So Much Research

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Having a new plan/goal is exciting, but there is so much to figure out. Google has become my new best friend. Mr. PFL and I are still considering Hawaii to be a viable option. We’ve actually located a vacant lot with a lot of potential. It is listed at $175,000 for just under 7.5 acres, fee simple. It is zoned agricultural with minimum lot sizes of 5 acres. We currently live on .11 acres and our neighbor mows the front yard for us (our backyard is all landscaping/flagstone/vegetable garden), so this would be quite a change. We are also able to walk to almost everything we need/want - a reliable vehicle would be imperative in Hawaii as the closest town is about a 30 minute drive.

We’ve also been looking at zoning laws, since I don’t believe in buying real estate without a plan for potential income. The zoning laws are somewhat complicated and stringent, because, as we learned on several of our tours, the people of Hawaii try very hard to preserve the islands. The other complicating/interesting item is the ability to create Ohana dwellings, which are basically mother-in-law suites, attached or unattached, but without a complete kitchen so the Ohana (family) all eats together.

I’ve looked at some listings on HomeAway.com. At least one listing’s comments indicate that there is a second home that the owner lives in on the property during the time they are renting. So, I guess it is possible, but it will take a lot more work to figure out all of the rules.

We’d also first need to build a house in order to even consider renting it out. There are several companies that have kits for sale that include everything you need to build a house. Labor, electricity, plumbing, water catchment, preparing the site, etc., are all extra. Pricing has been tricky to find, but the price range at Argus Building Supply has a studio home for as little as $10,500, with a 3-bedroom maxing out at $41,500. We could build a house ourselves, technically, but the cost savings aren’t likely to pay off. For example, we’d need to live somewhere while we built the house; we’d need tools; we’d need time; we’d need to learn how to build a house; and we’d still need to hire plumbers and electricians or the house wouldn’t be up to code.

We’ve also considered building or buying a tiny house. We watched an entire video about a tiny house in Hawaii.

We’ve briefly looked into getting jobs in Hawaii to help ease the transition. Unfortunately, Hawaii doesn’t have reciprocity for lawyers, so I’d need to take the bar exam again. It is making me nauseous just typing this, which is the same reaction I had when I first looked up the rules this morning. It is possible I could get a legal job, just not as a lawyer, if I don’t take the bar exam (like a law clerk or paralegal). Mr. PFL was looking into groundskeeping.

So, the next steps, in no particular order, are to:

1) Find a real estate agent;

2) Decide on a budget and financing;

3) Decide the ownership type we’d like to use (probably an LLC);

4) And, go back to visit???

BTW - I did get a couple of emails in response to my casting application to be on Hawaii Life, but nothing else is happening on that front.

Application Sent

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I just sent an email to casting for HGTV’s Hawaii Life. This feels like an actual forward step. I tried to apply for Destination America’s Buying Hawaii, but I can’t figure out how to do it. Oh well.

Mr. PFL and I have talked, and talked, and talked. Like until the wee hours of the morning. I think we have agreed on the following:

1) We should move to Hawaii.

2) We don’t know how to make it happen, exactly.

We have gone back and forth and up and down trying to decide what to do about our current house. We both realize that, if we sell right now, there is no way we would ever be able to buy back the same or similar place in the future. Once it is gone, it is gone. One of our local weathermen used to live two houses down; he had a big retirement party on the air before he moved to Florida with his partner. He was back less than two years later, working at a different local station, and owns a house less than a mile away (OMG! I just watched the video about his return!). This is my fear! But, at the same time, our house is attached to a substantial monthly payment. Thus, we go round and round in circles.

We are discussing every possible option that might be available, including: renting it out on a lease; getting roommates; selling; upgrading (adding a bathroom) and then deciding; listing it as a vacation/short-term/executive rental; and using it as a movie set (I literally just thought of that one).

I just spent a little time searching for roommates online. Okay, a lot of time. I think we could rent our two spare bedrooms for between $500 and $1,000 each. I also tried to find a full-service property management company on HomeAway.com (parent company to VRBO, etc.), but they don’t have a trusted company in our area. So, I’d need to find a person or company to trust that would deal with the short-term renters; I now understand why most of the listings in our area were for guest houses and carriage houses, but not full homes - somebody’s got to be here.

I wish there was a right, easy, no-risk decision. And that we hit the lottery. 😉

Post-Hawaii Update

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Where to start? Mr. PFL and I came home a day early from our vacation (we were supposed to be back Tuesday, but arrived home Monday night instead, cutting out one day in San Diego) and we (or at least I) am still feeling jet-lagged and off-schedule. The jet-lag and the ridiculousness of Hawaii roads are really the only negatives I have to report about the trip. Hawaii was as amazing as I had hoped.

Condo Update: So, just before we left, I signed a contract with a handyman service for our rental properties. The day before we got home, while we were hanging out with Mr. PFL’s college roommate in San Diego, the furnace broke, again. I advised the tenants to contact the handyman service; they did; he provided a temporary fix and emailed me for permission to get the new part (the same fan broke in the same way, again!); I told him not to since it was under warranty; and I got the invoice yesterday where they charged me $0 for the service call. Wow! We also now have a brand-new furnace as of yesterday for $2,500. I left the tenants a couple of bottles of wine and a thank you note; hopefully they will forget this ever happened and will live there forever…

Duplex Update: After a ridiculous amount of drama over the past couple of months, the duplex that we are selling on a land contract basis seems to have stabilized again. I nearly fainted when the purchaser actually showed up at my office with a money order like she promised. Hopefully she will get caught up over the next few months and everything will be okay. I also just received confirmation yesterday that my application to buy the vacant lot next door has been approved by the City. We will be getting it for the low, low price of $705 (yes, seven hundred and five dollars) plus $100 processing fee.

BD 6-Unit Update: Unfortunately, between the holidays, the weather, and all of the traveling we have done in the last six weeks, I haven’t cleaned and listed the empty unit yet. I also received an email from one of the other tenants a couple of days ago telling me that she will be moving out on the 26th. I was getting ready to evict her, anyway, because she was so behind in her rent, so this was actually a blessing and saves us both a lot of trouble. So, I’ll have two 2-bedrooms ready to list next week (I hope!). I also need to reach out to the two 1-bedroom units to see if they want to upgrade to a 2-bedroom, sign a new one-year lease, go month-to-month, or move-out. I had a lot better luck renting the 1-bedrooms, so I’m hoping one or both will consider upgrading.

TEFL Update: I haven’t done any courses since before the holidays. Mr. PFL is nearly done.

Travel Agency Update: Right around Christmas, I had a group planned. Then it fell through. Bummer. And a lot of work for nothing, except experience. I am working on a couple other projects now, though, and I should get some commissions from our trip to Hawaii (hotel, rental car).

Real-Job Update: Ugh. We still have them. As I told Mr. PFL when he was getting anxious to come home: I’m not looking forward to dealing with difficult people and therefore I don’t want to go home. It would be amazing to live in a world where nobody needed a lawyer; I’ll settle for living in a world where I don’t have to be a lawyer anymore.

Life-Plan Update: I want to have a small coffee farm near Kona on the Big Island, Hawaii. I know this sounds totally insane, but it is actually a practical possibility. Mr. PFL and I have been doing some research since we got back, and it just might work. I’ll share more about this soon.

For now, I need to get to work on some lawyering and travel planning.

Let me just leave you with this picture of sea turtles. Aloha!

 

Hawaii!!!

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First post from my phone… Started this once already and it disappeared when I was looking for a link. And, I don’t know how to add pictures. So, maybe I’ll just make this short.

Hawaii is amazing. Mr. PFL and I have agreed that we are making the right choice by trying to get done working and travel more. Hawaii will hopefully be a home base for us someday soon.

Oh, and The Ohio State University’s National Championship isn’t too bad either.

2014 Year End Review

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Hello Everyone and Happy New Year!!! May 2015 be as good or better than 2014 for all of you…

As I have mentioned in the past, I am a huge fan of personal finance management software. My personal choice is an application called MoneyDance and I love it. One of the features I love most is the customized reports and detailed graphs that I can create. I have so many customized reports I can break down our finances in dozens of different ways. One of my favorites is taking a look at year end to see how things went.

So, without further ado, here is a look at our 2014. The table below shows a break down of our account balances on 1/1/2014 vs. 1/1/2015 with the gain/loss listed in the right column. I have grouped these into the various assets/liabilities that I track on our Net Worth Tracker page.
Some observations:

  • Nice to see the Pension Plan add $5000 to the kitty. I’ve mentioned it before, but this is a nice little benefit of working for the corporate machine. Now that I have 10 years of service time, my pay credits has increased to 4%. Long story short, this has slowly built up to the point where I now get over $5000 added each year. I can cash this in once I leave either as a lump sum (with higher taxes) or over some period of time (with lower taxes). Let’s worry about that later and for now we’ll just watch it do it’s thing.
  • My Roth IRA has made almost all of it’s gains ($11k) since 10/2 based on my reports. I noticed that when I updated the Net Worth Tracker page today that it was at $58k on 10/2 and now at $70k. This is due to a speculative buy I made on a bio/pharma stock that has returned something like 325%. I bought 650 shares at something like $7 and it took off to over $35. I sold off enough to get back my initial $5k investment and still have 500 shares in my portfolio. Fun times when it works…
  • My Work 401k, which I consider to be the bedrock of our portfolio, is performing quite nicely. I’ve cut back my contributions this year which was EXTREMELY odd for me. I have MAXED my 401k contributions from day ONE. I fell in love with compound math the summer before my first real job and that changed everything (I remember it like yesterday). I was amazed at how much of a difference it made if you started investing at 20 vs. 30 or 40 or, heaven forbid, 50. At that moment I decided I would do all I could to max out my 401k contributions from the start. This year we decided to divert some of that cash to other interests as our 401k is pretty hefty now. Even with that, the total increased nearly $50k which is fantastic in my book.
  • Mrs. PFL did good work with her SEP and Roth IRA’s. We complement the aforementioned “bedrock” with our IRA’s and between the two of us we have a tidy little sum. I let her manage it but we try to make sure it fills in a need such as an International Fund or Small Cap. Just enough to try and keep us diversified.
  • Overall we were able to reduce our debts (credit cards, HELOC, Mortgages) by $30k. We did a bit of repair on our primary house that really prohibited us from knocking this down even more (and why our HELOC increased). I expect in 2015 we should be able to really take a good chunk of this out as it’s our primary focus. We use the rental incomes and any left over cash to knock this down. The one thing about compound math is that it also applies to interest and thus can work against you. Plus I really really really dislike debt (Ala Dave Ramsey).
  • The value of our assets, which is primarily our house and our rental units, can be a bit subjective. I try to update these based on various metrics. For our primary residence we use tax assessments and we review real estate transactions within our area and I tweak it once or twice a year. For the condo, the neighbors sold their unit this year so we have a good baseline for that. The new rental unit is the biggest gainer as we put a lot of time (and 2013 debt) to fix these up and get them rented. Ultimately the goal is to eliminate the debt on these and have them generate monthly income allowing us to truly achieve Paycheck-Free Living!!

So what do you think? Not a bad 2014 if I do say so myself. This is why I am trying to stick it out at my corporate job as long as I can. If we can grease this wheel a little bit more and eliminate our bigger debts, our dream may become true. The nice thing right now is that we are able to do all these cool things (Sugar Bowl, Hawaii) and still make progress.

Account As of: 01/01/2014 As of: 01/01/2015 Gain/Loss
Bank Accounts Total $20,471.06 $18,435.69 ($2,035.37)
Pension Plan $32,411.36 $37,466.43 $5,055.07
Investments - Total $632,741.43 $715,236.79 $82,495.36
E*TRADE Investment $32,805.07 $32,928.74 $123.67
Roth IRA (Mr PFL) $58,832.98 $70,037.96 $11,204.98
ESPP (Mr PFL) $8,878.08 $9,692.91 $814.83
Work 401k (Mr PFL) $392,069.09 $440,856.19 $48,787.10
529 Plan $2,565.06 $2,730.86 $165.80
Roth IRA (Mrs PFL) $34,563.59 $39,789.36 $5,225.77
SEP IRA (Mrs PFL) $59,004.20 $70,326.34 $11,322.14
Precious Metal - Total $11,612.00 $11,408.00 ($204.00)
Assets - Total $894,422.96 $1,001,675.00 $107,252.04
Primary Residence $480,000.00 $500,000.00 $20,000.00
Condo – Rental 1 $331,000.00 $338,000.00 $7,000.00
BD – Rental 2-7 $61,833.00 $126,000.00 $64,167.00
Auto/Misc Assets $8,000.00 $8,000.00 $0.00
Other Rental 8 $13,589.96 $29,675.00 $16,085.04
Credit Cards - Total ($110,780.98) ($109,016.02) $1,764.96
Business Credit Cards ($16,960.11) ($11,034.20) $5,925.91
Personal Credit Cards ($4,965.24) ($4,942.88) $22.36
HELOC Loan ($58,855.63) ($62,486.84) ($3,631.21)
HELOC Loan ($30,000.00) ($30,000.00) $0.00
Loans - Total ($545,256.99) ($518,218.46) $27,038.53
Primary Mortgage ($329,332.36) ($321,183.64) $8,148.72
Condo Mortgage ($99,999.99) ($89,039.57) $10,960.42
Personal Loan ($26,833.28) ($24,195.25) $2,638.03
Student Loan ($89,091.36) ($83,800.00) $5,291.36

Total

$891,597.48

$1,108,113.00

$216,515.52

Oh, Alabama

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What an amazing win by The Ohio State University last night! It is really the only thing that has made today’s drive bearable. We finally made it to our hotel near Huntsville about a half an hour ago. I’m spent. Yesterday, after about a 3-hour drive from Jackson, Mississippi, we checked-in and were out for the day in New Orleans by noon. I took a video while leaving the Superdome last night at 12:14 a.m. Yikes. That’s a solid twelve hours of partying. I’m getting to old for this.

We’ve been listening to ’90s on XM radio in the rental car and, as Alanis Morissette might sing, isn’t it ironic that Alabama has been overtaken by Buckeyes returning home today? We lunched with a few fellow fans in Biloxi, Mississippi before heading north into Alabama. Hopefully only 7 1/2 hours tomorrow. Go Bucks!