Appraisal Done, Rent Late

I got an email from my property manager this weekend saying the tenant in Rental #1 had not yet paid his rent. She sent him a letter and also spoke with him and he claimed he would drop the rent off in the PM company's night drop over the weekend. No word yet on if he did or not. I asked if the PM told him he'd also have to include the late fees in his payment and haven't gotten a response to that email. I checked the lease and the late fees are $35 if not paid by the 5th of the month and $3 a day after that, so I figure he owes about $56 in late fees so far.

Those are pretty weak fees, if you ask me. Three dollars a day is not a deterrent at all. Unless there is some Oklahoma law I don't know about, I'll be increasing those fees when this lease is up in November.

I did get confirmation that the appraiser was able to get in and appraise the property, so the refi should be moving forward again. The PM also told me the tenant had some maintenance requests. I feel no obligation to do them until he's current on the rent, but there is probably some law about that.. Anyway, the PM felt they seemed like valid requests that an owner should be responsible for and not the tenant. She's getting quotes for repairs and will get back to me when she has them. I don't even know what the requests are yet...

Stop The Insanity!

After I tagged him yesterday, Kenric tagged me back. Bastard :-)

Five Reasons I Blog

1. Motivation. Back when I started blogging in July, 2004, I viewed the blog as motivation for me to follow through on my plans. I had a habit of starting things and not finishing them or only doing something once. I had just sold my first investment property and wanted something to drive me to keep up investing in real estate. The need for more blog fodder proved to be a good incentive for keeping me moving forward. I'd like to think I don't need that incentive anymore...
   
2. Education. Really, REI isn't that hard. The biggest hurdle I had to get over was taking that first step of buying a property - I was intimidated by the thought of being responsible for another mortgage. I want to show others that finding and buying investment property is not that hard, not scary, and provides great wealth potential. All you need to do is conquer your fears. Many of the books I read were great on motivational-type messages, but there was nothing that gave step-by-step instructions or details on the process of buying, renting, and selling properties. (And since every real estate deal is different, there really can't be a book that does this.) Being analytical by nature, I craved these details when I was starting out. My thought was, by blogging about every minute detail of my experiences, I might be able to help those like me who were motivated but still a bit scared. As I said, every deal is different (not to mention, each state has different laws), but there are similarities and hopefully my experiences can help others.
   
3. Networking. By nature, I'm a shy person. It's difficult for me to go out and meet others in a social setting. Since networking is an important part of real estate investing, the blog helps me find other investors in a way that is more comfortable to me.
4. Money. I don't make lots of money from this blog (on a good month, I'll get close to $50 from the Google ads), but it's extra money for me and I budget it towards things I would never spend my W2 income on - like my ludicrously expensive ice cream maker and my next frivolous purchase - a MAME cabinet. Truthfully though, I do make some good money indirectly from here - it's through this blog that I got some properties in Oklahoma.
   
5. Fun / To Kill Time. When I started the blog, I was working at a day job that wasn't very challenging. I had about 6 hours of free time a day. I needed something to fill up that time and I filled it by reading the message forums at richdad.com. From there, I started reading other blogs and decided to start one of my own, writing entries during the free time I had at work. Now, I have much less free time, but I still blog because I enjoy it.

The other meme I was tagged for was five things I obsess about. This is really tough for me because I don't think I obsess about anything. In fact, I've often felt I am not even totally committed to the hobbies I enjoy and if I was forced to give them up, I wouldn't lose any sleep over it. I'm a stereotypical Southern California native - laid-back about pretty much everything. I guess if I had to say I obsess about anything, it's cashflow. I want positive, passive cashflow every month and I look for investments that will provide that. Other than that, I sort of coast through life, enjoying a little of this and a little of that, finding joy in whatever comes my way.

Now that I think about it, I should ask my wife what I obsess about. I'm sure she could come up with a list!

And now, I will take it upon myself to stop the insanity and I will not tag any others for this meme :-)

Rental #1 and Rental #2 Updates

Trisha called me today and updated me on the status of my various Oklahoma properties.

My property manager is set to meet with the appraiser at Rental #1 on Thursday. That should be the final step needed to get the refinance rolling. Well, then all the paperwork needs to be signed, but that's just mailing things back and forth.

Rental #2 still has some work that needs to be done to get it up to spec for the Section 8 inspection. However, the tenants are all sick with the stomach flu, so no work can be done until they are better. The Section 8 inspection was scheduled for this week, but that will need to be rescheduled. It also turns out the fax to Section 8 to raise the rent to $460 from the current $439 did not go through. Trisha re-faxed the request, only this time asking for an increase to $500 a month. She says the property was rented for that in the past, so hopefully, it will be accepted. If it is, it'll really boost my ROI.

I must say that, apart from the issues I was having last month, I am feeling more comfortable with my property management company. It seems the PM is helping nicely with getting the appraisal done. Additionally, even though Rental #2 is still in escrow and not technically mine yet, I'm being kept up to date on the repairs and Section 8 re-inspection process. Further, the repairs were started without my asking and are being paid for by the seller. I'm starting to reach a good comfort level where I can just tell them what needs to be done and they take care of it and I don't need to worry about it anymore. To be perfectly honest, I attribute a large part of this to Trisha joining the PM company, an event I like to think I help play a small part in :-)

Tagged: Magazine Meme

Trisha has taken a break from building her empire and tagged me to find out what magazines I read on a regular basis.

This one's easy. I read exactly one magazine regularly: Cook's Illustrated. I love to cook and what I like about this magazine is they don't just give recipes. They explain what different ingredients and techniques they tried, the results, and discuss how they came to settle on the ingredients and methods they present. The engineer in me loves this stuff. The magazine also only comes out every other month and is fairly thin, which means I can find time to read it all.

Occasionally, I'll pick up an issue of Personal Real Estate Investor Magazine, which is a nice Phoenix-based REI mag, but I don't subscribe and only read it sporadically. I get it more for the ads than anything else.


I'll tag:

Kenric at Live Learn Invest (Cliff also tagged you.)

Molly at My Madeleine (who will probably never see this, since I am a lurker on her blog)

At Last! A Realistic Retirement Outlook From Major Media

My monthly Schwab statements include a financial newsletter. I usually toss these in the trash after scanning them because, quite frankly, they don't have much information that I don't already know. However, the April issue pleasantly surprised me. Although it still doesn't have much info that is new to me, it does feature an article that caught my eye titled "Five Retirement Myths To Ignore." What struck me was that this is the first article I've seen from a major financial source or major media source that states what I feel to be the major problems with current retirement advice. It's about time someone started telling it like it is. Below are their five myths. They commented on each one in the article, but I'll just give you my comments.

1. You'll only need 70% to 80% of your pre-retirement income. Health care expenses are going through the roof and, once retired, it's a good bet you will no longer be covered by employer health insurance. This alone is enough reason to ignore this advice. If you plan to travel more or buy nicer things, you'll definitely need more than 80% of your old income. Personally, I want my standard of living to rise when I retire, not stay the same or go down, so I plan to make more during retirement.
   
2. You'll be in a lower tax bracket. Federal deficits are going through the roof. At some point, taxes will have to be raised. And remember that withdrawals from traditional IRAs and 401(k)s are taxed as ordinary income - the most heavily taxed income there is. Thank goodness for the Roth IRA!
   
3. You'll keep working. Who thinks this? Retirement means you are no longer working!
4. The stock market will save you. By the time you retire, you will not have a long enough time horizon to ride out market fluctuations.
5. There's always Social Security. Haha!! Yeah, right!