Personal Finance Overview 7/17/18

Personal finances overview for this summer:

Have you ever taken a hard look at your personal finances? I mean a hard look, like track every transaction, every paycheck, every bill you pay? Two years ago, I started tracking my personal finances during my co-op and internships. It has really opened my eyes to what I spend money on every day and gives me a better idea of where I am at with my finances. Let’s look at how I’ve been doing this summer!

finances

Above is a snip of my master spreadsheet for this summer. It contains all my expenses, paychecks, investments, some of my goals etc. Let’s go over this briefly to get a sense of what is going on. In color coded column is a category, from left to right: food, gas, fun, gym, girlfriend, bullshit. Sorry you’ve got your own column Nikki, but you cost some money and I’m not going to put you down at the bullshit level.

Anyways let’s analyze each column starting with food. Obviously, this is critical as you need food to survive and it’s a very basic need, I have included any eating out (fast food, restaurants etc.) as well as coffee and energy drinks and things of that nature. I work from my car and my job is pretty demanding out in the heat and having considerable amounts of energy is vital to my success so while I could opt for cheaper energy substitutions (majority of my coffee is from Starbucks) it is a necessary evil for me to preform well. Considering all of that, I average just under $300 a month over a 2-month span for my food consumption and it will hopefully taper down to $250 when I near the end of the summer.

Next up is gas, again a very necessary portion of my job is I must drive a lot and I also travel back home and back to school on occasion (200+ mile trips one way). At just under $200 a month on gas, I do go back to STL this upcoming weekend but that should be my last trip home besides actually going home for the summer, hopefully we can reduce that expenditure a tad and I can drive more efficiently.

Fun money! This is the column I try to minimize the most, as you can see I have some of paid subscription services but in my defense, I pay for the Netflix for my whole family and my brother and I use Spotify and I pay for it all. But besides that, you see alcohol and tobacco costs taking up the bulk of this column, I will have a substantial increase here as I will be paying for copious amounts of alcohol this weekend. Its gonna be litty titty.  This column will make its way up to $200 a month without a doubt here shortly.

Gym: If you didn’t already know my health and fitness is very important to me as I am a rugby player and have been lifting all my teenage years. The gym membership was a large upfront cost and I should have enough supplements to get me through the rest of the summer, hopefully this column ends at about $60-75 a month in costs.

Girlfriend: Sorry not sorry but you cost me some money this summer babe. Mainly in plane tickets to vacation but also lots of food and nice little gifts. Again, I wasn’t going to put it in the bullshit column so it gets its own column. There probably won’t be any additions to this column for the remainder of the summer so hopefully ending around $200 a month on this one.

Bullshit: this one is a toughie. To preface, this isn’t all bullshit like obviously I need to pay rent and to live somewhere but that’s what I called the column even when I wasn’t paying rent, so I stuck with the title. As you can see we have a deposit and lots of rent, I am paying 2 rents right now, one for Rolla (college town) and one for here in KC this summer. That started in July and my KC august rent will be low and the Rolla rent will increase slightly so it’ll lighten the load overall, but July rent sucked up a lot of my money. We have electric and internet bills, they both had start up fees, so they have since flatlined and we’ll only need to pay another month of two of those. Some of my supplies for work cost me a decent chunk of change including ladders, shoes, clothes, but those can be tax write offs as well. I also got my first ever speeding ticket this year which cost me $220 to get it moved to a non-moving violation. Anyways this is the largest chunk of my costs but hopefully with august being a short month it will taper down, and I can get my deposit back and we can wash our hands of this.

As of today July 17, 2018, my monthly costs of living is $2,134.50, I’m not sure if that is a lot or a little compared to most of the people reading this. I don’t have kids, I live in a cockroach invested shit hole of an apartment, I am partially paying for two rents, I eat cheap, etc. My assumption would be yes this is very cheap cost of living. I would like to reduce it further though. As I’ve stated above for some of the columns they should not increase anymore and as father time keeps ticking my avg cost per month will reduce. I had the goal of $1500 a month this summer however that was way underestimated and simply won’t be possible, I would like to have a cost of living under $2,000 though I think that would be very reasonable considering the circumstances.

My monthly conversion for what I am paid comes out to $3,033 a month. To me this is extremely low and pisses me off, (salary equivalent = $36,400) because I made $50k salary + living stipend last summer, and I am working significantly harder than I did last summer. My numbers should bump up soon and I will get a bonus as well at the end of the summer which will help. My goal was to make an equivalent of $60,000 salary from this job and I am very very far behind that goal.

As always let me know what you think!

Do you keep track of your personal finances? Do you keep track like this?

Could you benefit from tracking like this?

How do your expenses compare with your income?

Thanks, B^2

 

 

June through Mid-July Goal Update

Alright folks its been a little bit for this one so let’s get to it. When we last left off I was getting my shit rocked by the amount of work I was doing outside of work in terms of our training program and my other obligations. Since then I have been doing better rearranging my schedule to manage my time (working out at night now) and trying to get everything done. I also went on vacation and started taking days off here and there. Nothing too crazy but I was realizing the 11-day work benders I was doing was affecting my performance.

For June I went back to the full month goal schedule, at that point in time I was still overwhelmed with trying to get everything done. As you can see in the photo below I was very ambitious and thought I was going to absolutely kill it. Increasing my net worth by $6k, 30 sales, banking tons in lending club and my Discover savings account and restructuring my robinhood account to grow dividends.

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As you can see below, we got our shit kind of rocked, I did hit some goals but anything money related was not achieved and then as always, I struggle to post enough on the blog.

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This is a great segway into this current goal update. I went back to biweekly thinking that I push very hard at the end of the goal term (student effect/procrastination) so the more frequently I have deadlines on these goals the more frequently I will push to get them done. Another part of this goal session was the vacation, now its been a very long time since I’ve been on a vacation like the one I went on and I thought I could get a lot done. I was very wrong about that, if I made it a priority to get a lot done I could have but I failed to do so. As a result, this week has been very stressful from the fast paced intense 16-18-hour days I’m putting in with very little down time or breaks, as well as the mounting pressure to finish the summer strong as its rapidly coming to an end and I’m failing to meet my goals.

As you can see below we didn’t quite finish where I wanted to. Close on some, barely advancing from the previous goal session on some. Overall a failure in my mind and a great motivator to achieve more and taking massive action to achieve these goals. I’ll rethink where I want to end up and how I’m going to get there tonight and what steps I need to take to achieve that. We will continue to go with biweekly goals however there will only be 2 left before the end of my summer, its the red-zone, and the clock is ticking. I can post and tweet and write to my hearts content while I am at school, but I can’t sell roofs when I’m at school so that will be my primary focus.

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As always thanks for reading and supporting my efforts on the various social media platforms and all. Let me know what you think!

B^2

 

Premier Roofing Update

How everyone is doing well I’m sorry its been awhile, while blogging and the content I am trying to deliver is one of my goals I’ve been more preoccupied with work and building my Instagram platform. Anyways as I write this post I have 22 sales with 3 dead. Its rather unfortunate as there is a tier at 25 sales which I wanted to hit about 2 weeks ago but I am still slowly struggling to get there. Several issues which have led to this, I have taken days off that I shouldn’t have, I’ve had other commitments on the weekends that took away from my time on the street. I am currently on my way back from a week-long vacation as well which has obviously taken away from my sales potential. I’ve also had sales fall through via failed inspections, cancelling the contract etc. Ultimately it is my fault for my shortcomings however some of the circumstances are out of my control.

Looking forward, I’ve had 3 builds completed and two more coming up this next week. Builds in general help me out with closing the deals in the surrounding areas, another opportunity to provide an excellent customer service experience, and of course my commission off the build ($200).

This next week I had a potential $1400 to be made as well as $1200 that I am waiting on an email for, hopefully we can get that all closed here shortly. I finished this last week up at $1300 and had a terrible week prior to that finishing at $100. Ultimately, I need to make over $1500 a week from this point on + my bonus to make up for the disappointing performance and hit my breakeven point ($14000). It may take less than that to reach a break even point (I apparently get some very nice tax breaks that I didn’t have at my previous job) which could make it easier to break even in comparison to the previous summer.

I want to finish this week with over 25 sales, I have an estimated $1400 on the table however I want to make more than that as I need to average approx. $1500 the rest of the summer. I’d also like to get my $1200 deal completed so I can move on with the builds for those before I leave for the summer.

I’ll do my best to keep you all updated as we progress and keep crushing goals throughout the summer and the foreseeable future.

As always feel free to leave a comment, I’d love to hear what you think!

Thanks, B^2

Leadership Positions that have Advanced my Life

In my life I’ve been fortunate enough to have plenty of leadership opportunities and I have taken advantage of them to further my personal development. Today I will be analyzing a few of them to give some better insight as to how they developed the person I am today, what knowledge and lessons I took away from them, and how you can also get involved and become a leader in your own field of interest.

Let’s start way back to boy scouts, for those of you who don’t know what the Boy Scouts of America (BSA), “The BSA’s goal is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. For younger members, the Scout method is part of the program to instill typical Scouting values such as trustworthiness, good citizenship, and outdoors skills, through a variety of activities such as camping, aquatics, and hiking.” – Wikipedia

I was involved in Boy Scouts all my life essentially, from a Cub Scout when I was in first grade all the way to Eagle Scout at 17 years old. Through my time there as it mentions above I learned a lot and I put myself in positions to further develop my character. These include, Patrol Leader, Senior Patrol Leader, and Junior Assistant Scout Master. To break down some of these further clarify the situation, Patrol leader essentially led a patrol (for us that was between 8-15 scouts) and you were responsible for your patrol on camping trips, each patrol was responsible for cooking their own food, cleaning up their own mess etc. Senior Patrol leader oversaw all the patrols that comprised the troop (we normally had between 3 and 4 patrols), your job was to ensure all the patrols were functioning accordingly. Junior Assistant Scout Master was a position that brought me another tier above Senior Patrol Leader and I assisted the SPL in making decisions and relaying information to the Scout Master.

Through all these positions you had to effectively communicate to your peers who were both younger and older than you were, as well as adult leaders in the troop. You were essentially responsible that the young men you oversaw were doing their part and contributing to the task at hand. As you advanced through the ranks you started leading by example and teaching the younger guys what they needed to do and how to do it. Although everyone in the world at the time thought Boy Scouts were gay and it was a stupid program, I had incredible opportunities to travel and do cool things (white water rafting, snow skiing, Pike’s Peak, hiking, climbing, canoeing, archery, rifle and shotgun shooting etc.) that other kids didn’t have the opportunity to do. That in addition to vast amount of survival skills and knowledge I accumulated I also was able to develop leadership skills that others forsake. This also lead into my other leadership roles and opportunities later in life that we will now go over.

Next, was High School Wrestling captain. This wasn’t as involved as the Boy Scout leadership positions that I had previously, but it did mean something. Essentially you ran warm ups for practice assisted the coach in demonstrations and provided advice and inspiration to those around you. This position required very little outside work that wasn’t already required to be a starting varsity wrestler, not much to say about this. In other sports Team Captain may have some more meaning however wrestling is both individual and team oriented but more so individual.

Next up would be involving my Fraternity in my currently ongoing college career. As I write I still have 2 more semesters to go with 12 and 9 credit hours respectively. I have been a part of Sigma Chi Fraternity since my freshman year in the Fall of 2014 and am still heavily involved in the fraternity even as I approach my 5th and final year. I have held a ton of positions for the fraternity including, Recruitment chair, Greek week chair, Social chair, Vice President, houseman, Philanthropy Chair, and brotherhood chair. While there is leadership and character development in all of those positions I want to focus on Vice President as the primary one.

As Vice President I essentially oversaw internal operations of the chapter, ran the executive committee and its meetings, ran the post initiation training of newly initiated brothers, oversaw all the committee positions. It was quite an interesting year in my position, possibly the hardest terms as Vice President we’ve ever had to deal with. We had several executive members get co-op (extended internships) after they were already elected so we had to elect new exec members, we had new national policies implemented that nobody saw coming, had to drop several people from their committee positions due to grades, overcommitted and unable to do fulfill their position. It was a mess and I was already under a strenuous workload and amount of stress. We did survive, and I think we turned out better than we started but It wasn’t easy and really challenged me.

Couple things I learned, things can and do go wrong (shit happens, get ready to roll with the punches and adapt). People suck, I don’t say this to be mean, but people tend to be forgetful and take the easy way out when they can which puts more strain on you. Another important lesson I use was taught to me when I was a pledge and it was an adaptation of this parable.

 

“Os Hillman tells the story of a rider on horseback, who many years ago, came across a squad of soldiers who were trying to move a heavy piece of timber.

A corporal stood by, giving lordly orders to “Heave.”

But the piece of timber was too heavy for the squad.

“Why don’t you help them?” asked the quiet man on the horse, addressing the important corporal.

“Me?  Why, I’m a corporal sir!”

Dismounting, the stranger carefully took his place with the soldiers.

“Now, all together boys – heave!” he said.  And the big piece of timber slid into place.

The stranger mounted his horse and addressed the corporal.  “The next time you have a piece of timber for your men to handle, corporal, send for your commander-in-chief.”

The horseman was George Washington, the first American President.

I love this story as it reminds me that leadership isn’t barking orders at your staff, it’s helping them with the heavy lifting.

 

It simply states that the leader must also contribute and do the heavy lifting just like the men he leads. The same applies to the fraternity and leading by example. While we are not a large chapter we stand around 50 members give or take, so within that group there are young men of different temperaments, talents and convictions that must be handled in separate ways when issues arise. I learned how to cater to different people’s temperaments from the shy quiet freshman who was underperforming to the drunk disorderly super senior enjoying his last hurrah.

The last leadership position I currently partake in is Missouri S&T Miner Rugby captain. Now I have been in this position for a solid year perhaps longer. I think I was unofficially the captain for a little bit but for the last 2 semesters that was made clear. This is an interesting one because there are many positions and situations I am faced with. To my team on the field, I make the play calls and control the game. To the Sir (the referee) I communicate all issues that my teammates bring to me and express my concerns with the Sir. I sometimes take a back seat on practices and let the president make the calls on that but I voice my opinion on that as well. After the game, I am no different than anyone else on the team, there to have a good time and enjoy the spoils of victory.

Again, there is a lot to be learned from this position, I address my teammates on the field on game day much differently than at practice. I also address the sir differently than my teammates. I juggle between who needs to get more playing time and who needs to get on the field to deliver the best performance.

Overall, I have been a leader in many aspects of my life, all different, all unique in their on way. I think that it is important to have that diversity because it gives you more tools in your toolbox to handle the different situations you may face out in the real world. It also presents you with various challenges that will build your character and your problem-solving abilities as you struggle between the pros and cons of situations. I would highly suggest getting involved in some organization, club, sport etc. that you enjoy and look for a meaningful way to contribute whether that would be a leadership position such as the ones I’ve mentioned above, or a minor position. Getting involved, developing communication, problem solving, and leadership skills will make a lasting impact and help prepare you for your future endeavors in your career or activities later in life. Take advantage of the opportunities that are available to you now rather than wasting away your time, because in 10 years the lessons you learned from getting involved will get you further than that tv episode you watched.

As always, feel free to leave a comment below I would love to hear from your guys!

B^2

 

Premier Roofing week 4 and 5

Well it’s been an interesting one.

Let’s see we sandbagged week 4 because I couldn’t really get anything going, it was the weird middle ground of running out of potential customers on my old street and just starting out a new street and trying to earn the trust of my customers in the area. I only had 1 sale and 1 PFYNR ($300 total) for that week and we pushed those onto week 5.

Now week 5 gets me heated. Very heated. It turned out well I made $1100 on the week but in all honesty, it should’ve been around a $1500 week. The last $400 could have been made up very easily with some customers doing their part and communicating with me. It would have worked out much better on both of our ends. That was very frustrating but now the wheels are turning on this beast of a position I am in. Week 5’s slightly disappointing results should lead into a stellar week 6. I would like to finish the week at $2,000 but we will see how we do, as I’ve mentioned previously some of this is simply out of my control. I mean when I call and text a customer 3 separate times over the course of 5 days for some information and they don’t deliver it to me and I knock on their door trying to get a hold of them there’s not much more I can do.

I also can’t control when my supervisor gets his paperwork and estimates together, I am waiting on two of those to be completed to schedule 2 PFYNR’s this week. Either way though, I have finally been gaining traction and gaining momentum in the areas I’ve been working in. With my first build happening on Wednesday this week and several insurance inspections already scheduled for Monday, Tuesday and possibly Wednesday we should be getting well on our way here shortly.

A couple more street signs, couple more claims approved, couple more builds and we will be moving forward with so much momentum and reach that I will be pulling money in hopefully. It was just a shame that we ran into some claims that didn’t go through because of bad luck, lack of communication, and drones that don’t do a very good job at inspecting. Either way we’ll keep pushing on like we always have.

This is absolutely needed because I am well below what I need to average to make the equivalent amount that I did last summer. I will do my best to update you but definitely check out my twitter @bsquaredweb10, my Instagram @ bsquared.website and of course this blog.

I will be doing my best to keep the content rolling and keep providing value and inspiration to my followers. I had a message in my inbox for a while on Instagram (it was in the requested message potion, sorry it took 3 weeks for me to notice it!) and it was the first time that someone said they actively followed me and were inspired by what I was doing and was asking what they should be doing. That was a huge honor for me and I hope I can inspire and help others soon!

Rental Property Empire

I gotta be honest this really was a rough one. This book is loaded with quality information, but it is so dense and tough to read and to write about and I’m going to apologize for this on in advance. The reading time suggested on this book is 6 hours and 57 minutes at 332 pages. It took me two goal periods to do it as well because I was a chore to read but I finished it. I never gave up on it, I will give a quick summary just to keep myself honest with you guys, but I think your time would be better spent watching some YouTube videos or doing specific research online rather than read this book just because it would be much more enjoyable and quicker.

Build a Rental Property Empire: The no-nonsense book on finding deals, financing the right way, and managing wisely by Mark Ferguson. You can follow Mark’s blog at Investfourmore.com

Career highlights: Owns 16 rentals which generate $8,000 monthly income and have $1.6 million in equity. Flips 10-20 houses per year with averaged profit of $30,000 each. Started InvestFourMore.com real estate blog in 2013 and gets over 300,000 views a month.

“If you focus on mastering one thing, you will be much more successful than if you halfway do 10 things at once.”

Chapter 1: Why Rental Properties Will Help You Retire Faster than Investing in the Stock Market.

Mark goes very deep in this chapter and considers historical return rates, inflation, his personal surveys he’s conducted, tax benefits, outliving retirement etc. I’ll quickly summarize this Real Estate produces more cash flow than the equivalent investment in dividend paying stocks. Real estate also appreciates consistently in the long term just like the stock market does. You can retire earlier than 65 with real estate, in fact you can “retire” when your passive rental property income exceeds your living expenses. Because dividend paying stocks, bonds, savings accounts etc. can not keep up with your living expenses you will have to withdraw money from those accounts, once they are depleted you are simply out of money. If you have rental property which generates income above your living expenses than if those rentals are occupied and paying rent, you will be able to live off the cash flow without tapping into the foundational equity (selling the property). People are living longer than they were before, so it is not unlikely that my generation (currently 22 years old) could have a life expectancy of 90+ years and you wouldn’t want to run out of money during your retirement.

Chapter 2: What are the Risks of Investing in Real Estate?

I’m sure you’ve all seen it before, the little disclaimer saying something to the effect that all investments carry a certain amount of risk and the investor should be aware of that risk. Rental properties are no different as they are just as much of an investment as a stock, bond, bitcoin etc. I believe the risk is lower than some of the previously mentioned and here’s why. A stock can go to zero, if a company goes bankrupt a stock can go to zero or near zero levels, resulting in 99% loss. They don’t make any more land, the very land that your property sits on has some inherit value because there is a limited amount of land in the world and as the human population continues to grow we need to utilize the land for some productive use whether for living or growing food or infrastructure. The exception would be if you had a hazardous waste situation or radioactive event on the land (think Chernobyl) which would render the land useless for some long stretch of time. So looking at the worst case scenario real estate already is winning. Another aspect is people always need a place to live, they may not always need to product or service that a company provides (think typewriters). These are the extreme scenarios now let’s get into the more common ones. Often people over estimate their returns and revenue, they may forget or underestimate the costs to acquire the property and or renovate it. In general, when doing the number crunching for a property it would be wise to use worse case scenario numbers and incorporate buffer into your calculations. Your rental property needs to be cash flow positive from day 1 and you should not count on appreciation for your pay out because that may never happen with the changing market conditions.  Another money related risk people don’t consider is having funds in reserve, typically banks require 6 months of mortgage payments in reserve on all properties. Besides that, you should always have some extra cash on hand in case the renovations or repairs are costlier than anticipated.

“Resistance is a sign that you are close to your goals and close to a breakthrough” I believe that with all my heart, as this internship I am currently working as well as life has taught me that this is very true.

“The key to any successful real estate investing strategy is to purchase properties below market value.” This is because you receive instant equity, for example if a house’s market value is $100,000 and you can purchase it for $90,000, while the cash is not in your pocket you have effectively made $10,000 from that deal.

“A great piece of advice I recently heard is to never work below your income. If you are worth $100 per hour, do not do tasks you can delegate for $20 an hour. Focus on things that make you that $100 per hour or more and let someone else do the less important work.” This is just sound advice to anyone making elevated levels of income and are looking to grow. The $40 you save every week by cutting your own grass, while frugal, could be hurting you overall if that time could be better spent developing your business, making more sales, expanding your presence in the community/social media.

Chapter 3: How do you know what makes a good rental property Investment?

  • Did I buy it below market value and by how much?
  • How much does it cash flow each month?
  • What are my cash-on-cash returns?
  • What do the prospects look like for the market in which I am buying?

You can use his cash flow calculator on his blog to help calculate that. He also goes over how he accounts for vacancies (table shown below), and maintenance (table shown below.

Vacancies:

Single Family 5%
College Rental 10%
Multifamily 10%

Maintenance:

Good Average Needs Work
0-10 Years 5% 10% 15%
10-50 years 10% 15% 20%
50 Years + 15% 20% 25%

He also suggests not using blanket rules to determine profitability, because they simply aren’t accurate enough and do not account for all situations. This means that you’re going to need to do some number crunching.

Here’s a simple rule to avoid losing your property to foreclosure, “buy for cash flow, have reserves, and don’t expect appreciation as your only way to make money.” Mark states that his target for cash flow is $500 a month for the $80,000 – $140,000 properties he buys and likes to see a 15% cash on cash return but prefers closer to 20%. Don’t worry about your cash on cash return until all expenses are paid, and the house is rented. Until that happens you’re only guessing.

Chapter 4: How do you Know what type of investment property to buy?

Mark analyzes single family vs. multi-family vs. college rentals. Essentially its best to invest in the type of property the follows the above-mentioned criteria in chapter 3. Not all areas are going to be the same. You may be able to get single family homes below market value in Colorado, but perhaps multi-family complexes are cheap in Illinois, and a recent state college has had enrollment increase 5% for consecutive years and the college rentals are dirt cheap in the area with rising rents. All situations are different, but I can review the pros and cons of each type of property. Single family generally have better vacancy rates and less turnover than the other two. They also have plenty of opportunity to be bought below market value. The multifamily buildings have multiple tenants so if there is a vacancy it is not a 0 or 100% situation. That as well as in today’s market climate people tend to move more often and apartments are becoming more popular. College rentals typically can get higher rent rates than the previously mentioned types of properties however they typically require more maintenance costs. I am very interested in college rentals however due to my feeder system for people to move into it as well as my love for my fraternity and my college town. There is a lot of detail in this chapter in fact according to my kindle it takes 45 minutes to read this chapter. Condo’s, HOA, vacation real estate, commercial real estate, CAP rate, what neighborhood to buy in, and more are included in this chapter.

Expenses that should be included in the calculations are:

  • Property taxes
  • Property Insurance
  • Property Management Fees
  • Utilities paid by property owner
  • Ongoing maintenance paid by property owner
  • Vacancies
  • Expected maintenance expenses
  • HOA fees
  • Any onsite management

Neighborhood characteristics:

  • Crime rates
  • School ratings
  • House prices
  • Age of houses
  • Size of houses
  • Size of the town
  • Proximity to large populations areas
  • Local economy
  • HOA’s
  • Types of houses (multifamily or single-family)
  • Tax rates

Chapter 5: How do you buy real estate below market value?

Mark suggests using a professional opinion to figure out market value of properties. “I would not trust Zillow to provide house values, although you can get some great information from Zillow.” Mark goes in depth on how exactly to buy homes below market value in short sales, HUD homes, banked own properties, how to get great deals from the MLS etc. Some notes that I have highlighted are, “with rising prices, real estate agents or sellers sometimes underprice houses.” “If a real estate agent is not paying attention to market price increases; if a house needs some work or if the sellers simply want to sell their house quickly, it could mean opportunity for investors.” Speed often is the difference between getting a great deal and missing out, a bidding war indicates that a house is priced great and many people want it.

Some things to look for include: Aged listings, MLS comments, Fast price changes, back on the market. “Do not give up if another offer is accepted, and do not burn bridges.” Again, this is a 45-minute chapter with lots of detail, so I will again highlight some of the key points.

“When you talk to a seller, you want to highlight the advantages of selling to you:

  • No repairs needed
  • No commissions
  • No closing costs
  • Fast closing
  • Cash Closing
  • No showings
  • No appraisal

Successful investors know their market like no on else, and they are honest and follow through on deals if they say they will buy a house.

Chapter 6: How to finance and pay for Rental properties.

In this chapter Mark discusses financing vs. cash deals, highlighting the use of leverage and the ability to acquire more properties in a shorter amount of time. As far as how much money you will need to start investing in rental properties typically 20-25% down is typical, from there closing cost, repair cost, carrying cost are all needed. Typically, the bank requires 6 months of payment reserves and you must also need adequate cash for any major repairs that may arise. Good credit scores and financial stability are of course desired for financing, most lenders want to see a debt-to-income ratio of 45% or lower.  He then goes in depth on various loans and how to improve your debt to income ratio, and various loan alternative.

Chapter 7: How to invest in rental properties with less cash

There are various no or low money down alternatives to real estate investing, but due diligence is certainly required. There is also hard money, house hacking, private money, turn key rental properties, seller financing, partnerships, using credit cards for cash advances, a 401k, and cash out refinance. Usually standard financing practices are better than the above mentioned, less headache hassle and risk.

Chapter 8: How to repair and maintain rental properties

Typically, Mark spends less money on long term rentals in terms of repairs than his fix and flips. Renters typically are not as picky as buyers which also helps with this. In a flip he repairs and updates nearly everything, in a rental its what’s needed. Finding a great contractor is vital and most investors are not well suited to do the repairs themselves in terms of opportunity cost and how well they can do the work versus a professional. Constant communication between you and the contractor is vital as it will affect the quality and time it takes to do the work.

Chapter 9: How to manage your rental properties

Most of the time it takes to manage rental properties happens at the beginning when it comes to finding tenants, the repair process etc. Once that has been completed it takes much less time to manage, however, once you have four or more you should consider hiring additional help. You may open a can of worms if you do not have enough time to screen tenants and check your properties. Proper due diligence is needed to find good property management, as with all things involving real estate, taking the cheap way may cause more headache than necessary.

Chapter 10: What are the different exit strategies with Rental Properties

There are several exit strategies to consider, sell the property and pay closing costs and taxes, 1031 exchange the property for a similar one, pay off the mortgage early and sell. All of these are again discussed in detail, a quick note on paying the mortgage off early, if you plan to keep buying rentals I would not recommend because you’re wasting prime cash to pay the down payment on your next purchase. Also, debt that makes more than the interest on the note is good debt and leverages your returns. The only negative aspect of incurring multiple loans on rentals is your debt-to-income ratio increases which may make it difficult to obtain another loan.

Chapter 11: How to buy rentals in an expensive market

For one the cost associated with selling your rentals, the taxes you’d have to pay, closing costs, the headache and hassle often isn’t worth the gain from appreciation, and the lack of steady cash flow that you’ve been receiving. If your market is overpriced you may need to look at turnkey rentals, however this makes it very difficult in executing the purchase, knowing the market. Investing near your area is in your best interest although it’s not always possible.

Chapter 12: How do you build a rental property empire

Here’s some basic steps to build a rental property empire:

  • When do you want to buy your first property?
  • What type of property will you buy?
  • What type of financing will you use?
  • How much money will you need?
  • How much money will the property generate?

“Saving money gives you options that allow you to make much more money, such as investing in rental properties and buying fix and flips. Saving money also allows you to be more flexible with your career or even a start a business.”

Chapter 13: What is the next step?

Do it.

Here’s the book:

https://amzn.to/2Mh8b8n

Premier Roofing Week 2 and 3

Sorry to keep you guys waiting on the update for my internship. I was out of town for the holiday weekend so my week 2 and 3 were discontinuous so I decided to group them together as best as I could. Overall week 2 went alright, I was out on my own going door to door and managed to make 2 sales that week while still putting a lot of time and effort into my training. I was still without WI-FI so that was rough, but my roommate also arrived in town so at least I wasn’t alone anymore. Week 3 is where I hit a stroke of luck. I managed to get 2 more sales and I sold a group of 6 rental properties bring my total up to 8 for that week! I was awarded the “Ace of the Week” for premier roofing and earned my rookie stripes (10 total sales). In addition to 8 sales I also had a PFYNR (prepare for your new roof meeting) where the customer and I discuss the two estimates and pick shingle colors etc. That earned me a little bit more for that pay period! That impressive performance and a little bit of luck that week earned me $1000 and some cool Knick knacks from the company.

As I am coming to the end of this week’s pay period (Thursday at midnight) I am not really looking at a big week like I had before. I have several potential sales in the pipeline and a PFYNR scheduled for Thursday afternoon. As of now it looks like I’ll be under my draw ($500) this week unfortunately. This may work in my best benefit however because this next pay period is looking quite juicy, several PFYNR’s, several sales in the pipeline, a sale already scheduled for Monday etc. I may be trading a poor week for a stellar week. Unfortunately, I still have plenty of ground to make up, as of this paycheck on Friday I will be $1500 short of what I was making last summer, granted that is to be expected in your first couple weeks as you aren’t making nearly the sales or the higher commission portions of the process in your first 2 weeks. I would like to see this next pay periods paycheck north of $2,000 though as I have investments to make, money to save, bills to pay, and necessities to buy. If you’ve been keeping up with my Instagram posts you can see I have some ambitious goals to tackle this June and I am trying to fire at all cylinders always to achieve that. To name a few, $25k net worth, $1000 savings, 30 sales and 200 notes for lending club. We’ll see what I can do to achieve that, I believe that since this is my last week of time consuming training for work that I will be able to better invest my time into passive income efforts, this blog and making wise investment choices.

As always feel free to leave a comment below!

B^2

Dividend Update 6/3/18

Hope everyone is doing well. As you may know I do a decent bit of investing centered around income and dividend growth. The appeal of constant cash flow, passive income, and free money has always intrigued me. As we closed out May I just wanted to share where I am at with my dividend situation. I have been focusing less on dividends than I did before, I obviously need some growth and value stocks since I am very young and have time to weather any storms. Shown below is a table containing my monthly dividend income, months in green are closed out and my June 2018 isn’t filled in either.

Dividend tracking 2017 2018
January $0.00 $12.86
February $0.00 $28.19
March $0.00 $33.18
April $0.00 $15.35
May $0.00 $17.71
June $12.54 $10.62
July $6.39
August $5.55
September $20.68
October $17.86
November $23.12
December $28.13
$114.27 $117.91
Goal: $125 $500

 

As you can see I narrowly fell short of my 2017 goal and I set my 2018 goal when I was very ambitious and into dividend stocks. Considering I have no active income during the school year building up a strong dividend portfolio is very important to me but perhaps not $500 in a year important. The graph below depicts the table above and we are finally at the point where we can start to see some overlap and how my dividends have improved and grown since I started tracking them in June of 2017.

div graph.png

The table below shows the various dividend stocks I own, their percent yield per my cost average, number of shares, year total payout, and my total payout and percentage compared to my total invested amount. As you can see if I want to reach that $500 in dividend income in 2018 there’s some serious catching up to do! Overall, I am yielding 2.41% compared to the SPY yield of 1.60% which isn’t bad. Like I said there isn’t as much focus on dividends as I’ve had in the past. My next purchases I would like to make would be some CBL unfortunately it shot up in price recently but a $100 investment in it would produce quite a bit of extra cash to work with every quarter. Maybe some more PG while its still cheap and O is currently my 3rd largest position in my portfolio and I try to add to it whenever I can when its down and those monthly dividends help tremendously when you have no income for 9 months of the year.

Ticker cost avg percent yield   share # year equivalent  
CEFL $17.72 14.73%   11 $28.71  
OHI $27.12 9.73%   5 $13.20  
AAPL $157.51 1.85%   1 $2.92  
PG $74.40 3.86%   2 $5.74  
F $11.30 5.31%   60 $36.00  
STAG $25.85 5.49%   20 $28.40  
O $55.78 4.71%   27 $71.01  
CBL $4.56 17.54%   5 $4.00  
TTS $6.73 2.97%   15 $3.00  
        a year in dividends $192.98  
        percent of total 2.41%  

 

So, let me know what you think! Any dividend stocks on your radar? Any you think I should sell or buy?

As always let me know in the comments!

B^2

End of May Goal Review

Long time no see guys. I apologize for all of that. On the bright side I think I finally made it over the hump as far as training for work, however as I am doing better I am now becoming busier with various meetings and trying longer and harder to sell to keep the money rolling in. So as far as future goals we’ll see how those go, I may go back to month to month-based goals as that enables me to look at the big picture perspective.

Unfortunately, I never took a before picture, but here is where I ended.

IMG_1328

As you can see starting from the top I came short on the blog and the social media aspects. I could’ve tried harder and put more work into it, but with the not getting WIFI at my apartment for 2 weeks and all the issues I had to deal with at the complex and learning everything for work it was probably a good thing to but that on the back burner. Same goes to click through rate and blog posts as they are tied together. I do have 3 referrals for Bespoke Post however I don’t think anyone has bought anything yet because I haven’t received any instore credit. I did finish the book “Rise and Grind” by Daymond John and I loved it. It had some of the other big names I’ve been reading like Gary Vee and Grant Cardone and some smaller ones that I like, for example the 2 guys that created the MVMT watches which I own. Side money came in low but oh well, I need to focus less on that and more on sustainable passive income and work on making more active income will I have the opportunity this summer to grow my income more than ever before. I had an incredibly ambitious goal of 20 sales for Premier Roofing by the end of the month, I only was able to really work 2.5 weeks for that and I had 12 and the best guy in the office had 16 with 3 weeks so I wasn’t far behind the leader.

I’ll be sure to keep you guys updated with what I am doing?

Also, yay or nay on the selfie video style format on Instagram? Let me know.

Internship: Week 1

If you haven’t heard yet, I am interning at Premier Roofing Company in Kansas City as one of their sales reps this summer. This is far different from my previous co-op (Samtec, various engineering positions) and my internship (Caterpillar, manufacturing engineer). So far, it’s going well, I have learned the sales script and I am currently assigned to 3 blocks of a street which is about 92 houses. I was training with my supervisor from Tuesday to Thursday out on the streets going door to door and inspecting roofs. We made a sale on Tuesday and Wednesday but had no luck Thursday. Today (Friday May 18, 2018) was my first day out on my own for my current territory. I hit the streets at 2pm and went through any remaining houses that we have not spoken to the owners yet out of the 92 on my list, I made it through the first round of door knocks by 3:30 and I had time to kill and I went down the street to the local Starbucks and got to use the Wi-Fi. You quickly realize how much you take Wi-Fi for granted when you don’t have it and neither does your place of work (the streets that is, the office has Wi-Fi). I was back out on the streets at 4:30ish and did another lap through my territory and I was able to inspect 2 roofs, 1 had appropriate damage and 1 was essentially brand new, a 1-year old roof. Couldn’t close the damaged roof and we will follow up with that customer in the coming weeks. I did have 3 major downfalls today, 1.) a potential sale said that her and her husband wanted to wait on filing the claim, 2.) I tried to get my yard sign in the yard of one of the roof’s we inspected with a woman waiting to file a claim and she did not let me put the sign up, 3.) a house that we got approved by the adjuster to replace, her neighbor that shares the garage with her didn’t even want an inspection so that will cause some headaches in the future.

Anyway, looking ahead, I have this weekend with my 3 blocks still, we are approaching the 80% saturation rate we are looking to accomplish. I believe I counted 32/44 house saturation on my first section of the neighborhood. This comes out to 73% saturation and I am at 6 door knocks for most of my houses, so we’ll see what this weekend brings. They are calling for scattered thunderstorms for Saturday and Sunday which could cause some issues. Hopefully I can close some deals and start boosting up this next upcoming paycheck. My first paycheck comes in Friday which includes my training flat rate and my 2 sales with my supervisor. My next paycheck currently only includes the training flat rate.

With the end of the month soon approaching my credit card bill is due as well as June rent, on the Brightside my roommate gets here Sunday afternoon, so I will have someone to talk to and do things with.

Continue to look for updates about my internship, the stock market, and what I am reading/reviewing. I am pushing and shoving this summer and I finally got settled into my job and the apartment and everything so it’s going to be full speed ahead from now on.

If you have any tips on getting off work on a sales job of this sort, please let me know! I have tons of other commitments this summer, however, everything is on the weekends and that is my prime selling time. I know I won’t be able to go to everything and see everyone but there are critical times that I need to go attend to other business and my hope is to outperform all my peers in this job and that would give me some leeway with my schedule.

As always, thanks for reading and leave a comment below!

B^2