appreciation

Home Sale Proceeds

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*This post was started in November 2022, but our son was born 3 weeks early (and on Thanksgiving), so it fell off my radar for a long time while I caught back up. Let’s dive in now.

We sold our primary home at the beginning of November to move a half hour away and closer to family. It was a new construction home, and we purposely sold when we did to avoid capital gains taxes. If you call it your primary residence for 2 of the last 5 years, you’re exempt from capital gains. Considering the market over the last two years (2020-2022), we were slated to owe a hefty penny if we sold before that 2 year mark.

Had we sold earlier or perhaps waited for the spring, we could have made more. Instead, we opted to be rid of the home, not try to rent, and be able to have that behind us. We were extremely fortunate that we were under contract by the end of the first weekend we listed. The market had cooled significantly from the multi-bid, exorbitant pricing, with appraisal waiving language days.

We only had 2 showings. The first politely let us know they wanted a walk-out basement. We had an amazing basement with 9′ ceilings and no soffits, but it didn’t have a door due to the floodplain. We don’t really understand why, but the backyard was definitely low enough for it to have been a walk out basement. It was one of the red flags that made me uncomfortable living there, along with a long delay for construction on our lot and a few around us due to extensive sink hole surveying. The second showing made us an offer 10k below asking. We sort of split the difference at $495k, and they accepted.

There were several houses listed in that neighborhood for weeks after we closed, that were listed the same weekend as us, so I am eternally grateful that the stars aligned for what we wanted/needed.

PROCEEDS CALCULATION

We purchased the home for $346,793 in November 2020. The contracted purchase price when we sold was $495,000, which was completed in November 2022. That’s a difference of $148,207, but that’s not “take away” money.

As the seller, you’re typically responsible for paying out the Realtor commissions. They’re typically 6%. We asked our Realtor if she would drop it to 5% (buyers agent gets 3%, sellers agent gets 2%) since we had drawn up our purchase contract sight unseen and this was the 4th commission based transaction she had from us in less than 2 years. She agreed. I truly don’t like asking someone to take a lower commission, but due to there being several transactions in a short period of time, many not even needing much effort (showings, phone calls, etc.), I accepted Mr. ODA’s plea to ask. That comes to $24,750 paid in Realtor commissions.

We then have to pay off any loans that used that property as collateral. We had a mortgage and a Home Equity Line of Credit (HELOC). We had put 20% down on the purchase, so the mortgage had about $266k left as the balance. The HELOC had been used for a couple of other things than just the down payment on a new home, and it didn’t require principal payments on it while we had it, so that balance was about $86k.

We walked away from the closing table with about $117,000 after tax offsets and such.

PAST DETERMINATIONS FOR WHAT TO DO WITH THE PROCEEDS

In July 2012, we purchased our first home for $380,000. We put 20% down; it was a foreclosure, but the only work we had to do was on the main floor bathroom. When we sold that home Fairfax, VA for $442,500 in October 2015, we paid off a car loan and bought our second two rental properties in Richmond, VA. The car loan was only at 0.9% interest, so it didn’t meet Mr. ODA’s requirements to pay down loans with higher interest rates, but it did alleviate one monthly payment I had to manage. The irony of that statement, now that I manage 14 houses worth of payments all year. We also used those proceeds to put 20% down on the purchase of a new primary home outside of Richmond, which had a purchase price of $359,743. We paid off House1’s mortgage because the loan had a balloon payment that we needed to be ahead of.

When we sold that Richmond home for $399,000 in September 2020, we took about $109k away. We used those proceeds to put 20% down on the purchase of our new home, at $346,793, outside of Lexington, KY. We paid off House4, House6, and House13. Since paying towards a mortgage and not paying it off doesn’t change your monthly cash flow, we focused on where we could eliminate a mortgage payment. We’ve since paid off House11 and House12. House12 had a high interest rate, so we were interested in eliminating that as fast as possible, even though we were paying for it with a partner.

WHERE DID THE MONEY GO THIS TIME

We purchased our current primary home last summer and put work into it. Since we purchased it before selling our house, we used a HELOC to pay for the down payment. That meant that when we walked away from the closing table, the money we were putting in our bank account had no distinct purpose (like in the previous cases where we had to use some of the sale proceeds to buy another primary house).

The first thing we did was open a high yield savings account. At the time, it was necessary because our savings account wasn’t paying market rate. I remember Mr. ODA complaining that interest rates on loans were increasing, but it wasn’t being shown on savings interest side. He found a high yield savings account that gave a sign on bonus (we like that ‘free’ money!). We put $50,000 into that account, earning over 4% interest. The money in that account was removed and put into our regular savings account, which is now earning over 4%.

Since the money didn’t have a purpose, we needed to get it into the market. If we put it all in the market at once, then we’re subject to a lot more fluctuation. To hedge our volatility, we planned to schedule regular investments. It seemed crazy to me, but our financial advisor and Mr. ODA decided on $5,000 per week. That would take 20 weeks to accomplish. To my chagrin, this was set up as an auto transfer. Even with a large balance sitting in the account, it didn’t hurt any less watching $5,000 every week be taken out. This plan didn’t last long though because Mr. ODA found Treasury accounts that act as short term certificates of deposit. My next post will go into this in more detail.

Not an immediate need, and we didn’t rush to buy something for the sake of buying it, but we earmarked about $20k for the purchase of a new van. I love the van we bought in 2019 (which was a used 2017), but it had a few kinks in it. I also felt pretty good about the deal I got on it. However, I didn’t put the time into test driving and looking at this van that I really should have because one of us had to stay in the show room with the kids while the other went for a drive. I also know what I’m looking for in a used car now (that was our first used car experience), versus buying a brand new car that hadn’t been driven by others. It helped that I was looking to buy the same exact van, just newer, so I know how it’s supposed to work and what to test. We ended up finding a van about 2 hours away from us in early 2023. We’re almost a year into this van, and I absolutely love it.

In the back of our minds, we’re still looking for another rental property. There’s an area in town near us that would work for short term rentals, which I’d like to dabble in. We have seriously considered a few, but interest rates have shot it down. A 1500 square foot house, with a $200,000 mortgage, comes to a monthly payment (of just principal and interest) of about $1,400. That’s just not good margins with such high interest on it. We’ll keep an open mind, but so far it isn’t panning out.

SUMMARY

Our savings account is currently earning 4.22%. Mr. ODA is also managing that balance by using the short-term Treasury bills. Since we started with the Treasury bills, we’ve made about $500, which is on top of the interest we’ve earned to date on the savings account, which is over $1600.

We started off with paying the mortgage that had a balloon payment. It was a commercial type loan, so it was amortized over 30 years, but was really only a 5 year loan. We decided to pay it off instead of re-mortgaging it at the end of the 5 years. After we took care of the balloon payment approaching, we started paying off mortgages where we could eliminate a payment (we had multiple houses with $30-60k worth of a balance), and then moved onto paying off high interest rate mortgages (for reference, a high interest rate was 5% … which is much different than today’s mortgage rates being “good” at 7.5%). We went through the process to refinance several mortgages, so we’re at a point where we’re happy with the mortgages that are left. If we wanted 100% cash flow, we’d start paying towards principal balances. However, we don’t feel that’s necessary for our current situation. We have 6 mortgages left (including our personal residence) out of 14 houses.

We definitely are more hands on with our money management than most people are going to be interested in. Now that we’re happy with our mortgage situation, we are focused on the interest side of our money working for us. With multiple Treasury bills that are reinvested for short periods of time (4 week and 8 week bills), then we’re able to earn quick interest while we don’t have a purpose for that money.

One of our houses has a balloon payment again (commercial loan). That will come due in about 3.5 years. Considering what current interest rates are, it doesn’t appear that refinancing is as enticing as just paying off the balance or selling the house. We’ll have to keep that in mind as we work on investments and having enough liquid cash over the coming years, because that loan’s balance is going to be about $173k at the end of the 5 year term.

For now, we’re in a good money management state with several short term bills and a savings account rate over 4%.

October Financial Update

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Our net worth took a hit this month, over $96k less than last month. I updated the value of each house we own. I don’t do this regularly anymore because it doesn’t change significantly month-to-month and it’s very time consuming. The market is cooling from the multiple-bid market we were in over the last few years, so home values are starting to come down ever so slightly. They’re still much higher than what they were 3 years ago (and I have tax assessments to prove the pain of that), but it does affect our net worth this month since it’s lower than it had been.

Also affecting our net worth is the market itself. It’s down, which it does around this time every year (confirmed through the history of my financial update posts). Our investment accounts are slightly down, our cash is significantly down because I paid off a large credit card balance and because Mr. ODA has transferred to a Treasury account for some of it, and our investment property values are down.

We opened a new credit card this month because we have purchased new carpet for our house (our entire second floor except 2 bathrooms, the stairs, and the living room all add up very quickly). As I’ve shared numerous times, when we’re about to have a large purchase, we look to open a new credit card that we can use as a loan. Sure, we have the cash available to pay this immediately, but wouldn’t it be nice to earn interest on your cash balance for 12-15 months and get some sort of sign-on bonus from the company?

I paid off our last 0% interest credit card at the end of September. But our credit card balance is still slightly higher than I’d expect because I haven’t paid last month’s statement on one, which is almost $3,000. I used to try to pay off all balances before doing a net worth update so that it was the most accurate, but now that we’re keeping Mr. ODA’s paycheck separate and trying to capitalize on interest to earn, credit cards aren’t paid until the last minute. We’re also still carrying about $30k worth of insurance money that we can’t seem to spend because State Farm is doing their hardest to drag their feet and restart our claims process each week.

I have a house that hasn’t paid a penny towards rent this month. She did let us know that it’ll be paid in October some time (no date or expectation given to me is infuriating). If she doesn’t pay something tomorrow (assuming we’re two Fridays into the month for pay checks), I’ll give a warning about the notice of default being given.

September Financial Update

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RENTAL FINANCES

It’s the calm before the storm with rental payments. We’ll owe multiple jurisdictions’ tax payments over the next month. We only have 5 houses with an escrow account, so I’m responsible for insurance and tax payments on my own. I don’t mind it because that means I don’t have to keep money tied up in an escrow account balance, but it does mean that there are large outlays multiple times a year that need to be properly accounted for.

I recently made a post about late rent payments this month. The one who I continue to charge late fees didn’t even pay on the day they said they would. I despise having to hunt tenants down for payment. She emailed me that “September 5th payment” would be late (ugh … it’s due on the 1st, maybe plan for that day instead), she said it would be paid on the 8th. I had to ask on the morning of the 9th where the payment was. I was giving her a few hours to respond and planned to send a notice of default. Lucky for them, I got distracted and busy, and I didn’t get around to it. They finally responded Saturday night that they had lost power and were distracted, but they sent payment then.

I paid out the invoice from our handyman that I had been waiting on, which was $810. I had mentioned that I’m waiting for an invoice from our HVAC guy, but I think he’s not charging me for the service since he had to go back after installing a new condenser. I’m STILL waiting on the roofer to complete the job on one rental. I signed the proposal on July 5th. He finally started the job at the end of August, but decided to change my scope of work without approval. That delayed the project another week. Then I have no idea what has happened over the past week and a half, but supposedly it’s finally done.

A plumber came out for a hot water heater issue at one of the properties. The tankless water heater wasn’t powered on. I don’t even know how that happens, but it seems like something that may become a bigger issue. The company even said they don’t service or work on electric tankless water heaters, so I don’t even know where we would go from here.

PERSONAL FINANCES

In my last financial update, I mentioned that our insurance adjuster had finally came out, three weeks after the tree falling on our deck. He took a week to get us the estimate. We then responded the next day with all the errors and omissions in the estimate. It then took 3 weeks for our email to be acknowledged (even with multiple phone calls). We finally escalated this two weeks ago (State Farm doesn’t make it easy to escalate beyond your desk adjuster answer the phone), had an estimate redone by our adjuster (supposedly) about 12 days ago, who then told us the supervisor approval process would be 3-4 days. Giving the holiday of Labor Day and benefit of doubt, we didn’t push it until Monday, hoping they’d do the right thing and get us information. Mr. ODA saw that we had been reassigned a field adjuster on their portal. So guess what? For an event that occurred over 10 weeks ago, we’re starting over! Lovely.

I paid the kids’ tuition for preschool late. Luckily there’s no late fee charged. The school “opens” links each month. I tried to pay it around the 20th of August for September because I knew the last two weeks were going to be crazy with visitors. When I couldn’t pay it that day, I completely forgot about it. I was part of the “hey, you didn’t pay” email from the director – so embarrassing. Our oldest is going 5 days a week, so now his tuition is $350 per month; our second’s tuition is $175 per month.

Our 0% introductory interest rate on our credit card we opened 15 months ago expires at the end of this month, so that’s over $5k that needs to be paid. Then our credit card statement balance owed on our regular card is about $4,800 because of large rental property expenses. I haven’t paid it yet because I need to transfer money from savings, so I’m waiting until the last minute to do that so we can earn interest on that amount.

NET WORTH

Nothing too exciting to note here. Credit cards are still high, but that will be significantly different next month with our 0% interest card being paid off.

I asked Mr. ODA for his 401k updated amount yesterday, and he made a comment that I should wait to update until today because the market went up yesterday. I had already done the majority of the work, but an ailment and children meant I didn’t get to posting yesterday. So this morning, I updated just our investment account totals to see the difference. The chart above is yesterday’s numbers. Today’s 401k, IRA, and taxable investment account totals are $10,000 higher today than yesterday. That means that if I had updated the numbers today instead of yesterday, we’d be showing an increase in net worth from last month’s update by about $6,000. Instead, I’m showing a slightly lower net worth by about $4,000. It just goes to show how much the market can affect the numbers on any given day, and my net worth in trending generally upwards, but it may not seem that way because of one day’s market closure.

August Financial Update

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It’s getting to be that time of year when large payments need to be made. I’m projecting out our account to cover several tax payments in October and December. I’m also paying insurance amounts, such as $1500 for two houses that’s currently on the credit card. We also have about $5,000 sitting on that 0% interest credit card that will need to be paid off by October 1st (when the 0% incentive expires).

Our credit card balances are higher than average because of rental payments. In addition to the insurance payments, we had an invoice come in that I knew was going to be high. We paid for the water line from the street to the house on a rental to be replaced, which was $3,080.

June and July were rough sick months on us, so now I’m paying those medical bills almost daily it seems. We reached our deductible early this year, so these are just the coinsurance amounts; those $5-20 payments add up though.

Our insurance adjuster finally came out, three weeks after the incident. He literally said “I’m not a contractor, and I’m not from here so I don’t know the codes,” and then proceeded to do the estimate wrong. He was missing items, called things the wrong thing (like a Trex water proofing system that costs $1500 just for materials, he called it a “vapor barrier” and put $190). Now we’re waiting on a second adjuster to come out and meet the deck contractor to go through what actually needs to be done. All the while, our 3 year old keeps sadly saying “I don’t like our broken deck.”

I had to call a medical provider and get some money back. I told them I didn’t want to pay in advance because then I have to call them to get my money back. They said “we’re good about sending it back” and said “it’s simple, it’s just 5% of the total cost.” I said “the total cost isn’t what the insurance allowance is, so whatever I pay you will end up being less.” So now I had to take time out of my day, after giving them a month to do it on their own, to call with 3 kids in the background making noise, and get my $5 back. But then there was a surprise where another urgent care that we saw almost a year ago sent me back the $20 I paid them. That one had slipped through the cracks on me. I had noted that I overpaid them, but then I had a baby!

We had two rentals not be able to pay rent on time this month. One was able to pay on the 12th, which they did. Another paid what they could, and I’m still waiting on the rest. I actually told them to catch up as they could because I didn’t want them to not be able to get their 3 kids ready for school. I’m waiting on an invoice from our handyman for work he’s done on multiple houses, an invoice from an HVAC guy who did work weeks ago, and a roofer to start his job that’s been two months in the making.

Our overall net worth went down slightly from last month because of market fluctuation. Our cash increased by over $30k, but that’s because we received a check from our insurance company to replace our deck after a tree fell on it last month. Some of that is going towards replacing furniture that has been bought already (so it’s on a credit card), and some of it is a reimbursement for the outlay I already made to remove the trees that fell on the deck and fence, but some of it is still to be paid out when the deck is replaced. In the meantime, we’re earning interest in our savings account on it at least.

Rental Work

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We’ve owned rentals since February 2016. There have always been ebbs and flows on action needed by me to manage the rentals. Until this year. Suddenly we’re having a regular influx of maintenance needs; some are small like a leaking tub, while some are big like a tree falling on a house. So here’s the update of actions we’ve taken in 2023, with costs for each job (which is something I used to do and haven’t been on top of).

House 1

Roof Repairs

A wind storm came through at the beginning of March and caused extensive damage. There were shingles missing from this townhouse’s roof. The last update was that the roof was being repaired at the end of June, but I haven’t been by to see that yet. This is $0 to us, as our HOA insurance for the townhomes cover it.

Plumbing

The tenant called to complain that the tub in their second bathroom no longer would let hot water out. Hot water was coming out of the sink in that bathroom. I called a plumber, and he said it was going to be $600 to change the cartridge. Considering we’ve done two bathrooms and I had to buy a cartridge, I know that the cartridge is somewhere around $100. I called Mr. ODA while this man was in the house with the quote, and he agreed that was a crazy uncharge and labor charge. The man standing in the bathroom agreed with me and didn’t even charge me for the service call. ha! I called another company, and he came out to change out the cartridge for $245.

House 2

Burst Pipe

At the end of December, a pipe burst and the house flooded. This sounds like a really big deal. But it turns out, this big of a problem is handled relatively easily since insurance is covering the expense and there are companies that handle the whole ‘kit-and-caboodle.’

Our property manager had to manage the day to day activities for us. At first, it was finding a company to clean up the water. The water reached every single room of the house. The clean up of the water was about $22k.

Second step was finding someone to do the repairs and rebuild. The insurance company estimated the repairs around $40k. Our estimates came in well above that. One company said “give me your insurance agent’s contact, I’ll handle it.” That was amazing. They agreed to an amount for the work to be done, and the next we heard, our insurance agent said they’ll cut us a check for the remaining amount. The company was really easy to work with. I selected the flooring, cabinets, and paint color. Everything else was boiler plate otherwise (drywall repair, insulation, lighting installation). They quoted us to put sheet vinyl in the bathrooms, since that’s what was there, but they agreed to install the LVP all throughout the house (which was likely a cost savings to them anyway) at no charge. They also agreed to let our contractor go into the house to install new kitchen countertops (the previous tenant had burned our counters (drugs?!), but it was a hassle to replace them at that time.

We had a few hiccups along the way, but the company didn’t fight us on fixing them. For instance, they threw away the bathroom countertops, even though they were supposed to be put back in place. They painted the house with a paint bucket that was left over from our July renovation, even though I had given them a different color name to paint it (and then when I explained that in no realm would I have bought the paint for them to use when they’re charging me 10x the price of a bucket through the renovation because insurance is paying it); they repainted everything.

They allowed us to pay the first installment via credit card, so we received $340 worth of credit card rewards from that $17,000 purchase. Then our final amount paid (as reimbursed from insurance) was about $51k.

The insurance covered our increased costs for utilities (since we had to heat the house with no ceiling and insulation) and covered our lost rent for that period of time (I shared the tenant nightmare part of this in previous posts).

The cleaners the repair company used were awful. We waited to see what the new tenant thought about it, and she ended up complaining. So we called in another cleaner, which cost us $200. The refrigerator was disgusting and we ended up replacing it, for $760 (our choices were extremely limited to keep the cost down and to find something in stock since a new tenant was moving in 2 days later). We also had our handyman install new locks, new toilet paper holders, and two new blinds (none of that was covered by insurance), which was $180.

House 4

Tenant Turnover: Painting and repairs

We had a tenant move out of this house. She had lived there since 2018. She finally decided she needed more space (it’s a very small house) as her toddler was growing. I checked on the house a couple of years ago, and things seemed to be in order. She had said that she never wanted to move, so she treated it like her own house. She struggled to keep a job, although always seemed to have one to move on to. Well, over the last two years, she started making “improvements” to the house that weren’t improvements (like painting half the trim in the house black). We had to put a lot of work into that tiny house, and it isn’t even to my standard really.

Our handyman had to paint two coats on all the walls (after removing an excessive number of command hooks and such), 3-4 coats on all the trim to get it from black to white, install door knobs she had removed, and epoxied the bathtub and blue tile walls in the bathroom. That was $3,732.

House 9

Water Heater

The hot water heater stopped working. We had it installed less than a year ago. We called the company to come look at it, and they agreed. Then that morning, no one showed up. When our property manager called to ask where they were, they said they don’t do that anymore. We called another company to come fix it, and they pointed out that it was installed incorrectly and the wires were rubbing, creating a short. We had that company fix it, and then I called the original company and asked for a reimbursement. They agreed, but it was a two month process before I received the check. That was $200 out of pocket, but was then paid back to us in full.

House 10

This one. Goodness. They build up their maintenance needs and then lay a bunch of problems on us at once. It’s frustrating, especially when it involves leaking water. They also pay their rent at 2 am on the late day so it’s technically late, but not worth me fighting over. They don’t maintain the house very well, and we’re just ready to be done with them.

Ceiling Fans

I have our handyman going out to fix two ceiling fans. One has a screw missing from the blade, and one has disconnected from the ceiling. I don’t know his cost for those items yet.

Plumbing

There was an issue with water leaking from one of the tubs and following the pipe system into the basement. A plumber fixed the leak from the tub faucet for $425.

There was a back up in the HVAC condensate line that we had our HVAC tech go out for, and that was $125.

House 11

Pests

We had to have pest control come out to address swarming termites, which has been a longstanding issue in this house, unfortunately. That was $98, which was truly just the renewal for the termites warranty. Then we had another issue with powder post beetles, and that was $185.

Honestly, this is where having several houses creates a benefit – we use this company for all our houses and all our partner’s houses. We didn’t pay the termite warranty for a few years on it because I actually didn’t get that paperwork (the $98 fee), and they let me pay up the years I missed to cover treatments currently). I had called at another point to schedule an inspection, and they said I had a balance so they couldn’t schedule anything until I paid the outstanding balance. Again, an issue with paperwork getting to me. The lady even said “we know you’re good for it, and we’d get in touch eventually.”

HVAC

Over the winter, the HVAC unit wasn’t heating. On March 2, the HVAC technician went out and discovered a dirty filter and had to clean the flame sensor. That cost us $223.

Then the HVAC wasn’t cooling this month. The same tech went out and discovered the condenser needed replaced. He did that, but then he left town without invoicing us, so I don’t have that invoice in hand yet. But now we’re having an issue with the house “sweating” that he’s going to look at this week.

House 12

Storm Damage: Tree removal, shingle replacement

The wind storm at the beginning of March took shingles off the back of the roof. Mr. ODA got up there and replaced about 12 shingles, which is a new skill set! As part of that storm, a small tree at the curb of the house fell over, so Mr. ODA cut that up and got it ready to be picked up. That cost us our time and $37 at Lowe’s on shingles.

Wildlife Removal

When I first met this tenant, she told me about how she had a raccoon in the attic. The property management company came to remove the animal (supposedly) and patch up the entrance point. They didn’t do a great job; the animal came back. She said she hadn’t seen it, but she has 5 cats (yes, lease violation) that are very alert. We hired a company to set a trap. After a week, they didn’t find an animal, so they patched up the hole. Setting the trap was $279, and patching the hole was $150.

House 13

Storm Damage: Siding repair

During another March storm, a piece of metal siding came loose on the house. Mr. ODA was able to go put it back in place, so this didn’t cost us anything except the mileage and time.

Electric Work

The tenant complained that one outlet wasn’t working. That didn’t add up. I had Mr. ODA go check on the electrical box while he was working on the siding, but he also saw that nothing was tripped. I had an electrician go out there. Turns out, there’s a second electric box on the house, and that breaker was tripped. You win some, you lose some. He charged me $100.

Tree Removal

The tenant had a tree fall along the back fence line. It took down some wires. We had the power company go out to check on it all, but they confirmed they’re not power lines and they’re cable lines. Since her internet/cable is working fine, it’s not a priority to remove the tree. I had a tree removal guy go out and look at it. Most of the tree is on the other side of the fence. He tried contacting that owner (there’s a rental sign outside the house) to gain access to remove the debris, but they haven’t responded. We had a huge storm come through a few weeks ago, and that has put her tree removal even lower on the list. Plus, she was rude to the tree guy, wouldn’t put up her dogs, and wouldn’t clean up the dog poop in the yard, so it’s not high on my priority list to get her taken care of either. Be a good person.

House 14

Tree on Roof

That big wind storm at the beginning of March took a tree down at this house. I struggled to get someone to help us. I finally posted on the local mom’s group, and someone spoke up that her husband’s business prioritizes trees on structures and would get there tomorrow. And that he did. He had the tree gone in a few hours and cleaned up the yard great. We then had to wait for the insurance adjuster to come out. Once they cleared us, we were able to repair the roof and gutter. For how big the tree was, the twiggy branches at the top was all that hit the house, so the damage was fairly minimal. This was all covered by insurance, so it didn’t cost us anything.

Water Leak

The tenants reached out to me that their water bill went from $50 to $400. They’re pretty self-sufficient and handy, so it was definitely a problem. I trusted that they were able to diagnose a running toilet or leak under a sink. It turns out the link was at the main water for the house. The plumber had to excavate the front yard and replace the entire pipe from the street to the house. I just got the bill, and it was $3,060.

Others – With no costs incurred yet, but will need action

House 6 has repairs that are needed, but the tenant hasn’t been available for the repairs and she has 2 or 3 big dogs, so we really need her home for us to enter the property. I also received notice from the insurance company that they want a railing installed on the front steps, so our handyman will handle that also.

House 7 has a flat roof over the laundry room. Before we bought the house, someone built a room on a covered deck – very poorly. It has leaked several times, and we have tried to find a roofer to help, but they don’t want to handle flat roofs. Mr. ODA shoved a bunch of silicone at the roof line, and it actually held for over a year. It finally leaked again recently. We started making calls and very explicitly stated that we don’t want the flat roof repaired, we want it built as an actual roof (because no one will touch a flat roof, and I had someone come out for a roof replacement and we didn’t know enough at the time to realize he wasn’t going to touch that part of the roof). We finally got two roofers to give us quotes. One seemed to completely not understand the request, and the other said $3,800. So we agreed to that quote and will hopefully have this behind us in the next month or so.

The Quiet Ones

House 3 has had to pay rent late a few times, but they always let me know in advance and I always waive their late fee.

House 8 has required zero effort. They pay rent in the final hours it’s due consistently, but they never need a reminder or follow up. This house isn’t in great shape, so it’s mildly concerning that we don’t hear from them for months on end, but I have enough to keep myself occupied at the moment.

I plan to do walk throughs and address a few issues at some of the Richmond houses later this summer. The last time I went through some of the houses was July 2021, and there have been instances that say tenants need to be checked up on. While many houses have had our handyman in it recently, I want to be more consistent on checking on them and letting them know I care what is going on.

That’s almost $10k that I’ve paid out so far this year on rental properties, with more invoices waiting to come in.

Here’s to hoping the second half of the yard is quieter than the first.

July Financial Update

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I looked back to last year’s July to see what was going on.

We had just bought our new house, demoed the master bathroom, and started painting a bunch of the new house. We were transporting two toddlers back and forth for all the work to be done. I was also talking about a vacant house and being rid of a non-rent-payer. The tenant that moved in then caused tens of thousands of damage with a burst pipe, and now we have a new renter in there.

And now…

We had a big wind storm come through on the 2nd. It knocked down several trees, including one on our deck. We’ve had 4 companies come out for quotes for replacement, and we’re waiting on the adjuster this week.

I have a whole separate post regarding all that’s going on with the rentals, so I’ll leave that for a separate post.

Most interesting to me is that in the last year, without any major moves (like purchasing a new rental house or paying off a mortgage), we’ve increased our net worth by over $300k. Looking back at July 2021, we’re almost $900k higher than then.

Since last month, we paid out a $22k bill that was owed from January for cleaning up the house that got flooded (there were several delays in insurance agreeing to the company’s invoice), but the market increases have netted us a gain of $16k still.

June Financial Update

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Gosh, where did I leave off?

Our savings account is still earning over 4% interest. Therefore, bills are being paid as close to the due date as possible, while we manage to keep the savings account balance higher. Back in December, we had a pipe burst in a rental house. The insurance quickly paid out on the estimated damages, but we didn’t need to pay the repair company in full until last week. Additionally, there was an issue with the invoice from the company that cleaned up the water, and so that was only just set to be paid today.

When we have large purchase(s) looming, we look to open a new credit card with rewards and 0% interest. We opened one last Fall, and I pay $500 towards it each statement cycle. I believe we have until October to pay in full before interest begins accruing. I’ll continue to pay $500 until I need to pay it in full in a few months (or if we need to reduce our debt usage because another house purchase is to be made … not that we have any plans to, but Mr. ODA is always looking).

We have a few projects lingering out there that will cost us a decent amount to accomplish (e.g., water main line repair, tree removal, new roof). We also don’t have any plans to make big financial moves in the near future (e.g., no home purchases, no loan pay offs).

The market has recovered in the past few months, so our net worth has made a jump. It’s the first decent increase in a while. Our cash has decreased, logically, since we were holding cash that was for accounts payable. Our credit card totals have decreased substantially since February as well.

February Financial Update

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Well, Mr. ODA didn’t like that I shared I didn’t know where our money was last month. They’re all kinds of Treasury accounts, and I’n just logging the transactions and leaving him to it. 🙂 I don’t have a lot of bandwidth these days, but I’m learning to juggle 3 kids and our finances.

PERSONAL FINANCES

We bought a new van this month. We’ve been wanting a new one for a while now. We bought our 2017 Pacifica in September 2020. It was a great deal, and it was a necessity as we were about to spend 7 weeks “homeless” and AirBnB/couch hoping. The car had some defects. We decided we’d keep an eye out for a newer version. Suddenly, Mr. ODA found a good deal on a 2020 Pacifica that had more options than we were actually looking for. We drove to Ohio about 36 hours later. They made us a good deal for our trade-in, and we went home with a new van! We put some of the purchase on two credit cards and then the balance with a personal check.

We’re currently paying close attention to credit card deadlines and our savings account. Where I used to pay a credit card bill almost after the statement closed so that it wasn’t hanging out there and I wouldn’t accidentally miss a deadline, I’m now leaving money in our savings account as long as possible. Our savings account is now earning 4% on the balance, so we’re seeing a significant amount of interest each month. I’m juggling managing our bills as close to their due date as possible, while also projecting future bills necessary since there’s a limit of 6 transfers out of the savings account per month.

All that was to point out that our credit card balances are high right now because of the van purchase, but the credit card statement hasn’t closed yet. Instead of paying the credit card balances down right now, the money is sitting in savings earning interest for 4-6 weeks between the purchase, to the statement closing, to the statement’s due date. More directly, we put $3,000 on one credit card for the van purchase. That was on 2/7. That statement, once it closes, will not have a due date until 4/20. That means that the money put on the credit card can sit in savings earning interest for about 70 days.

We also had to pay the initial payment for the restoration services on the rental that had a burst pipe. So while the insurance company sent us a check to cover the cost of this work, it’s still $17k sitting on our credit card, not being paid until the last minute. I should also note that our cash balance is inflated by about $50k because it’s the money from the insurance company that we’re waiting to pay the contractor as milestones are completed.

Had I seemed nonchalant about the plan? Because I’m definitely not. 🙂 I need to stay on top of how many transfers happen per month out of the savings account (while Mr. ODA randomly pulls money for investments), and not miss any deadlines and cost us interest charges or late payment marks on our credit. It’s stressful! Since we’re not doing anything that requires our credit to be pulled right now, it’s fine. If we were having our credit checked, having multiple cards nearly maxed out would be a problem. But we know we have the cash available to pay off all the credit cards if we needed to.

RENTAL FINANCES

I finally got through to someone on the issue with the improperly installed water heater. He says he submitted all the paperwork to send us a check for $200 to cover the plumber we paid to fix their issue. I haven’t seen any paperwork, nor have I received the check, but I’ll keep it on my radar and follow up in a couple of weeks.

I made all the decisions on the restoration of our flooded house. We’re expecting to hear a timeline for work to start next week, and then it’ll take about 40 working days to get the work done.

I paid a warranty for termites on another house. We had an infestation when we purchased the house, but we didn’t pay the warranty information. Our tenants found swarmers, and when we called to ask about treatment, they said they’d let us backpay the warranty and invoke that. We have a good relationship with this company and appreciated that offer, so we’re staying on top of the warranty payments now. The payment is $98 per year.

We received a surprise in the mail – the tenant had turned off the electric in the flooded house back on January 12th. The power company is supposed to notify me. I received an email on February 6th notifying me of an action on the account. So this was in my name from 1/12 to 2/1 for me to be billed $255 without my knowledge. Not to mention, there’s a bill hanging out there from 2/2 until the present that I’ll also get billed for. Mr. ODA sent our property management excerpts from the lease indicating that the utilities must be in their name for the entirety of the lease, that they’re responsible for this bill, and that they must get it back in their name immediately. We’ll see how that plays out.

RENTAL WORK

I picked up the keys from our property manager for the 3 houses I took over managing. I also worked on a rental here in town this week, which took about an hour including travel time, and I have another to work on later this week, which will be about 2 hours worth of work.

I sent a prospective tenant the pre-application we have, which he passed, so I sent him the application to submit. If all goes well, we’ll have that house re-rented with no vacancy period.

We have 3 leases that end at the end of April. We put a requirement that tenants give us 60 days notice, or that we give 60 days notice of any changes. That means that these leases need acknowledgement by the end of this month. So I ran the analysis on those 3 houses. We decided to increase the rent on 2 of them by $50 per month, each, and we’ll keep another house the same since it was increased last year. One house actually had an increase last year, but that house is well below market value, so we’re offering them to continue the lease with an increase because if they were to move out, we could get even more from the house based on it’s size and demographics. The 2 houses we’re increasing have a property manager, so she’s responsible for notification and signing an addendum before the end of the month. But once again, I need to manage the property manager and ensure we have action on time.

NET WORTH

January Financial Update

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Life is different these days. Our 3rd child was born on Thanksgiving, and we’ve been finishing up some projects around the house. We’ve had a few things happen with rentals, and, basically, I’m just tapped out to keep up with blogging. Mr. ODA asked me what our net worth is at these days, and so I’m updating our spreadsheet.

“JANUARY”

It’s January, so that means I have to create my two main Excel workbooks for the year: the paycheck to paycheck monitoring of our expected income and expenses, and the management of each rental property. The paycheck to paycheck spreadsheet is where I have a line item for each house’s rental income each month, each house’s mortgage payment (where applicable), and then all our bills owed (credit cards, utilities, investments). I break this down by paycheck because that’s the easiest way for me to make sure I have enough income to offset the bills owed during that two-week period. That worksheet in that workbook feeds my net worth calculations, where I also update loan balances. There is actually several tabs in this workbook, but those are the main two. I finally got that all set up today. I haven’t even started creating the investment property workbook.

January also means I have to go through last year’s investment property workbook to verify all the expenses listed are supported by receipts, that all receipts I have are recorded, and that my income is accurate. Then I read off the data to Mr. ODA, who enters it into an online tax portal to file our taxes. I haven’t started that daunting task either.

RENTALS

We had one of our properties flooded by a burst pipe. That’s a mess and is hardly making progress because the tenant’s renters insurance can’t get the tenant property out of the house. We had an electrical issue with a hot water heater in another property. That got fixed, but now I am in a position where I have to fight Home Depot about their shoddy installation a year ago and have them reimburse the cost of rewiring. I finally moved forward with the judgement against a tenant for destruction of property, and our attorney established that collections account.

Surprisingly, we didn’t have any issues with rent payments in December or January. Usually I hear from one or two houses that they need a couple of weeks to pay all of rent. While not everyone was on time, they communicated well and were only a few days late. One tenant reached out and asked if they could pay rent on the 6th (since that’s Friday, and pay day); I told them not to worry about the late fee and that would be fine. Little gestures like that can make a big difference for your tenant’s life.

I sent a letter to our property manager for the KY houses that we’re releasing them at the end of this month, so that’s a new development that is taking my time as well. You’d think my property management company would have a way to communicate this change with the tenants, but alas, that would be too logical. Wish me luck while I add 3 more houses under my own purview. While we moved to KY two years ago, it was easier to maintain status quo with having a property manager. Unfortunately, it has taken too much of my effort to manage the property manager and to fight for our money.

PERSONAL

We finished our master bathroom in the home we bought over the summer (and the room we gutted immediately… only took 6 months to get us to the finish line… and by finish line, there’s still paint touch ups to be had). We bought all the supplies to gut and renovate the basement bathroom in this house. Mr. ODA built a bench for our kitchen table so that we have more seating easier. We made the plans to get the mudroom bench and shelves in, and hopefully those supplies will be bought this weekend.

Truthfully, while I updated most of my net worth spreadsheet in December, I never posted it because I don’t even know where all our money is. When we sold our personal residence at the beginning of November, we were handed a large check. In the past, that check type mostly went towards a downpayment on a new house, but that wasn’t the case this time. Mr. ODA immediately started investing that money in short term treasury accounts that I can’t even begin to explain. Between that account, another savings type account, and our regular investment account, I can update what I see online, but I don’t know what I may be missing. I’m hoping Mr. ODA will chime in soon to describe the type of investment decisions he’s made.

NET WORTH

Several property value assessments declined over the last couple of months. So while our investments are on the upswing from November’s update, those updates to property values have caused a decrease to our net worth.

November Financial Update

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Phew – 3rd month in a row of only a financial update. My apologies! Again, we’ve been juggling two houses, construction work on the new house, two toddlers, and my being pregnant (and exhausted).

At the beginning of the month, we closed on our old home. It wasn’t an easy process (as usual) with the title company, even down to having the wrong amount on the check at the closing table, but it all worked out. Being free of that burden has been lovely. We immediately cashed the check, but it’ll have to be a separate post for what we did (and are planning to do) with those proceeds.

RENTAL PROPERTIES

We had our court date on November 1st for the tenant that left a house with garbage and damage. She didn’t show (after providing us a fake address), so the judge ruled in our favor for the full judgement. She then has 10 days to appeal. We’re beyond that window, so I now reach out to her to establish a payment plan. If she doesn’t respond, then I file it with our attorney to proceed with garnishment.

We had a few small items to pay for with the rentals, but we have everyone’s rent that was due by now. I typically expect to see more late payments in December and January with the holidays.

NET WORTH

We’re still carrying a high balance on a 0% interest credit card. I did pay off a card that had a payment plan on it (it was free, and why not … except, I was tired of figuring out and managing new purchases versus the payment plan portion, so I just paid it all off once our proceeds came in; it was about $1100).

Our investments recovered in the market from last month, and we significantly increased the balance in our taxable accounts and cash due to investments from the proceeds of our sale.