Friday, July 31, 2009

Mid-year Adjustments

(1) Max out 401ks - $33,000
(2) Max out 2009 IRAs - $10,000
(3) House project and furniture - $6,000
(4) Add to baby fund - $5,000
(5) Add to emergency fund - $10,000
Total - $64,000

(1) $20,900 (63%)
(2) $10,000 (100%) [this goal is completed]
(3) $865 (9%) [this goal has been reduced]
(4) $376 (8%) ($5376 in our ING baby account)
(5) $1333 (17%) ($23,614 in our ING e/r account)
Total - $33,874 (53%)

With a 10% pay cut for me, everyone in my company took the cut - ouch, we have decided to scale back our 2009 savings goal by $9,000. We reduced our house project and furniture to really just furniture of $6,000 (I've already picked out and priced the new furniture) and we cut out the lasik surgery for Mr. Sam.

Tuesday, July 28, 2009

Empty Rental Property

Question from FC regarding our tenants:

What are the reasons the tenants are leaving? Were they able to find a better deal somewhere else, were they unhappy for some reason that is potentially fixable (or not), or for some other personal reason? What kind of incentives will you offer to try to convince them to stay? Lower rent, one-time credit, different terms, home improvements?

Rental #1 they have decided to move on because the two roommates have made the choice to go their separate ways. Why? We don't know, as we can only ask so many questions. We did offer a concession on rent of $150 a month and also offered to make some improvements.

Rental #1 has been rented for the last five years without ever having to advertise it and the tenants that just moved out had been there two years.

Rental #3 has always been our worst rental, the neighborhood is in disrepair, we have a foreclosure to the south and a recently sold foreclosure to the north of this rental. As an aside, now that the foreclosure to the north has sold I will be filing code complaints since the new owners (an investment company) have done nothing to rehab the property. The folks in rental #3 have decided to stay another month but we did not make any concessions as they are not the greatest tenants and I'd almost rather have the property empty at this point.

Friday, July 17, 2009

Upset Tummy

Today is the first paycheck for me with a 10% reduction in salary. Everyone in my company took that cut so we are all sharing in the pain.

And we have two tenants who are on their way out, which means two additional mortgages that we are responsible for paying next month (unless we can convince them to stay, which we are working on).

As a result, my tummy hurts thinking about how we are going to manage for the next few months while also trying to reach our savings goals. Ugh!

Sunday, July 12, 2009

Mortgage Liabilities

I have updated our NetWorth IQ numbers for our investment property mortgages. It had been a while since I updated our numbers for one of our investment properties, so our total debt load has

Thursday, July 9, 2009

Someone Has Questions

Frugalcoconut stopped by and had some questions for me. How exciting, I write this journal mostly for myself and Mr. Sam (and a few other friends and family that like to keep up to date) so I'm thrilled that someone else had found something of interest here.

FC said - I just read your entire blog backwards ... in sequence from newest to oldest. I would love to hear more about your background as far as being able to attain such a high net worth ... it seems like you both earn a relatively high income from your jobs/careers but also what else goes into it. I'm hoping that you can provide advice on landlording ... including how long you've owned the properties, how far apart you bought them, how did financing investment properties differ from financing primary home, what were some positive things that you've done versus some things that you would have done differently now that you are wiser, is it ever overwhelming having so much mortgage debt as a liability, how is the actual cash flow now versus a year or two ago versus what you initially planned/expected?

I will take a few of these at a time over the next few days.

Background - FC is correct, together Mr. Sam and I earn a good income from our careers. We both have advanced degrees. I think education can be a great way to increase one's earning potential, but education is also expensive. Mr. Sam completed his MBA part time so he was not away from his job and did not lose out on his salary during that time. But, Mr. Sam's MBA student loan debt, $27,000, was our biggest debt when we worked our 2007 Dave Ramsey Debt Snowball. I also incurred student loan debt for my advanced degree and I was out of the work force, attended full time, so I lost out on salary during those years. I had my student loans paid off in five years (the term was 10 years) by not upgrading my lifestyle to professional grade. While I did buy a house right out of professional school I did not make any other large purchases or change my lifestyle.

Friday, July 3, 2009

Fourth of July Numbers

(1) Max out 401ks - $33,000
(2) Max out 2009 IRAs - $10,000
(3) House project and furniture - $10,000
(4) Add to baby fund - $5,000
(5) Lasik surgery for Mr. Sam - $5,000
(6) Add to emergency fund - $10,000
Total - $73,000

(1) $17,684 (54%)
(2) $10,000 (100%)
(3) $815 (8%)
(4) $276 (6%) ($5,276 in our ING baby account)
(5) $0
(6) $1,333 (13%) ($23,214 in our ING e/r account)
Total - $30,109 (41%)

Happy Fourth of July!! We are at the half way point for our 2009 savings goals and we are about $6,300 behind. I would chalk the slower progress to (1) refinancing costs for our primary home (yay 4.7 interest rate) (2) costs related to car accident (boo!) and (3) failure to focus by both me and Mr. Sam (we are just not trying hard enough). Regarding our failure to focus, we have not had one financial family meeting in the last 5 months and our spending plan needs to be updated. I have resolved to update our spending plan and revisit our 2009 saving goals this month (they might need to be tweaked, stay tuned) and Mr. Sam and I have agreed to a family finance meeting and to refocus once we have the numbers in front of us.