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Archive for April, 2015

my realtor, the rich, and Tim Ferriss

April 24th, 2015 at 06:21 pm

Just some odd and end stuff. My realtor pulled up in her blue porsche sports car. And my painter says "are you sure it's a good idea to hire a realtor who drives a nice car?" I say she literally two weeks ago sold my friends house for $886k for a 2 bd condo listed at $799k (same town as me) without a home inspection or mortgage contingency the first weekend. And that's the 5th deal she's done for my friend including selling two of her previous homes, one multi family rental, and buying her current property. And each time she's got full asking price, twice before it hit MLS and sometimes without home inspection contingencies. So I think she's a smart realtor. And I'm hoping she'll want to work hard enough to get the biggest commission so she can buy her next porsche. Perhaps I'm crazy but in realtors I don't mine fancy cars.

So my friend Ms S comes over to see my place and give an honest evaluation. Her quotes to me are "You should have hired the painter to do the whole house. Then you wouldn't be stressing out about getting the place listed. You should have hired a stager they would have brought in furniture, your stuff doesn't match. You should have hired an organizer and hired a babysitter so you could have been faster in purging you place." All true point. But the real truth Ms S doesn't get and will NEVER understand is that "with what money?" Her response "you have to spend money to make money."

The truth is that when you are rich you buy what you want without care. Really, really rich, ie you never worked a day in your life and you never need to because you have a trust fund big enough to support you rich. A trust fund that can pay for private school for your kids at the tune of $50k/year and you not blink an eye. Big enough that when you have your kid you set aside $250k from your trust fund for her college fund. Big enough that you can buy a home cash at 25, be a single mom going to graduate school making $25k/year, and still pay for private school for said child and drive a new leased car every couple of years. That's really, really rich. Ms S is and can be very nice.

But her one fault is she doesn't truly understand how the poor lives. She likes to think she does because she volunteers doing birthday parties at shelters once a month. So she "sees" how they live and takes her kids there. But when I suggested she teach her teenager daughter about being "middle class" by putting her on a budget she said why? I'm sending her to habitat for humanity for teenagers this summer for 2 weeks to learn how to rough it and see how the poor lives.

I said shouldn't you teach her how the middle class lives? That an average family of 4 lives on maybe $800/month groceries (according to FDA) but she spends 3x that plus eats out most meals??? That most people can't afford only organic food? Her response was "oh E understands that. I don't just give her money. She babysits." So when you are that rich that you send your kid to "poverty" but haven't even taught them middle class budgeting it's hard to understand your friends counting their pennies.

So Tim Ferriss wrote the book the four hour work week. My DH tells me he's the reason why he's quitting his job. It resonated with him the idea that you can make more money you can't get back time. So he's taking the risk now to quit and do something else with the opportunity to have more time.

I figure Tim Ferriss is a lot like Mr Money Mustache but not frugal. He lives the life of luxury and isn't ashamed to admit it with lots of consumerish. But at the same time he's preaching working smarter and valuing your time.

Good News 3 Cheers!

April 23rd, 2015 at 01:58 pm

Lots of good news yesterday. First off my DH still has his driver's license. He has not lost 15% of his peripheral vision but according to the specialist he's got splotches. So when he'll have to give up driving is next to impossible to say. He does this all day testing with the top researchers in the world every 2 years. He's been going now for almost 10 years and they love him. They've been able to see the progression of the disease and determine his rate of loss of eyesight. I don't know what that means for us but for now it means that he can drive but will continue to not drive at night and minimize daytime.

He also mentioned after we move and he gets another job, depending on if he rides public transit or drives he'd like to start leasing cars. He wants the newest technology and ideally would like to eek out driving until the self-driving car is sold. He wants the car his brother just lease a Subaru Legacy with all the safety features. I think this is something we are headed too. I'm just happy he's happy and feeling less stressed with worry.

We had our photos yesterday so our house was photo ready but not show ready. Anyway my broker let another realtor come see the house for his buyer. Apparently they wanted to come in this weekend before we hit MLS to see it and see what they think. This woman is a very serious buyer and has been hunting hard and knows my broker by first name since she's visited every open house this season in my price range my broker has done.

So who knows? I think this is a first positive step. My broker told them she isn't sure we're ready for showings this weekend (I told her no it's giving me anxiety). But come Tuesday she's expecting this woman to come see our place.

So onward home sale!

my fear of organizing

April 20th, 2015 at 01:33 pm

I was reading about credit card free organizing blog and GREATLY enjoying it. I admires the photos and admit that getting my house show ready is making me desirous of an organized home. But I fear it at the same time.

I am not a person who keeps to a routine easily. I am not someone who plans menus or keeps a grocery list. I don't even budget. Yet surprisingly I am organized in one and only one area of my life. My finances.

Sounds strange and my DH would agree we both are hoarding clutterers who keep tons of crap in piles. We tend to toss mail around and our mail sorting and organizing consists of throwing all mail into a paper bag and looking at it once a week. We do that with the kids art to boot. But our finances? Its weird I am completely on top of and organized.

I can tell you probably pretty accurately bout balances and what we are spending. I can tell you how we pay our bills. All our bills are electronic or scanned in and saved to our hard drive. And monthly we back it up on n external hard drive. We also back it up to a CD in our fire safe and we backup our photos from our phones and cameras once a week.

Our bills are on a spreadsheet we creates in excel and you have to input date due, amount, and confirmation code. We have all statements in files organized for the last 10 years. We also scan in medical records and file all immunizations and stuff for us and the kids.

And granted the bulk of our investments are on auto debit before it hits the checking. And actually to make us stick to a hard and fast budget we deposit $5k a month into bank of america and the rest with capital one. So we spend $5k a month. On what? Well I know $2500 mortgage and a few of the other general bills and utilities on balanced billing. But beyond that I don't want to see why mint says I spend my money on. If I had to guess eating out and groceries.

But the rest of our crap? I wouldn't have guessed that my DH and I had $1200 worth of stuff worth selling a and still more to come.

But I am not wondering how can I organize the rest of my life? Perhaps I need to join that organized friend group. But it'd be weird wouldn't it to be live on Facebook away from being LAL?

Are you organized? Are you organized at home or just financials or both? How did you do it?

Selling and Donating and Purging

April 18th, 2015 at 08:40 am

This is the big push weekend for getting rid of stuff. Next week I am cleaning and painting more but this weekend I am selling as much as possible. I have to admit it's kinda a high to sell all my stuff. Granted a bunch of it is still going into storage but DH admits that it's pretty amazing to see us purging so much stuff.

So our stuff has never been expensive. Most stuff has been used or bought cheap. We haven't ever really spent money on adult furniture and stuff. So our stuff hasn't owned us.

But at the same time it's hard to let go and upgrade and spend the money on buying new/better quality stuff. And even just purging and being more thoughtful instead of just keeping it "just because". Sounds nuts but it really is hard to let go of things, even things you can't give away!

But I've sold $1k worth of stuff and I bet if I were more serious I probably could sell another $1k if I had more time and did a yard sale instead of just donating. But on friday I went to a couple of consignment stores and dropped a big pile of donations.

The relief I feel from seeing things leave the house is unbelievable.

Update on house...The front is getting painted and we'll see how the rest looks. It is aluminum siding so seriously the back was never painted and I'm not sure if the sides are going to be done. But it's costing us 40% of $4k = $1600 plus potentially a few more repairs. We'll have to see how much more the other repairs cost.

I still plan on taking a brush to the neighbors crappy stairs. I also plan on washing and staining our deck. My DH calls me nuts. But I will have no children and time to clean our house. I am doing this as of Tuesday. Four days to clean like no one's business.

Wish me luck. I might if I can figure out how to post pictures, post of our place.

Negotiating in a condo

April 16th, 2015 at 08:39 am

So this is why you don't buy in a condo. Right now we are getting the front of our condo painted, railings, wood rot, etc. All in $4k. We had quotes from $2700 to $4k, and the guy I picked was $3200 but he fell and broke his leg on Monday. The $2700 guy couldn't do it till the end of May. There was a quote for $3500 but they kept not returning my phone calls though they said they could start Monday. My DH and I decided upon approval of my neighbors given Monday we would move forward. The neighbors gave approval for work for wood rot and repairs. Not necessarily painting.

Now we list April 28th and our realtor had people drive by who said they wouldn't come into our condo because it looked poorly maintained because of the the paint. So my DH and I decided we would either have the front of the house painted and done by April 28th no matter the cost. Or we would hold off and do the whole house for $11k potentially or nothing.

It would depend if the home buyers wanted it painted or we wouldn't be willing to pony up any money. As it stands our condo breaks down common maintenance as 40%, 40%, 20%.

So it's become contentious because the 20% owners do not want to pay. They also want work done for stairs leading to their unit which was exclusive use and which they never maintained. I don't want to pay for their stairs and neither do the other 40% owners. BUT my DH and I are willing to do so to get out of this situation (ie selling our condo). But the other 40% owners are not.

So things are quickly disintegrating. I find it hard to deal with both parties. We want to throw money at it and make it go away but the others have to fork over something, they have to agree, and they have to live with each other after we leave.

So we are needing to discuss the situation and determine whose responsible for what. All I can say is I'm dying and ready to get out. I was the only person who calls, meets, chases down contractors. I meet all repair people for gas, water line work, rescheduling tree trimmers, gutter cleaners, termite inspection, etc. My DH pays all the bills water, insurance, etc.

So the bulk of responsibility falls on us. I admit to liking the control but at the same time I can't wait to fully control my own destiny. This has been a privilege because we couldn't afford to live where we live otherwise. But at the same time we are ready to move on out.

Selling my junk

April 14th, 2015 at 04:51 am

Well I've been selling off the house left and right. Truthfully if I had time and the weather would cooperate I could probably sell a lot of stuff at a garage sale. But as it is, I haven't the time and the weather hasn't cooperated so I'm going to donate. It's definitely not worth taking things to storage to take them out again to sell. Some stuff it is worth it so I will move to storage.

Anything worth selling has already been sold. So how much have I sold? According to my spreadsheet $905.

The bulk of which were two items my maclaren double stroller for $160, I bought it new in 2013 for $169. Yes I looked up the receipt on Amazon. Great I rented it for traveling for $10.

And a Dining Table Set we bought in 2005 to sell our condo in San Diego. We bought the entire set for $99, I sold it for $160 this weekend.

I made another $90 at consignment stores selling stuff and I'm doing another consignment store run today. So from that we made $410.

Rest were odds and ends I sold like a rocking chair and ottoman for $70. Got it free from a neighbor who moved away. A cosleeper I bought for $40 I sold for $50. And a lot of other kid stuff.

I've still got a lot listed including a huge lot of thomas trains I'm trying to sell for $450. Yes it's a lot to be asking but it's a lot of trains and a huge lot of tracks. After we list I'll probably break it down into 2 lots and sell for $250 each. I think it might work better.

What I haven't sold is a Versagate baby gate for $75 NIB + 2 extensions, worth $150 according to amazon. A bookcase for $25, $10 Ikea Coffee Table, Shoe Rack $10, and wooden high chair $25, area rug $30. I'm thinking they will sell eventually but the rest I'll trash.

But on the other plus side everything I'm donating is a tax write off so we'll have quite a bit written off.

How do you decide what to sell and what to donate?

Counting down the days

April 10th, 2015 at 07:41 am

So I am counting down the days till we list. We have 12 more days until photos of our place. We have 18 days until we list, then 25 more days until the open house and then hopefully it's sold by 27 days from now May 5th. I am praying we list, we have showings, then open house and all offers/bids come in on May 4th. One week of being "show" ready in our house and living like crazy people then we are done.

Some expenses we are spending on getting the house ready is a storage unit at $70/month with 1st month free. We painted the interior and have to get the exterior painted. Now the interior if we had decided 6 months ago we were going to sell this spring we could have done it ourselves. But deciding 6 weeks before listing we were going to sell probably wasn't the more financially efficient thing to do. Of course all the painting the = eating out because we were avoiding the painters and fumes all day. Plus we had to send the dog to daycare so he wouldn't be in the way.

I'm feeling rather indulgent because the week before we list I got the two kids into camp for 4 days all day 8-6. Pricy but $160/day for 2 kids and I have a chance to clean up as a last push. Right now I feel a lot of guilt letting the kids watch too much tv and not making as many playdates or activities like we normally do.

But I feel like as of April 28th we'll be free. No more playing in our house for that week but we won't be as busy. We've been up most night until 1 am packing and cleaning and up again at 6 am getting ready for school and the day.

Real Estate Makes people CRAZY!

April 9th, 2015 at 10:30 am

I am going crazy with the potential sale of my house. I am getting an ulcer and unable to sleep over the amount of stuff I have to clean and do. I feel constant anxiety over it all and I can't help myself.

But I'm happy with the changes and excited with our move. I feel secure knowing we are doing what's best for us and while it's unknown and uncertain it's still pretty good and exciting.

Now I have 4 friends whom real estate is making crazy. First up the insane/crazy Ms A. Her mother has given her the boot (we'll see) and said she needs to sell her multi-family house and Ms A has to move in June. She said I've given you three months notice and I need to sell. Ms A is freaking out because she doesn't know where to move and what they can afford. I told her she needs to rent since they haven't filed their taxes in years, her husband has an IRS Lien, and they have no budget. She said that since they only occasionally pay her mom $1500 for a 4 bd condo, where can she live? I seriously want to ask what happens to the rest of their money if they aren't really paying rent? To put into perspective where I live, a 2 bd/1 ba condo on my street rented for $2500/month. So not only is Ms A getting a steal of a deal, she doesn't even have to pay. So it's a rude awakening and it's making her insane to even start looking. $1500 barely rents a studio where we are.

Next up Ms W and Ms K. Both friends tried to sell their condos last year and they must have been overpriced. Neither one sold though they dropped their prices. Both have done extensive renovations and are hoping their condos sell. I am praying for them because they desperately want to move but are in situations where I guess they either have to take a lot less or stay put. I think both are pretty conservative ladies so they won't make the mistake of buying before selling. But I hope they find the right buyers and haven't overpriced it again or perhaps they'll just have to accept less.

Finally Ms C, well they are getting into deep, deep water. I didn't say anything, but I did congratulate Ms C on putting an offer in on her dream house. That's how bad situations probably always start.

So Ms C and her DH decided they didn't want to sell their condo first because they didn't like the uncertainty of not knowing where they would live. So they offered on a house and it's been accepted. They did not make an offer contingent on the sale of their condo. They make a series of bad decisions.

When I first met them Ms C and I were chatting and I said "oh use my refi guy and get a good rate." She said "oh we didn't put down 20%, only 10% so we can't refi". Okay probably a bad decision at the time. It was further compounded when 3 years ago they built a 3rd bd onto their 2 bd condo and renovations cost $50k to add on because they had to switch out their furnace to support the extra bedroom and vents. They renovated their bathroom (necessary for a leak, and they found mold and mushrooms) this past summer for another $15k. They finished their basement when they moved in, no idea what that costs. But without a doubt, the husband said they are losing a lot of money on their condo. They bought for $275k in 2009 and are hoping to sell it for $319k if they are lucky. I have no idea if they are even able to sell. So bad financial real estate decision they likely make because they choose emotion over logic.

So I was nodding along with the purchase and just asked innocently enough "you did offer contingent on your sale?" Ms C said "no we didn't. We can carry the two places for a bit. And besides we are cashing out our 401k for the DP on the second place, then when this places sells we'll pay it off." I nearly choked on my spit. It got worse when she said "we can always do 0% CC and pay them off when the house sells DH says."

Now it's one thing to buy a new house with a DP you've saved and still carry both places if they aren't too expensive. But when you have to borrow a DP from retirement, CC, or your parents (and yes their parents gave them money for all their home renovations Ms C said so, and thus why she doesn't feel like they are "losing" money on their house, but her DH does); then you can't afford to buy without selling. The electrician they had walk through said that replacing nubbin (1920s electrical) to 200A will be $10kish. I don't know if that means starting or total, but I assumed it'll probably starting. So they are buying a fixer with borrowed money and gambling on selling their home. Ms C should chat with Ms W and Ms K about how it can be difficult to sell a condo.

People are giving me grief for not knowing where we will live after we sell. For not having anything lined up. But seriously? How hard is it to find a rental or even a house?

Real estate makes people crazy!

Honesty of People

April 5th, 2015 at 01:03 pm

So I've been selling stuff on Craigslist. I mostly meet people nearby at a parking lot since I live close to a freeway. I sold yesterday 3 things and two of them in the parking lot. Anyway the 3rd item was a Arms Reach Cosleeper and the woman said she was trying to arrange meeting me at 2 pm but I never heard from her.

I heard back at 3:15 she could meet at 4 pm but we were out the door to go swimming at a friend's pool. So I said "I'll leave it outside on my front door step with an envelope written LAL, leave the money in the envelope in my mailbox. Thanks." In case you were wondering it was $50. She said great. I said enjoy.

I figured that either way the item was gone, whether I made my $50 or not. DH felt that people are more honest when people aren't watching. I said we are purging so either way it's out of our home. I polled my friends about half felt I'd get the money and half said I wouldn't.

So what happened? We got home at around 9 pm and the money was in an envelope in our mailbox. Not only did the lady leave me the money, the mailman didn't take the cash. So I guess people are very honest.

Did I think she would? Yes,I certainly would. But I'm also the crazy person whose personally lost my wallet 3x and had it mailed back and given back to me all three time. Twice with the cash inside and once not, but still pretty good.

I feel like good karma is watching. I've returned a wallet of like $500 cash and coupon book at the grocery store. I hope the person got it. I turned it into the customer service desk since it was in a grocery cart. So I didn't personally send it back, and I hope the customer service didn't take it.

Either way it made my day that the lady gave me my money, the mailman didn't take the cash, and I got rid of another item in my purge.

Landlord or Sell

April 2nd, 2015 at 03:53 am

So more than one friend has commented that my DH and I should turn our current house into a rental. That we should cash out some equity for the DP on our next place and then rent it out. Truth be told we probably have enough cash on hand to buy our next place with a 20% DP without cashing out our current home.

But I don't think it's a good idea. I haven't calculated the OAR or done a spreadsheet of the analysis. But just my gut says it's a bad idea.

I am going to do a rough analysis now. We could rent out place conservatively for $3500/month or $42k/year gross income. Our mortgage on it is $2250/month PITI is $27k/year. We'd only net $15k/year not including HOA $250/month ($3k/year), utilities say $25/month ($300/year) since it's only when vacant.

Obviously it's not a very profitable rental in the sense it has very little cash flow. Another Reader has said in HCOLA people are counting more on appreciation than on cash flow. Sounds reasonable but I think it's really risky to be investing in real estate where I live then. Because you need to have a large cash flow to be able to carry these types of rentals if something goes wrong and there is very minimal cash flow. If something major breaks or is not rented for months then what?

Perhaps if we lived somewhere that renting it would generate 10-15% return on cash I'd do it. But at barely breaking even and counting on appreciation as the way to make money. I think I'll have to pass.

Perhaps more savvy real estate investors will explain why I should or shouldn't keep it as a rental.