The Condo by the Numbers

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The Condo has the potential to be the ultimate cash cow and golden ticket. As a brief recap, some basics about the Condo from a previous post:

The Condo (Townhouse-style): Mr. PFL purchased the Condo in early 2002 for $239,900. The county auditor’s newest proposed value is $308,000. The Condo is 1,918 square feet, with 3-beds, 3-baths and a 2-car attached garage. It was built in 1998. The Condo is located in a very desirable neighborhood close to downtown and the main entertainment district. Mr. PFL lived there with his cat until mid-2007 when I moved in with my cat. We lived there until October 2011. Since November 1, 2011, we have had 100% occupancy at $2,100/month. The last of the original tenants is moving out soon, and we have signed a new 1-year lease commencing November 1, 2014 for $2,250/month.

This Condo is one of three attached units. One of the units just sold last month for $352,500. Both of the other units are owner-occupied. Our unit is in the middle; the other units have small side yards within a privacy fence. We updated the countertops in the kitchen and bathrooms to granite before we moved out.

Now for some math, effective November 1, 2014, per month, for one year, approximately. The mortgage principal balance will be around $90,000 on November 1.

Rent: $2,250

Mortgage/Taxes/Insurance: - $1,490

Condo Association Fees: - $160

New A/C unit payment: - $308

General maintenance: - $100

TOTAL CASH FLOW: $192

The A/C will be paid off by June 2015, freeing up another $308/month, getting us closer to the approximately $400/month we’ve been averaging for cash flow over the past three years. We have never had a vacancy yet.

The mortgage is on track to be paid off in just over nine years. The escrow payment, which includes the taxes and insurance, is approximately $500. So, once the mortgage is paid off, in 2023 or before, a rough cash flow estimate is as follows:

Rent: $3,000

Taxes/Insurance: - $600

Condo Association Fees: - $160
(This has NEVER changed)

General maintenance: - $250

Vacancy: - $250

TOTAL CASH FLOW: $1,740 or more than $20,000/year

This property also currently has a second mortgage HELOC of just over $66,500 that was used as a down payment on our current house. We pay this payment as part of our current house payment. Even with both of these mortgages, we have somewhere in the neighborhood of $150,000 to $200,000 worth of equity in this property.

Forward Steps

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Today, I finally decided to move forward gathering information about our house. Our house is the biggest current obstacle, in my opinion, to Mr. PFL leaving his job. While we could afford the mortgage and utility payments even without his income, it probably wouldn’t be a smart use of our funds. I’ve been kicking around the idea of getting a roommate or two. Mr. PFL is wondering about selling. So, in an effort to get more information about both options, I left a message for the contractor that completed some exterior work for us and our real estate agent.

In order for our house to be functional for a roommate or two, we need at least one more bathroom. We had a roommate stay with us for a couple months back in 2012 (I think) and that was my biggest concern. All three bedrooms we have use the same bathroom. If we have a roommate again, I’d like for that person to have their own bathroom, and for us to have our own. The rest of the house is big enough, including the bedrooms, that there is plenty of space for more people and plenty of privacy. If we end up traveling like we hope, then we won’t be home very often anyway. I think we could legitimately charge around $1,000/month per roommate based mostly on our location and the size of the bedrooms. This would alleviate a lot of the anxiety I feel about potentially running out of money. So, I’m hoping the contractor can give me a realistic estimate so I know whether this is a potential solution.

I’d also like to know what we could list at, with or without an added bathroom, and the potential timeline for a sale. Selling is probably not the first choice, but it may make the most sense. A Zillow search today showed our estimated house value as $532,000 (we “only” paid $430,000 almost exactly three years ago). That is the highest estimated value I’ve ever seen for this house. I imagine it will continue to appreciate (but who really knows anymore) so it might be an excellent asset to keep in our back pocket for a few years.

We could also rent out the entire house, like we have with our previous place, and should be able to charge enough to cover the mortgage. We would still need a place to live, though, or at least an address, I think. Or, maybe we don’t. I’m not sure. I hope it will become more clear once I get some more information. At least I called. It feels like progress.

 

Family Time

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My sister and her family blew into town this weekend. I helped my niece carve her first pumpkin. She picked out the design and stabbed the pumpkin a few times, but refused to touch the insides.

Mr. PFL seemed to have a good time, too. Who knew it could be so much fun to watch traffic and people through the front window?

I was relieved that the girls warmed up to us both right away, even giving us hugs on the way into the house. It used to take a couple hours for them to feel comfortable simply because we don’t see them very often (Mr. PFL usually twice a year; me at least three times). I don’t expect that our relationship with them will change much even if we move away. I hope that when we are able to get together in the future that we will be able to spend more days with them each time.

I also learned this weekend that my new, comfortable, post-marathon walking pace is that of a 1 1/2 year old. And that I needed a nap on Sunday afternoon, too.

 

 

Million $ Question

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Although it has been over a month since Mr. PFL and I discovered our net worth was over a million, we haven’t made any drastic changes. We do talk about making drastic changes a lot more. I’ve found myself sinking into articles about retirement and travel. My biggest hang-up, I think, is that I struggle to envision the money being there forever and really not needing to work again.

I ran across an article today that asks: “Can you retire on $1 Million?” The short answer was yes. The analysis showed that, with proper investment, withdrawals and restraint, this amount of money can last a long time. It is even possible for it to continue growing. But, could it really last us forty years? Should I be worried about that right now? How much of an impact does owning rental real estate make in these equations? What if we just quit tomorrow? (We won’t, but really, what if?)

Recovery Day 4

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Thankfully, the worst injury I’ve ever suffered was breaking my collar bone during my senior year in high school. At this point, recovering from the marathon is running a close second in life-disruption. My feet are in an ice bath as I type.

Not being able to walk normally has been an amazing inconvenience. My legs are actually feeling fine, but my feet have protested the 26.2 miles I put them through on Sunday. My tendons have never been tested like that, and they have been letting me know. It is odd, and sometimes painful, to feel how my foot works as I walk. It is also frustrating to be so inefficient. Even when I walk without pain, it is in slow motion. I’m afraid to push too hard because I don’t want to cause a permanent issue.

Overall, I’m grateful that I was able to complete the marathon, and no, I never want to do it again. I also have a new awareness of how much I take my generally healthy body for granted. I’m looking forward to resuming a regular exercise routine and plan to continue making my health a priority. Getting done with the 9 to 5, but not being able to enjoy it due to health issues, just isn’t going to work for me.

Marathon Complete!

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Because everyone always wants to know, I finished in 5:29:02.

It was a beautiful day for a marathon. The sunrise was perfect and happened just before I made it to the start.

I weaved through hundreds of walkers and runners to start. There always seems to be a bottleneck at the beginning of a race (the handful I have ever done seems like a representative sample).

I completed the first 10k in 1:06:34 and the half marathon (13.1 miles) in 2:25:15. This was only about ten minutes slower than my half-marathon pace from 5 years ago. The year I was 30, I completed two half marathons - and I hadn’t jogged since. Mr. PFL met me less than a half mile from this checkpoint. It was really good to see him. I have to admit to a moment of doubt and a lot of emotion when the half marathoners turned off the course. The amount of people on the course thinned out considerably making it much easier to navigate.

By the time I passed the 16.3 mile checkpoint after 3:07:03, I started looking for a bathroom. I was getting into rarely completed mileage by this point. I found a restroom before mile 18.

I could tell I was doing fairly well, and really made a push to finish 20 miles in less than 4 hours. Besides finishing, this was my main goal. I managed to jog more than two straight miles to make it happen. I’d never gone more than 19 miles before. I made it to the 20 mile mark at 3:57:56. I walked for a while. I texted Mr. PFL to make sure he knew I was slowing down. Then I started jogging again to see my friend at the Mile 22 water station; I kept jogging until I saw her. She promised me there was beer at the end and I was getting close.

As you can tell from these splits, that last 6.2 miles took me about 1 hour and 31 minutes. I really did jog most of it, including the last entire mile after I gave Mr. PFL my Jimmy John’s order. I had another bathroom break around Mile 23. In the moment, I never would have guessed it was taking me so long.

Then I finished.

I completed my first 2 mile training jog on June 16, 2014. My records indicate it took 27 minutes. Yikes. I completed my last 2 mile training jog on October 17, 2014 in 20:32. And today, I completed a marathon.

Here’s to hoping I don’t get any stupid ideas for the year I am forty!

Big Week

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My first and only marathon is on Sunday. I have under-anticipated how distracting this would be for the week. It started this past Sunday when I saw the course arrows painted on a couple roads while I was out running errands. Since then, I’ve pretty much had a nervous stomach. The weather should be good for running on Sunday; it just can’t get here soon enough.

Last night, I finalized my first real sale as a travel agent. My client already gave me a shout-out on Facebook this morning. I’m excited for my client and for myself. I hope this will turn into some leads and new clients. I still have so much to learn, though, and I still need business cards! I also need to get access to many websites and booking engines, which is time-consuming, but necessary.

Mr. PFL also generated his first blog post yesterday, which is pretty exciting. I know he’s been working hard and has so much information that he wants to share.

Finally, I’d like to get started on my TEFL training since I have a light court schedule this week. Guess I better pick something and get to work.

 

Assets Explained

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So my original plan was to keep this short and concise. Once I got going I realized that was not going to be the case. With that being said, below is a bit more detail on our assets and some random thoughts about each. I’m sure I will explore each of these further at some point. Because I have used financial management software for over 13 years now I can retrace a ton of my progress (and believe me, I have). If you have any questions, comments, suggestions or whatever feel free to leave me a comment.

Note: As of 10/13 I am still finishing details on the Real Estate… tomorrow perhaps or the next day after that…

Assets

  • Cash - Everyone’s favorite as Ca$h is King.
    • Bank - Usually the easiest and most liquid of all assets. For the PFL’s we have individual deposit accounts, joint deposit accounts, and business deposit accounts. We typically will have between $10,000 to $15,000 spread across these accounts. That may seem like a lot at first glance but with the ebb and flow of our income and expenses I like to have a little wiggle room.
    • Pension - I was not exactly sure how to group my pension as I don’t actually have the cash in hand. This is part of my work package and at the end of my employment I’ll have options as to how I want to receive the accumulated cash. This is really a nice deal and a benefit I get for working within a giant corporate machine (although at the cost of my job sucking the life out of me). I don’t exactly count on this for the future but I track it and look forward to the day I cash in. Since I just passed 10 years of service I now get a 4% pay credit of my eligible compensation up to $100,000 annually, which is basically like saying I would get a $4000 credit if I make $100k per year (1-9 years of service is a 3% pay credit). On top of this the account balance also grows by receiving interest credits each month. The rate of the interest credit is based on a one-year Treasury Bill rate for the month of October of the prior year plus 1% - with a minimum interest credit rate of 4.5%. All in all this account grows at about $5000 a year and I don’t have to do a thing.
  • Investments - These are the mostly retirement accounts with the exception of my personal brokerage account.
    • eTrade Account - This account holds a special place in my heart as it was my first real investment outside of my 401k. I started this with my first real bonus of $2500 in March of 2002 and I purchased 16 shares of CAT, 12 shares of DD, 11 shares of EK, and 21 shares of IP. The stocks I purchased were 100% based off of a formula I read about (think Dogs of Dow) and I split the $2500 evenly across all 4 stocks, so around $750 per asset. I honestly had little idea about the fundamentals of the actual companies. I’ve added to this account over the years but only after all my pre-tax investments (401k, Roth) where taken care of first. I’ve also sold some of this to help fund other investments. To this day I still own CAT and have bought and sold various denominations several times (full disclosure, I love CAT as they’ve done good for me over the years). I always tell Mrs. PFL that the initial $2500 was my cost to going to school and it was well spent as I have learned a ton managing this account. Like, who would invest in EK, as in Eastman Kodak, as in the Polaroid Camera and IP, as in International PAPER, in 2002? 1990 maybe but not sure about 2002.
    • ESPP (Mr. PFL) - This is my Employee Stock Purchase Program and another nice benefit of working for a corporate machine. Especially if they are a profitable company and their stock performs well. I get to purchase stock with pre-tax dollars and at a 5% discount. I was buying $100 each pay period for most of the last 7 years but we recently stopped that and used some of this cash to finance our rental units. Much like you will see with my 401k philosophy, I recommend you try to take out something each pay period, even if it is just $25. Then adjust your living style to match your actual take home income. In other words, out of sight out of mind. Eventually it will grow to a nice little sum of money and you can sell the stocks and put the money to work for you in other ways.
    • 401K (Mr. PFL) - The foundation of the whole castle. My first job out of college was a real small (4 employee) IT consultant company and there was no such thing as a 401K. After about two years of that I took a job with a much larger company that offered a 401K and I was in from day one at maximum contributions. This is the first thing I would tell ANYONE to do -> Contribute the MAX amount to your 401K from day one. My philosophy is if they take that out of my paycheck from day one and I adjust my cost of living to my actual take home pay, then it’s auto pilot from there. I decide how much I can spend after that is out of the equation. That’s not to mention the inherent benefits of contributing in your 20’s or 30’s vs. your 40’s or 50’s. That alone should be the reason for you to start from day one.
    • Roth IRA (Mr. PFL) - This took until 2004 before I could contribute but since that year I have contributed the max each year. I manage this myself via an online brokerage and I try to keep it simple. Usually looking for dividend paying stocks, which are not usually very sexy but neither is a Roth IRA. I picked a Roth IRA over a Traditional IRA because we expect to “need” this before 70 1/2. I see it as bridge income to get me to our 401k and with Mrs. PFL’s retirement accounts we have options.
    • SEP IRA (Mrs. PFL) - Admittedly, I don’t know a ton about SEP IRA’s other than the fact that Mrs. PFL has one. All I really do here and with her Roth IRA is make sure she contributes as much as she can each year. I also give her general oversight on the type of stocks to buy so that we keep our portfolio balanced. We keep it simple by having it split across two ETF’s that provide diversity (international etf, small cap etf).
    • Roth IRA (Mrs. PFL) - Similar to the my Roth IRA we do max out Mrs. PFL’s Roth each year. This account is newer and like the SEP IRA we keep it basic and use it to balance out our portfolio. I have to give Mrs. PFL credit as she’s done a rather nifty job of creating all this net worth herself. She uses her income to fund these accounts and she has managed to add over $100k to our net worth.
    • 529 Account - Mrs. PFL is always thinking and started this a while back just in case. I don’t know all the details for how the 529 plans work myself. They seem fairly flexible and at this point we don’t contribute anything. We can if we decided to go back to school or maybe for a niece or nephew… who knows. For now we’ll just hold onto it.
  • Real Estate
    • House - Primary Residence
    • Condo - Rental Unit 1
    • Black Diamond - Rental Unit 2-7
    • Other Rental - Rental Unit 8
  • Precious Metal - GOLD!! Why not? This is really more of a “doomsday prepper” asset. The history of gold in society is rather interesting and it seems like gold has always been valued by mankind. So a while back we figured it’s better safe than sorry and we purchased some gold.

The Challenge of Flight III

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Flier’s Log, 10/10/2014, 5:50 p.m., Southwest plane, Tarmac, Orlando MCO

Today’s flight was scheduled to take-off at 4:55 p.m. At breakfast this morning, 8:03 a.m., I checked the status on my app. Delayed until 5:25 p.m. I checked again a bit later, and it still said the same thing. So, I called Southwest to see what was up and to discuss moving flights. The agent wasn’t worried about it and said I’d have to pay to change. She said it was an Air Traffic Control issue – a ripple from Chicago? Okay.

At 1:45 p.m. Disney’s Magical Express (complimentary with my stay) picked me up for my ride to the airport. They choose the time. I was at the gate by 2:48 p.m. I haven’t been over two hours early for a flight in ages. I don’t think I’m usually that early for an international flight. So, I sat at the bar, had a beer, and worked on some potential travel itineraries for some potential clients (friends and family). I wasn’t dealing with anyone’s actual money, so I thought it would be safe to multi-task.

Flier’s Log, 10/10/2014, 5:53 p.m., Southwest plane, Tarmac, Orlando MCO

Captain just provided an update: Maintenance is resetting some computers due to an indicator problem; no idea what time we will be leaving.

At 4:47 p.m. I texted Mr. PFL to let him know I was on the plane and heading home. I was in the ‘B’ boarding group and had been concerned about finding overhead bin space. I must have forgotten that there were going to be millions of children on this flight and most parents seem to check gigantic suitcases before trekking through the airport. My bag might actually have a bin to itself.

We had officially been declared “departed” on the app at 5:01 p.m. We taxied for quite a while. Then we sat. And sat. And sat.

Finally, at about 5:18 p.m., the captain told us we had to return to the gate due to a mechanical issue and the “guys” were going to take a look at it.

I had to text Mr. PFL to let him know that Pizza Hut was scheduled to be there at 7:45. I promised him earlier that I’d take care of dinner tonight. I had given myself 40 minutes from scheduled landing to get home, which is generally more than enough time, to be there for the delivery.

Flier’s Log, 10/10/2014, 6:06 p.m., Southwest plane, Tarmac, Orlando MCO

Oh goodness. Option to deplane. Guess I’ll go plug in.

Flier’s Log, 10/10/2014, 6:22 p.m., Near Gate 126, Orlando MCO

Bathroom trip completed. Have provisions.

Phone and computer are charging. Still no good answer to what is going on.

Flier’s Log, 10/10/2014, 6:23 p.m., Near Gate 126, Orlando MCO

“Please return to Gate 126!”

Flier’s Log, 10/10/2014, 6:33 p.m., Southwest plane, Tarmac, Orlando MCO

I’m back in my seat after chugging my beer. To add insult to injury, I was told that I can’t take beer on the plane! Excuse me, what? You just told me to get off the plane! Go use the bathroom. Get something to drink.

So, I chugged. When I picked my beer up from the kiosk, the lady had to pour it in a cup first. She poured, set the bottle on the counter and told me to “drink” since there was about half an ounce left. Keeping it classy with my Miller Lite original-label can.

Flier’s Log, 10/10/2014, 6:36 p.m., Southwest plane, Tarmac, Orlando MCO

A“97% chance that we will be able to get out this time.” The computer needed to be rebooted. I shake my fist at those forced updates!

Flier’s Log, 10/10/2014, 6:39 p.m., Southwest plane, Tarmac, Orlando MCO

As you can see from my provisions, I purchased a bottle of water. I violated one of my cardinal rules of travel today when I totally forgot about the full water bottle I had in my bag until I was in the line for security. I debated with myself about whether to just dump the water into the trash can or to just pitch the whole bottle. Obviously, I chose to ditch the bottle with the intention of buying a fresh one, which I forgot to do before boarding the initial time. I explained earlier about why it is imperative to have water and snacks.

Flier’s Log, 10/10/2014, 6:42 p.m., Southwest plane, Tarmac, Orlando MCO

“Seat belt fastened, tray tables stowed.”

Flier’s Log, 10/10/2014, 6:48 p.m., Southwest plane, Tarmac, Orlando MCO

Moving. Again.

Flier’s Log, 10/10/2014, 6:57 p.m., Southwest plane, Airborne, Orlando MCO

Off the ground. Hooray for a direct flight home. Scheduled to arrive at 8:55 p.m. I should make it home by 9:30 or 9:45 at the latest – a mere 8 hours of travel that I could have gotten done in 4 ½ on a perfect day.

Flier’s Log, 10/10/2014, 7:04 p.m.., Southwest plane, Airborne, Orlando MCO

I really wish I was making this stuff up. It would be polite of me to apologize to all of my fellow passengers for bringing my unlucky juju to them. That RV trip across America and Canada is sounding better and better. I’m so happy I didn’t check my luggage – straight to the car for me. I hope I parked in B11…

Flier’s Log, 10/11/2014, 1:20 p.m., My couch, Ohio

Finally touched down last night at 8:47 p.m. I was near the back of the plane, so it took a while to deplane, but once I did, I was in the zone. Families walking four-across, no problem. Slow old guys walking two across and blocking the whole hall and escalator, just took the stairs. Flagged down the parking lot shuttle just before it pulled out. Discovered I had parked in B13 (left myself a note on my phone). In the car heading to the exit at 9:16 p.m. and one last curveball – only one manned lane open and at least 5 cars in front of me. Grr.

Pizza Hut was waiting for me as I pulled into the garage at 9:29 p.m. And beer. Only three more airplane-based trips left this year. I should probably stock up on beer.

Another Day at Disney

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The travel agent conference has been invaluable so far. I’ve learned about many different travel products, some sales techniques, travel insurance, and networked with fellow agents. I also met and personally talked to Joanie Ogg and Bob Becker. Reading Joanie Ogg’s book (which is legendary in the industry), that she wrote along with her husband, Tom Ogg, helped me make the decision to jump into this venture. I sat at a table with Joanie at the beach dinner last night and chatted with her about numerous topics. She’s actually christening a new ship next week in Europe. When asked about working with her husband, she had only positive things to say. As Mr. PFL and I move into this new stage, we will be working together a lot more than we used to. I’m sure it will take us some time to find the right balance, and it is encouraging to see that it is possible.

After an amazingly long day yesterday, I headed into Downtown Disney with a new travel agent friend. I haven’t been to Disney World since I was 17 and came with our school band. That was the first time I flew, too. Downtown Disney was packed at ten last night. Disney has started a massive new construction project to reinvent Downtown Disney, so it was a little cumbersome to get around. Mr. PFL was super jealous when I texted him the Lego pond monster.

 

Unfortunately, my table didn’t win a free Viking Cruise this morning, but I did learn about the product. I’m off to more training, and get to finish the day watching Disney’s Fantasmic show. I’m so glad I’m here!