 4-plex located out-of-state. She is vehemently against buying it even though it cash flos out-of-the-box. I have to agree with her in the fact that it's located so far away (even though I have a PM already lined up). Before leaving for work this am, however, I asked her one last time about it and she seems to have changed course - slightly. She now wants to talk about it more (rather than not wanting anything to do with it before). My last correspondence with the agent was her wanting me to send a signed contract and a $1,000 EMD. If I send her a signed contract, though, I doubt I'll be fronting $1k for EMD.
Tuesday, September 04, 2007
House #1 Update and Brainstorming
House #1
As I mentioned ever-so-briefly in my last post, I managed to get House #1 rented, but not without some stress beforehand. The tenant took forever in getting me the application back, but I still managed to run through the app and call her previous landlord, her work, and a couple of references. With the delay, I totally forgot about the utilities. I never had an account with the gas company, so I told the tenant late Thursday (when I told her she was accepted) that she would have to call the gas company ASAP to get the gas turned on. I told her I doubt they'd have it on Friday, so she would be without gas (i.e., hot water, stove) through the weekend. She didn't seem to have a problem with it. The electric company was straightened out, too. I sent the transfer paperwork for the water company this am, and need to call the sewer company at lunch (the sewer and water company will prorate service, so I'm not too worried).
I went over the lease itself, utilities, rules, etc., with the tenant on Saturday. They gave me the rent and security deposit in the form of a cashier's check, and I went to my credit union to deposit them. They wouldn't deposit them since the date was set for Sep 4th. Huh?!?! I thought cashier's checks were different in that they "withdraw" the funds when it is made out, but I guess not. So I went across the street to the bank that issued the check and they cashed it for me. I then went back to the credit union and deposited the cash.The tenant's bank said the tenant got the checks that morning, and since it was a Saturday, they put the NEXT business date on the checks. Needless to say, I wasn't too happy with my credit union.
Brainstorming
I managed to actually sit down and brainstorm some business ideas this weekend. I never had complete isolation, but I still managed to come up with some ideas that could end up bringing in some more income. All-in-all I have a total of 13 ideas now. The thing I need to do is prioritize them, so I concentrate my effort on the "best" one, and then start the ball rolling. I also found my locale SCORE chapter, who can hopefully help me in my endeavor(s). I just need more time to get things organized. :-(
As I mentioned ever-so-briefly in my last post, I managed to get House #1 rented, but not without some stress beforehand. The tenant took forever in getting me the application back, but I still managed to run through the app and call her previous landlord, her work, and a couple of references. With the delay, I totally forgot about the utilities. I never had an account with the gas company, so I told the tenant late Thursday (when I told her she was accepted) that she would have to call the gas company ASAP to get the gas turned on. I told her I doubt they'd have it on Friday, so she would be without gas (i.e., hot water, stove) through the weekend. She didn't seem to have a problem with it. The electric company was straightened out, too. I sent the transfer paperwork for the water company this am, and need to call the sewer company at lunch (the sewer and water company will prorate service, so I'm not too worried).
I went over the lease itself, utilities, rules, etc., with the tenant on Saturday. They gave me the rent and security deposit in the form of a cashier's check, and I went to my credit union to deposit them. They wouldn't deposit them since the date was set for Sep 4th. Huh?!?! I thought cashier's checks were different in that they "withdraw" the funds when it is made out, but I guess not. So I went across the street to the bank that issued the check and they cashed it for me. I then went back to the credit union and deposited the cash.The tenant's bank said the tenant got the checks that morning, and since it was a Saturday, they put the NEXT business date on the checks. Needless to say, I wasn't too happy with my credit union.
Brainstorming
I managed to actually sit down and brainstorm some business ideas this weekend. I never had complete isolation, but I still managed to come up with some ideas that could end up bringing in some more income. All-in-all I have a total of 13 ideas now. The thing I need to do is prioritize them, so I concentrate my effort on the "best" one, and then start the ball rolling. I also found my locale SCORE chapter, who can hopefully help me in my endeavor(s). I just need more time to get things organized. :-(
Sunday, September 02, 2007
House #1: Rented
I went ahead and got a tenant in for House #1. I'll provide some details later, but needless to say it is no longer on the market (for sale or rent).
Wednesday, August 29, 2007
4-Plex Counter Offer and Potential Tenant for House #1
4-Plex Counter Offer
Even though I thought the 4-plex deal was dead and buried, I guess I should have at least expected a counter offer to my original offer (see previous post). The owner countered the terms on the 2nd (owner carry) loan, which tells me right of the bat that he is motivated in unloading the property as he said he would be hardpressed to use owner financing at all on this deal. Here is what his counter offer says (verbatim):
"Both parties are each paying their own fees/costs of any kind. Have seller take remaining 20% (*1) in form of 2nd position lien with interest rate of 7% amortized for 5 years with a balloon due no sooner than 30 months. Payments (*2). Also if Buyer's property sells on or before closing, Seller wants (*3) CASH.(*4) Property is being sold as-is where-is with all improvements Buyer (*5) has already done.
1, 2, and 3. I left out the dollar figures.
4. This clause needs some explaining ... When I sent the offer to the agent, I explained to her that I had hoped one of my other investment properties (i.e., House #1) would have sold, which would have meant me having funds for the other 20% of the purchase and closing costs. What the Seller is saying is that if my property DOES sell on or before we close on the 4-plex, I am to give him the 20% in cash.
5. I think the agent meant "Seller" here, not "Buyer".
The agent (or Seller or Both) must also be using a different amortization calculator than any I've seen. When I plug in the principle amount (*1), interest rate (7%), and term (5 years), I get a figure about $12/mo HIGHER than they quoted (*2). I'd definately have to get that straightened out before agreeing to anything. As it is, it's about twice what I was willing to pay each month for the 2nd loan. It's not a deal killer, but I need to crunch my numbers again to see if it works.
I'm also still waiting on the pictures I requested late last week.
House #1 Tenant
Well, here it is almost 4:00pm and I still haven't received anything from the lady wanting to rent the house. She promised she'd fax me the lease application first thing this morning, but not only have I not gotten a fax, but I've also not heard from her at all, which worries me a little. My wife made a comment to me at lunch today that her procrastination in getting me the lease app may be a sign of how things would evolve when trying to get the rent check. I have to agree. I may just call the lady back and tell her "sorry".
Even though I thought the 4-plex deal was dead and buried, I guess I should have at least expected a counter offer to my original offer (see previous post). The owner countered the terms on the 2nd (owner carry) loan, which tells me right of the bat that he is motivated in unloading the property as he said he would be hardpressed to use owner financing at all on this deal. Here is what his counter offer says (verbatim):
"Both parties are each paying their own fees/costs of any kind. Have seller take remaining 20% (*1) in form of 2nd position lien with interest rate of 7% amortized for 5 years with a balloon due no sooner than 30 months. Payments (*2). Also if Buyer's property sells on or before closing, Seller wants (*3) CASH.(*4) Property is being sold as-is where-is with all improvements Buyer (*5) has already done.
1, 2, and 3. I left out the dollar figures.
4. This clause needs some explaining ... When I sent the offer to the agent, I explained to her that I had hoped one of my other investment properties (i.e., House #1) would have sold, which would have meant me having funds for the other 20% of the purchase and closing costs. What the Seller is saying is that if my property DOES sell on or before we close on the 4-plex, I am to give him the 20% in cash.
5. I think the agent meant "Seller" here, not "Buyer".
The agent (or Seller or Both) must also be using a different amortization calculator than any I've seen. When I plug in the principle amount (*1), interest rate (7%), and term (5 years), I get a figure about $12/mo HIGHER than they quoted (*2). I'd definately have to get that straightened out before agreeing to anything. As it is, it's about twice what I was willing to pay each month for the 2nd loan. It's not a deal killer, but I need to crunch my numbers again to see if it works.
I'm also still waiting on the pictures I requested late last week.
House #1 Tenant
Well, here it is almost 4:00pm and I still haven't received anything from the lady wanting to rent the house. She promised she'd fax me the lease application first thing this morning, but not only have I not gotten a fax, but I've also not heard from her at all, which worries me a little. My wife made a comment to me at lunch today that her procrastination in getting me the lease app may be a sign of how things would evolve when trying to get the rent check. I have to agree. I may just call the lady back and tell her "sorry".
Tuesday, August 28, 2007
Some Updates
House #1
The last I heard from the potential renter was last Friday with an email that said a family member had to go to the hospital. She sent the email using an account that had a different name than her - possibly a friend? Anyway, I responded back (last Friday) that she could fax me the completed lease application that day before 4pm or we could meet at the property over the weekend so she could give it to me. I didn't get a fax on Friday nor did I hear from her over the weekend. I was going to call her yesterday, but got tied-up all day at work. The only number I have for her is her work number and they had closed by the time I could call. Today I was again busy in the morning, but set aside some time to call her this afternoon. I asked her if she was still interested in the place since I hadn't heard back from her. She apologized profusely and said she has been busy packing and going to the hospital to visit her family member, but that she was still interested and would fax me the completed app first thing the following morning. She said her current lease expires this Friday and she will need to be moved out by then. I told her the quicker I get the app, the quicker I can get back with her on a decision. We'll see.
4-Plex
This isn't going so well. The more I think about this property, the more I'm questioning if the $300/mo+ CF is worth me jumping into a property that may be headaches down the road. You may recall my talk with the Seller last week in which he said it still needs some work done, including "running a new electric cable to the street" (which he got a bid of $900 to do), among other things. My wife is also totally against it, and I've learned that she (or maybe all women?) have a sixth sense about these things.
My original plan was to get an 80% LTV conventional loan and pay the rest with proceeds from exercising my stock options and taking out a small 401k loan. Until I could get the 401k loan paid off (probably within 9 months), I wouldn't have much CF (if any). Plus, I'd still have to make some repairs in the meantime in order to get the other two units occupied quickly. Once those two things happened, though, I'd be cashflowing steadily. To take much of the burden off of me, financially, up front, I decided to do some number crunching and sent the agent the following offer:
1. I would try to get a conventional loan to cover 80% of the purchase as before with the stipulation the interest rate would not exceed 7.5% and be amortized for no less than 30 years with a balloon payment due no earlier than 10 years.
2. The Seller would take back a note for the balance (20%) of the purchase with a stipulation that the interest rate would not exceed 6% and be amortized for 15 years with a balloon payment due no earlier than 5 years.
If you recall my talk with the Seller, he didn't want to owner finance any part of the purchase, however, he said at the end that if it's what sold the house he'd do it. So, I'm banking on this being the make-or-break item. If he accepts, a lot of the upfront financial burden will be lifted from me, and I'd be in a better position to handle repair work as it came. We'll see how that goes as well.
TheFastLaneToMillions.com
I saw this mentioned on Kenric's web site and I went to check it out. I must say I was impressed with the way the forums are managed and decided to register. I hope to not only get some good advice from people who have "been there and done that", but also give some OJT experience/advice of my own.
The last I heard from the potential renter was last Friday with an email that said a family member had to go to the hospital. She sent the email using an account that had a different name than her - possibly a friend? Anyway, I responded back (last Friday) that she could fax me the completed lease application that day before 4pm or we could meet at the property over the weekend so she could give it to me. I didn't get a fax on Friday nor did I hear from her over the weekend. I was going to call her yesterday, but got tied-up all day at work. The only number I have for her is her work number and they had closed by the time I could call. Today I was again busy in the morning, but set aside some time to call her this afternoon. I asked her if she was still interested in the place since I hadn't heard back from her. She apologized profusely and said she has been busy packing and going to the hospital to visit her family member, but that she was still interested and would fax me the completed app first thing the following morning. She said her current lease expires this Friday and she will need to be moved out by then. I told her the quicker I get the app, the quicker I can get back with her on a decision. We'll see.
4-Plex
This isn't going so well. The more I think about this property, the more I'm questioning if the $300/mo+ CF is worth me jumping into a property that may be headaches down the road. You may recall my talk with the Seller last week in which he said it still needs some work done, including "running a new electric cable to the street" (which he got a bid of $900 to do), among other things. My wife is also totally against it, and I've learned that she (or maybe all women?) have a sixth sense about these things.
My original plan was to get an 80% LTV conventional loan and pay the rest with proceeds from exercising my stock options and taking out a small 401k loan. Until I could get the 401k loan paid off (probably within 9 months), I wouldn't have much CF (if any). Plus, I'd still have to make some repairs in the meantime in order to get the other two units occupied quickly. Once those two things happened, though, I'd be cashflowing steadily. To take much of the burden off of me, financially, up front, I decided to do some number crunching and sent the agent the following offer:
1. I would try to get a conventional loan to cover 80% of the purchase as before with the stipulation the interest rate would not exceed 7.5% and be amortized for no less than 30 years with a balloon payment due no earlier than 10 years.
2. The Seller would take back a note for the balance (20%) of the purchase with a stipulation that the interest rate would not exceed 6% and be amortized for 15 years with a balloon payment due no earlier than 5 years.
If you recall my talk with the Seller, he didn't want to owner finance any part of the purchase, however, he said at the end that if it's what sold the house he'd do it. So, I'm banking on this being the make-or-break item. If he accepts, a lot of the upfront financial burden will be lifted from me, and I'd be in a better position to handle repair work as it came. We'll see how that goes as well.
TheFastLaneToMillions.com
I saw this mentioned on Kenric's web site and I went to check it out. I must say I was impressed with the way the forums are managed and decided to register. I hope to not only get some good advice from people who have "been there and done that", but also give some OJT experience/advice of my own.
Monday, August 27, 2007
Facebook Application Development
I ran across the following article, which talks about the recent release of the Facebook API and how this could potentially create a good stream of income for interested application developers. With the advent of social networking web sites and applications, like MySpace.com and Facebook.com, thousands upon thousands of clients are being added each day which plays right into the hands of what I was talking about several posts before - the Internet can create a wealth of income for the savvy businessman/businesswoman. I've already downloaded some documentation on the on the API, SQL, and markup language aspects. Now to come up with an application that users will flock to. The one interesting part of the article is how - at the end - they give a nice breakdown of what to avoid and what to concentrate on. What I'm wondering is when will MySpace.com do a similar thing (not if, but WHEN).
Thursday, August 23, 2007
Rental Market Upswing?
As I mentioned in my previous entry, the landscape seems to have changed in my area for rentals over the course of the last two years. I'd hate to contribute it to the subprime meltdown, but I don't have a clue as to why I am receiving so many calls from people over ONE ad I put in CraigsList. When I got home last night, I received THREE more calls from interested people. I actually met the one lady last night at the house and she appears to be a good tenant prospect. It seems almost all the people who've called have a pet of one type or another, but this lady said the only "animals" she has are her two children (LOL!). While showing her the house, she said it was exactly what she wanted: 1-story, large (but not too large), 4 bedrooms, and a big backyard. She said the views and the fact there were no neighbors in the back were an added plus. She asked me several times about the neighbors on either side, which gives me the impression that she is someone who will be a good tenant (i.e., she doesn't want loud/noisy neighbors, because she isn't). I gave her an application to fill out and she gave me the application fee. She said she'll fax the completed app to me today, and if everything looks good, will move in the end of the month. Another two things that gave me an impression that she will be good are (1) she works in the medical field, which is probably the LAST field in America today that has a problem with layoffs and finding work, and (2) she asked ME for the Lease Application and Authorization to Release Information as if she already knew the whole process and wasn't intimidated by what I might find. All the same, I'll be a bit more thourough in my screening this time.
Wednesday, August 22, 2007
A Microcosm Real Estate Market
I can attest to the change in the market in my area. We've had House #1 on the market now for a little over three months. I've dropped the price down twice and even offered some incentives, but still no offers. School will be in session very soon, so my wife and I decided to also put the house up for rent. I first asked the broker with whom we have the house for sale if it would be okay, and when they said there was no problem, I placed an ad in CraigsList. The first day came and went with no calls, and I thought maybe I overpriced the lease amount (although, it was the same as I had it before). When I first bought the place two summers ago, I put it both for sale and lease. It took several months then - in the summer - before I got a couple to lease the house. I was thinking this time, I may had been too late in posting the ad. Then the second day, I get a call from a man who saw my ad and wants to lease the place. The only problem is he has a 100lb dog. Still, he says he can keep him outside in one of those cages. Hmmmmmm. I tell him we can meet later this week at the property to discuss it more. Then a little bit later, I get another call (and email) from a lady looking to lease the house. Not 20 mins later another person calls. Shortly after that, I get another email from a woman asking questions about the property.
Yes, it's only been two days, but it seems the climate has changed significantly. Two years ago I went through the whole summer with the house for sale AND lease and it still took about 3 months before I got someone to lease the house. This time, I have it for sale for 3 months with no takers, yet the day after I put an ad out for lease, I'm getting inundated with calls/emails.
Wish now I hadn't sold House #2 ... Well, maybe not.
Yes, it's only been two days, but it seems the climate has changed significantly. Two years ago I went through the whole summer with the house for sale AND lease and it still took about 3 months before I got someone to lease the house. This time, I have it for sale for 3 months with no takers, yet the day after I put an ad out for lease, I'm getting inundated with calls/emails.
Wish now I hadn't sold House #2 ... Well, maybe not.
Straight From The Horses Mouth
Sorry, I've been on a mini-sabbatical from REI as "life" seems to have taken me away. I'm actually contemplating different things at this point, mainly entertaining the idea of starting a business. Nothing concrete yet as I'm still trying to weight different issues.
I've mentioned before how this 4-plex deal in WV has been taking such a long time to materialize. Part of it is due to my workload and not spending as much time on it as I should, while another part is getting many of my questions answered by the agent handling the deal (she's both the buyer's and seller's agent in this deal). The owner sent my a list of items earlier this month that he's already repaired, but my main concern was what condition the property was in RIGHT NOW - IOW, is there anything still needing repaired. Emailing the agent takes forever as I'm lucky it takes a week to get a turnaround response.
I noticed on the list of items repaired, the owner jotted down his name and telephone number, so I decided today to give him a call and hear it "straight from the horses mouth." It turns out the owner lives out-of-state, too, but found this property for the cheap and decided to try fixing it up. He claims he's already put $15,000 into the place, and has run out of money for any additional repairs (which there is still some things left to do). I asked him about occupancy, and he says two of the units are currently occupied, and he is using one for himself (and his daughter). The other, he says, WAS occupied, but when the tenants left he wanted to leave it empty in order to do some "touch-ups". Guaging from what he told me, he may be getting to a point of desperation. He told me a few times that he has no more money and that he is starting to get homesick (his wife and other children stayed back home). I didn't ask, but he sounds like an investor himself. He said he asked the agent a few times if she could give him my contact info, but she told him "no". I said agents may be legally bound not to give the info out, but I'm glad he put his contact info on the repair list as I was having a helluva time getting anything answered. Seeing as how he sounded a bit desperate, I asked him if he would entertain the idea of carrying back a note. He said "no", but later on in the conversation, he said if it meant he could unload the house, he would consider it.
So, now my dilemma. The place sounds like it still needs some repair work. One of the things he told me still needed done was to run new electrical to the road to handle the increased amperage. He got some bids and the lowest was $900. He said he'd have no problem "overseeing" that repair if I'd pay for it (since he had no more money). There were some other items that were minor, but still needed to get done. There is no way I can take off work, go up there for 2-3 weeks and get the stuff done. I'm just not sure what to do at this point. The PM can (hopefully) contact some contractors to get the needed repairs done, but not sure at what cost (although, it'd be cheaper than me flying up, staying 2-3 weeks, and doing it myself, I'm sure). Even without seller financing, I'd be getting about $400-$600/mo. CF using the 50% gross income rule of thumb, so it'd be good income.
I just need to do a lot of thinking about this.
Update: It looks like the horse's mouth opened up to the broker, too. After asking the seller not to tell the agent/broker about our conversation, he must have said something to her afterward. I got a call from the agent's assistant saying the seller called and wondered why the communication between the three of us takes so long. Oh boy. I sent the agent a quick email stating that I did indeed contact the seller directly, but only because I had a pending question that I needed answered ASAP in order to better ascertain the condition of the property. I apologized if there was any mis-communication. We'll see what comes of this. I guess the seller IS getting desperate if he's now complaining to the agent about such things. I thought our phone call went well, but I guess he may be going into panic mode.
I've mentioned before how this 4-plex deal in WV has been taking such a long time to materialize. Part of it is due to my workload and not spending as much time on it as I should, while another part is getting many of my questions answered by the agent handling the deal (she's both the buyer's and seller's agent in this deal). The owner sent my a list of items earlier this month that he's already repaired, but my main concern was what condition the property was in RIGHT NOW - IOW, is there anything still needing repaired. Emailing the agent takes forever as I'm lucky it takes a week to get a turnaround response.
I noticed on the list of items repaired, the owner jotted down his name and telephone number, so I decided today to give him a call and hear it "straight from the horses mouth." It turns out the owner lives out-of-state, too, but found this property for the cheap and decided to try fixing it up. He claims he's already put $15,000 into the place, and has run out of money for any additional repairs (which there is still some things left to do). I asked him about occupancy, and he says two of the units are currently occupied, and he is using one for himself (and his daughter). The other, he says, WAS occupied, but when the tenants left he wanted to leave it empty in order to do some "touch-ups". Guaging from what he told me, he may be getting to a point of desperation. He told me a few times that he has no more money and that he is starting to get homesick (his wife and other children stayed back home). I didn't ask, but he sounds like an investor himself. He said he asked the agent a few times if she could give him my contact info, but she told him "no". I said agents may be legally bound not to give the info out, but I'm glad he put his contact info on the repair list as I was having a helluva time getting anything answered. Seeing as how he sounded a bit desperate, I asked him if he would entertain the idea of carrying back a note. He said "no", but later on in the conversation, he said if it meant he could unload the house, he would consider it.
So, now my dilemma. The place sounds like it still needs some repair work. One of the things he told me still needed done was to run new electrical to the road to handle the increased amperage. He got some bids and the lowest was $900. He said he'd have no problem "overseeing" that repair if I'd pay for it (since he had no more money). There were some other items that were minor, but still needed to get done. There is no way I can take off work, go up there for 2-3 weeks and get the stuff done. I'm just not sure what to do at this point. The PM can (hopefully) contact some contractors to get the needed repairs done, but not sure at what cost (although, it'd be cheaper than me flying up, staying 2-3 weeks, and doing it myself, I'm sure). Even without seller financing, I'd be getting about $400-$600/mo. CF using the 50% gross income rule of thumb, so it'd be good income.
I just need to do a lot of thinking about this.
Update: It looks like the horse's mouth opened up to the broker, too. After asking the seller not to tell the agent/broker about our conversation, he must have said something to her afterward. I got a call from the agent's assistant saying the seller called and wondered why the communication between the three of us takes so long. Oh boy. I sent the agent a quick email stating that I did indeed contact the seller directly, but only because I had a pending question that I needed answered ASAP in order to better ascertain the condition of the property. I apologized if there was any mis-communication. We'll see what comes of this. I guess the seller IS getting desperate if he's now complaining to the agent about such things. I thought our phone call went well, but I guess he may be going into panic mode.
Thursday, August 09, 2007
Non-stop Merry-Go-Round
It seems instead of the vacation rejuvenating me, all it did was put my JOB work on hold (and let new things pile up). Every day I've been back has been non-stop work either trying to catch-up with old stuff, start/finish new stuff, or put out "fires". And there doesn't appear to be any immediate relief in sight.
Okay enough already about that.
I'm not sure I mentioned this already here, but I've been talking to another guy on one of the projects I'm on at work who is into REI. He's already knows where he wants to invest, has an agent lined-up (and a good one from what he's told me), and is trying to get some GC's onboard. We've talked several times about REI and he seems to have all the "book" knowledge down. He's more into flipping as I'm more into holding, but we can still help each other out. He also is concentrating on a whole different zip code than me, which is good I guess. He did come across a property recently, which he wanted me to analyze. Everything looked okay (not great, but okay) until he said it may have a foundation problem. I told him depending on the severity, it could cost him $10k-$15k to level, or higher if there are more issues. That seemed to be the deal killer.
I'm also about the width of a hair away from pulling the trigger on the 4-plex out-of-state. This deal has been like "walking through mud in the winter" slow. I received the list of repairs the current owner has done, but still haven't had 10 minutes to sit down and look over the list (it's 3 pages long). It seems like he's done quite a bit of work, but my main reason for asking was to see in what shape it will be in IF I take it over. IOW, is there more work to be done? Maybe the list says somewhere as I haven't read it all yet.
Anyone know where I can find a clone machine?
Okay enough already about that.
I'm not sure I mentioned this already here, but I've been talking to another guy on one of the projects I'm on at work who is into REI. He's already knows where he wants to invest, has an agent lined-up (and a good one from what he's told me), and is trying to get some GC's onboard. We've talked several times about REI and he seems to have all the "book" knowledge down. He's more into flipping as I'm more into holding, but we can still help each other out. He also is concentrating on a whole different zip code than me, which is good I guess. He did come across a property recently, which he wanted me to analyze. Everything looked okay (not great, but okay) until he said it may have a foundation problem. I told him depending on the severity, it could cost him $10k-$15k to level, or higher if there are more issues. That seemed to be the deal killer.
I'm also about the width of a hair away from pulling the trigger on the 4-plex out-of-state. This deal has been like "walking through mud in the winter" slow. I received the list of repairs the current owner has done, but still haven't had 10 minutes to sit down and look over the list (it's 3 pages long). It seems like he's done quite a bit of work, but my main reason for asking was to see in what shape it will be in IF I take it over. IOW, is there more work to be done? Maybe the list says somewhere as I haven't read it all yet.
Anyone know where I can find a clone machine?
Monday, August 06, 2007
Vacation?
I took last week off from my JOB to recoup some. Of course, the time flew by and almost everything I had planned never got done. It was enjoyable, regardless, as I took the time to just put my whole life on the back-burner and concentrate on family. I did sneak in a few minutes for REI and thinking up business ideas, though. Actually, while doing some yard work, I even came up with another couple of ideas to put on my list. One, of all things, is a clothing idea, while two others were more book ideas (now, if I only had the time to sit down and write). The clothing idea isn't something I see "flying off the shelves" so-to-speak, but I think it would be a good seller. There are a couple of kinks I still need to iron out, but I think those are minor.
Thursday, July 26, 2007
Stock Options and Patent
Stock Options
Way back in the hey-days of the dot-com era, my company awarded me with 600 shares of stock options. At the time, the share price was going up every day, and within a month it had already risen about 15 points above the strike price (making the options worth $9,000). Then all hell broke loose as the economy tanked, the markets went south, and my options were now worthless. One of the stipulations with the options is they were vested for 4 years, so there was nothing I could do but watch my "award" become worthless. I haven't followed the price very much lately as up until about 6 months ago the options were still underwater. By accident, I happened to look at the price earlier this week and saw in amazement that it was 1 point HIGHER than my original strike price. Whoo-hoo! Now my options were actually worth something again. This morning I looked again, and lo-and-behold, the share price is now 12 points above the strike price, making my options worth about $7,200.
Now the dilemma ...
Do I exercise and sell the options and walk away with a decent profit, or do I do nothing and hope they continue to go up? I guess that's the question almost every investor asks themselves - WHEN to get out of an investment. I'm not too savvy when it comes to the stock market, I embarrassingly admit, but I have an uneasy feeling this current run-up in the market may just be an anomaly. The company I work for is a big Fortune 100 IT product & services corporation that had an excellent 1H and particularly strong 2Q this year.
My initial thought is to do this ... Keep tabs on the share price (of course). If it plateaus (IOW, if it starts to go down), make note of the highest price and subtract $5 - that will be my exit price. If it continues to go up, I'll just continue to keep tabs on it. Of course, the price could tank >$5 in one day, meaning I'd take a heavier loss than expected, but that's a chance I'd have to take.
What I'd like to do is use the $$$ as a downpayment and closing costs for the 4-plex out-of-state. It's debatable if the ROI would be infinite or not as the money could be looked as earned or unearned, depending who's looking. Either way, it would be money I wasn't expecting at this time.
Patent
Another unexpected stream of income came by way of a patent I submitted about four years ago via my company. They strongly encourage submitting patent ideas here (which, boosts their IP portfolio), and if they accept your idea, you get a nice plaque and some money ($500). Then the idea gets formally submitted to the U.S. Patent & Trademark Office for their scrutiny. That's where it takes so darn long. If they don't accept your idea, then that's as far as it goes (you still get to keep the plaque and money the company gave you, though). But if the USPTO accepts your idea then you get a nicer plaque AND an additional $500.
I found out earlier this week they FINALLY accepted my idea, so I should be getting another $500 soemtime soon (probably in my next paycheck). Of course, using Kiyosaki's income model, by the time I actually see ANY of the money, it will only be half ($250). :-(
Way back in the hey-days of the dot-com era, my company awarded me with 600 shares of stock options. At the time, the share price was going up every day, and within a month it had already risen about 15 points above the strike price (making the options worth $9,000). Then all hell broke loose as the economy tanked, the markets went south, and my options were now worthless. One of the stipulations with the options is they were vested for 4 years, so there was nothing I could do but watch my "award" become worthless. I haven't followed the price very much lately as up until about 6 months ago the options were still underwater. By accident, I happened to look at the price earlier this week and saw in amazement that it was 1 point HIGHER than my original strike price. Whoo-hoo! Now my options were actually worth something again. This morning I looked again, and lo-and-behold, the share price is now 12 points above the strike price, making my options worth about $7,200.
Now the dilemma ...
Do I exercise and sell the options and walk away with a decent profit, or do I do nothing and hope they continue to go up? I guess that's the question almost every investor asks themselves - WHEN to get out of an investment. I'm not too savvy when it comes to the stock market, I embarrassingly admit, but I have an uneasy feeling this current run-up in the market may just be an anomaly. The company I work for is a big Fortune 100 IT product & services corporation that had an excellent 1H and particularly strong 2Q this year.
My initial thought is to do this ... Keep tabs on the share price (of course). If it plateaus (IOW, if it starts to go down), make note of the highest price and subtract $5 - that will be my exit price. If it continues to go up, I'll just continue to keep tabs on it. Of course, the price could tank >$5 in one day, meaning I'd take a heavier loss than expected, but that's a chance I'd have to take.
What I'd like to do is use the $$$ as a downpayment and closing costs for the 4-plex out-of-state. It's debatable if the ROI would be infinite or not as the money could be looked as earned or unearned, depending who's looking. Either way, it would be money I wasn't expecting at this time.
Patent
Another unexpected stream of income came by way of a patent I submitted about four years ago via my company. They strongly encourage submitting patent ideas here (which, boosts their IP portfolio), and if they accept your idea, you get a nice plaque and some money ($500). Then the idea gets formally submitted to the U.S. Patent & Trademark Office for their scrutiny. That's where it takes so darn long. If they don't accept your idea, then that's as far as it goes (you still get to keep the plaque and money the company gave you, though). But if the USPTO accepts your idea then you get a nicer plaque AND an additional $500.
I found out earlier this week they FINALLY accepted my idea, so I should be getting another $500 soemtime soon (probably in my next paycheck). Of course, using Kiyosaki's income model, by the time I actually see ANY of the money, it will only be half ($250). :-(
Tuesday, July 24, 2007
Time Flies
Geez, I can't believe it's been so long since my last post. Unfortunately, my JOB has been piling more work on me, so I haven't devoted enough time/energy to pursuing other ventures. I did get a chance to research the one item I thought would be good. My initial results, though, weren't very encouraging. I found several other companies who already implement such a business model, and one has a complete solution for a mere $20. Their solution even does things I hadn't even thought of, so I may be scrapping that idea altogether. Plus, I don't think there would be as near a customer base as I originally thought.
So, I'm looking into some of the other ideas I mentioned plus some other things that have shot through my head since my last post. All I need now is time to gather information and see if any of them are worth pursuing further.
BTW, received another post from the agent on the out-of-state 4-plex. She said she finally got hold of the owner at the property, and he was still making some updates (hmmmmm) and he would pass along the list I asked for to her "soon". In the meantime, she said it would probably be a good idea for me to go ahead and schedule an inspection. Of course, we don;t even have a contract in place yet.
So, I'm looking into some of the other ideas I mentioned plus some other things that have shot through my head since my last post. All I need now is time to gather information and see if any of them are worth pursuing further.
BTW, received another post from the agent on the out-of-state 4-plex. She said she finally got hold of the owner at the property, and he was still making some updates (hmmmmm) and he would pass along the list I asked for to her "soon". In the meantime, she said it would probably be a good idea for me to go ahead and schedule an inspection. Of course, we don;t even have a contract in place yet.
Friday, July 13, 2007
Wading Through Mud
Ever since I got back from my mini-vacation, I've been super busy at work. Lot's of loose ends to tie up. It's ironic, but I was talking to a friend of mine at work the other day about work, and how much time we spend THINKING about our work. Yes, there is the time you are actually DOING work, but it's interesting how much time you are THINKING about work when you aren't even actually at (or doing) work. Work in this sense being your JOB. I've been tasked to fix a few problems at work, and even though I clock out at say 5:50pm, I still find myself at home playing with the kids, or watching TV, or whatever, THINKING about the issues I'm doing at work. This is significant, because imagine if one didn't HAVE a JOB? Imagine all that THINKING time being applied to OTHER ventures - ventures that would actually make you wealthy? It was a real eye-opener.
Anyway, back to REI ... I received an email from the agent about the 4-plex out-of-state yesterday. I hadn't heard from her since probably the last week in June (or maybe even before that). Way back when, I had sent her a PM contract I got from a RE agent in Texas, which she had kept saying she was going to run it by a lawyer there to make sure it's legit in her state. It turns out she FINALLY received word back from the lawyer, who told her it was the best PM contract he had ever seen, since it covered every aspect of Property Management. She also said that she's been trying to get hold of the Seller to answer some more of my lingering questions, but his phone number is now disconnected. Hmmmmmmm.
Lastly, I came up with another venture for my list of things. I actually think this has the best chance of making it, but I'm still gathering some info. One thing I've read is that you should always try to tackle one, or at the most, two, tasks at any given time. Some of the reasoning was that you can concentrate more on getting the tasks completed, and you won't let things fall through the cracks (as much). I think a lot of times, I find myself trying to do too many things at once. Sure, sometimes it's unavoidable, but for something that has a potential like a money-making venture, it's more crucial. That's why I'm only going to concentrate on 1-2 ventures from my task to work on. If it (or they) don't pan out, I'll hop to another one.
Anyway, back to REI ... I received an email from the agent about the 4-plex out-of-state yesterday. I hadn't heard from her since probably the last week in June (or maybe even before that). Way back when, I had sent her a PM contract I got from a RE agent in Texas, which she had kept saying she was going to run it by a lawyer there to make sure it's legit in her state. It turns out she FINALLY received word back from the lawyer, who told her it was the best PM contract he had ever seen, since it covered every aspect of Property Management. She also said that she's been trying to get hold of the Seller to answer some more of my lingering questions, but his phone number is now disconnected. Hmmmmmmm.
Lastly, I came up with another venture for my list of things. I actually think this has the best chance of making it, but I'm still gathering some info. One thing I've read is that you should always try to tackle one, or at the most, two, tasks at any given time. Some of the reasoning was that you can concentrate more on getting the tasks completed, and you won't let things fall through the cracks (as much). I think a lot of times, I find myself trying to do too many things at once. Sure, sometimes it's unavoidable, but for something that has a potential like a money-making venture, it's more crucial. That's why I'm only going to concentrate on 1-2 ventures from my task to work on. If it (or they) don't pan out, I'll hop to another one.
Monday, July 09, 2007
Back from "vacation"
While my vacations are anything BUT vacations in the traditional sense these days, it was nice to get away from work for more than a weekend. I have another week scheduled towards the end of this month, so I'll be looking forward to that as well.
Of course, when I am off from my JOB, I can usually count on having to catch-up on things around the house that I've neglected to do since the last time I was off (for an extended period of time). Unfortunately, this time I also got a cold the VERY FIRST DAY I was off, so I felt miserable the whole time. It finally cleared up today - my first day backt o my JOB. Figures.
Anyway, I mentioned I wanted to take a few hours off during this time to really do some soul-searching on some ventures to kick-start my early retirement plans into gear. Well, suffice it to say I didn't get ANY such time as I was busy the whole time (yeah, even with a cold). My wife decided that this would be the perfect time to build the wall out back with the leftover limestone that's been sitting in a pile for the last 5 years. I managed to finish that "chore" yesterday, and I'm feeling every bit of the work today.
Ironically, though, I did come up with a short list of things that could provide some additional income. I don't want to divulge too much right now, but here are the general ideas:
1. A new web site. I can't say much more than that without giving the idea completely away. :-(
2. A method to secure intellectual property over the internet. (*)
3. An E-book. Actually several of them.
4. A web application for enterprise customers. (*)
5. A method to provide informational services for consumers. (*)
6. A device to help with #5. (*)
(*) - I have to get these ideas reviewed by a patent board at my company first, or risk being sued later. It's one of those things I had to sign when I got hired on here.
Of course, when I am off from my JOB, I can usually count on having to catch-up on things around the house that I've neglected to do since the last time I was off (for an extended period of time). Unfortunately, this time I also got a cold the VERY FIRST DAY I was off, so I felt miserable the whole time. It finally cleared up today - my first day backt o my JOB. Figures.
Anyway, I mentioned I wanted to take a few hours off during this time to really do some soul-searching on some ventures to kick-start my early retirement plans into gear. Well, suffice it to say I didn't get ANY such time as I was busy the whole time (yeah, even with a cold). My wife decided that this would be the perfect time to build the wall out back with the leftover limestone that's been sitting in a pile for the last 5 years. I managed to finish that "chore" yesterday, and I'm feeling every bit of the work today.
Ironically, though, I did come up with a short list of things that could provide some additional income. I don't want to divulge too much right now, but here are the general ideas:
1. A new web site. I can't say much more than that without giving the idea completely away. :-(
2. A method to secure intellectual property over the internet. (*)
3. An E-book. Actually several of them.
4. A web application for enterprise customers. (*)
5. A method to provide informational services for consumers. (*)
6. A device to help with #5. (*)
(*) - I have to get these ideas reviewed by a patent board at my company first, or risk being sued later. It's one of those things I had to sign when I got hired on here.
Tuesday, July 03, 2007
Motivating Story
I was perusing the Rich Dad forums at lunch and came across a truly motivating "rags to riches" story by one of the members. He gives an overview of how he started a business that started as a trickle and turned into a stream, which he eventually sold for $1.2 million. He makes some key points along the way, which to me are better than the story itself. For example, many people are destined to fail before they even start because their defined purpose is not aligned with a true business model. Specifically, they ask themselves "What business can I start that will make me tons of money?" when they should really be asking "What business can I start that will fill a need for people?" His list of things he recommends are as follows:
1. Fill needs. Solve problems. And do it BETTER than your competitors.
2. Never stop learning - never stop educating yourself.
3. Stop asking yourself "How can I make money?"
4. Your time is valuable, so build "systems" to generate cash flow.
5. Attract businesses rather than people. [His reasoning is that people are more fickle with their money than businesses. Not sure I completely agree.]
6. Immerse yourself in an environment that will foster your growth. [IOW, remove as much negativity/"noise" from your life that will inhibit your success.]
7. Remain in control. [But don't let it control you.]
8. Protect your image and your assets. [Including intellectual property.]
9. Focus on one thing at a time. [Switching gears to other things will usually do more harm than good - stay focused on your task at hand.]
10. Leave "get rich quick schemes" for late-night TV. [This goes inline with the saying that just when you feel like quitting is when things start happening.]
11. Do something you enjoy. [Again, don't do it solely for money, but also for enjoyment.]
1. Fill needs. Solve problems. And do it BETTER than your competitors.
2. Never stop learning - never stop educating yourself.
3. Stop asking yourself "How can I make money?"
4. Your time is valuable, so build "systems" to generate cash flow.
5. Attract businesses rather than people. [His reasoning is that people are more fickle with their money than businesses. Not sure I completely agree.]
6. Immerse yourself in an environment that will foster your growth. [IOW, remove as much negativity/"noise" from your life that will inhibit your success.]
7. Remain in control. [But don't let it control you.]
8. Protect your image and your assets. [Including intellectual property.]
9. Focus on one thing at a time. [Switching gears to other things will usually do more harm than good - stay focused on your task at hand.]
10. Leave "get rich quick schemes" for late-night TV. [This goes inline with the saying that just when you feel like quitting is when things start happening.]
11. Do something you enjoy. [Again, don't do it solely for money, but also for enjoyment.]
Monday, July 02, 2007
The Million Dollar Question
I'm still burned out from work, but thought I'd make a post to signal that I'm still alive here. Our project completed last Friday, and our boss' boss said we could have this Thursday and Friday off for all the hard work we did. Of course, all the unpaid overtime still probably exceeded the time off we are getting, but it's still nice to know I won't have to burn any vacation time.
Over the weekend, I was leafing through Kiyosaki's "Retire Young, Retire Rich", and I happened upong a page where he talks about the million dollar question. I didn't write the question down, but from (failed) memory it basically says:
My life feels like a merry-go-round set on "full speed", but when I'm off this weekend I am going to set aside some quiet time to actually think about this question and possible answers as I feel I am spinning my wheels too much these days and getting absolutely nowhere.
Over the weekend, I was leafing through Kiyosaki's "Retire Young, Retire Rich", and I happened upong a page where he talks about the million dollar question. I didn't write the question down, but from (failed) memory it basically says:
- "How can you do what you do to more for less at a better price?"
My life feels like a merry-go-round set on "full speed", but when I'm off this weekend I am going to set aside some quiet time to actually think about this question and possible answers as I feel I am spinning my wheels too much these days and getting absolutely nowhere.
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