Auction a bust

Well, Joel and I went to the house auction last night, but it was a bust - out of 14 couples who went through the house on the Open House day, for the longest time I was the only one who came back, and in the end, there were a whole bunch of people looking to watch, including a couple of people who are thinking of selling their home by auction instead of realtor, but nobody came out to bid.

It wasn't a complete waste of time, however, as Joel and I got to spend a bit of time together chatting about our latest advancements in knowledge and findings on the whole Passive Income topic, and we got to meet the Auctioneer and his helper and chat with both of them for about 45 minutes, too. But we didn't get to see the auctioning process this time.

I'll keep an eye out for the next auction coming up, as this is only the 8th attempted in our area. I think this particular house had some basic problems with it locationwise and that's what ultimately happened to defeat the auctioning process. The physical house itself is nice, and the neighborhood is great, but it's too far from city centre and has a highway very close so despite physical barriers built to reduce the sound, you can still hear the traffic screaming by at 110kph.

At any rate, while talking to the Auctioneer, one of my very first questions to him was why someone would choose to auction their house vs sell it through a realtor, and the answer made a lot of sense on both the buyer and seller's sides in terms of actual process of buying or selling a home. Looking back, however - I have some more questions I wish I would have asked last night, surrounding things that Realtors and that process of buying a home help you take care of which are left for the buyer to handle in this process. I feel that this time around I was mainly being a 'friendly' in gathering information, avoiding potentially difficult questions which require me to remain comfortable while someone else becomes uncomfortable. As I get more confident in myself I will not worry so much about being 'friendly' (avoiding the hard questions), and put more emphasis on tact (diplomatically asking for the important but difficult answers).

Some reasons you as a seller would auction your home:

• More specific sale timeline. Seller specifies the Open House days, and all parties interested in reviewing the property review it then. Auction date is set and all bids come in on that date. Ultimate possession date can be defined at the same time as the Open House and auction.
• Taps into the innate nature of competition for the seller - the buyer doesn't have to be involved in accepting or denying bids once they have set their "reserve price" (minimum acceptable price) for the property with the Auctioneer. They just sit back and watch the Auctioneer work with the buyers.

Main reason as a buyer you'd get a home at an auction:

• You know who your competition is and exactly how much they're bidding. In a competitive buying market when you've been out-bid on 3-5 homes already or watched someone else who has, the auction process is refreshingly open in comparison

All in all it was a good night, didn't suck up all the time we had that night for relaxing, etc, and the conversation was great with the Auctioneer and his assistant. It turns out the Auctioneer grew up 10 km from where Joel grew up... and the assistant had played hockey in high school against Joel's older brothers!

Small world!

Jill

Something I'd never have done alone - RE Auction

Over the weekend, I dragged by visiting parents to the house that's going to be auctioned soon in our area, and we took a tour through the house and talked about the upcoming auction with the house's owner. When we left, I read through the Auction information and found that there was a $1000 (refundable to non-winners) fee to enter the house to view the auction!

So, while it's refundable, I really didn't want to put myself in a line with truly serious investors when I'm not truly serious about buying this home I expect to sell for $150,000.

So, I did something that I wouldn't have done if I weren't doing this Passive Income thing with Joel - I called the company doing the auction, was referred to the Auctioneer, and asked the guy if there were any volunteer positions Joel and I could take up in order to be able to watch the auction for educational purposes. I was very up front that we're nowhere near investing in RE yet but we're interested in the education, and the auctioneer was very supportive and quite happy to tell me Joel and I could come in for free by identifying ourselves to him (the auctioneer) when we got in, and that the deposit fee is mainly to deter hoards of speculators from pushing out the real buyers.

Excellent! Yet another example of where asking for what you want, instead of just taking what you've been told as "the rules" can get you in to places you thought you were shut out of!

We go on Thursday. I'll write about it afterwards.

Jill

Doing stuff

Right now most of what I'm doing is a preparation for investing in real estate and having the where-with-all to get things done as well as understand what is going on.

Right now I'm starting with our primary residence, then once we have US organized, we can think about another property.

I started to use Simply Accounting to track our home money flow but screwed a bunch of things up when I set it up last week, so today I set up a new company and started again with today's balances in our accounts, etc. I started keeping a list of questions that came to mind that I should be asking our financial advisor, and have them saved in a text file on my desktop, along with information about what the last recorded transaction in Simply has been from all of our accounts so I don' t have to search for that when I go to enter data next.

Once I got Simply pretty well organized, and Accounts set up and Vendors set up, I moved on to something else I've been meaning to do for our house and our future in real estate - start meeting handymen type people (it would be cool to find a handywoman as well), get things fixed in our own house, and see how the working relationship develops between us over the next year or two. It'll be these folks I'll turn to when ANYTHING needs fixing in a rental or commercial property I own, because I'm not doing it myself. I will likely have a couple or three handypeople in my Rolodex for a few reasons, but I know it's going to take a while to find quality folks who "get it" and get along with me as a female telling them what to do. Because folks, that's what I see as one of my challenges as a Real Estate investor. There are still WAY more guys doing it than gals, I'll have to grow some stones of my own.

I also called a recommended roofer to get them to give us a quote for re-shingling our roof. We already have two quotes but this third company was recommended by a close friend with "ins" in interesting places, so we want to consider this option before we move forward.

That's all for now :)

Jill

Cashflow 202 eGame difficulties.

Man, I played two games of Cashflow 202 eGame this evening against a computer opponent, and it wasn't the opponent who defeated me at all - I went bankrupt because of all the stupid DOODADS the game decided I wanted to purchase!!

Gah... $17k boat, $50k cabin at the lake, plus a whole bunch of little "hits" to my monthly cashflow...

Very frustrating.

I'm going to play again this evening, and hopefully have more success and actually play against a human I can converse with.

Jill

Moving from games to The Real Thing[TM]

So, I was doing some poking around this evening. I had picked up a local "Renter's Guide" in a 7-11 because the properties for rent in that magazine actually had addresses to the homes being rented, which allowed me to look up the property's current assessed value with our city property taxation department. I then took this information to some random site on the 'net that came up when I searched for "mortgage calculator 30 years" in my Google toolbar... and figured out how much it would cost per month, at that assessed rate, for the property.

It was an interesting experience. First off, there were VERY few homes listed in the renter's guide. Right now in our city, occupancy is at 97% or something like that for rental properties, so I wonder if that's part of it. (oh how I wish I had held on to a renter's guide from when I was apt-hunting back in '97!) But also, there was a wide range of profits on the properties, based on the calculations I was making. Of course, I'm sure there are people who own some of those properties outright and thus they don't have a mortgage they're trying to get the tenants to pay for them.

There were two houses that surprised me greatly - they were worth between 30-38k and the rent on them was $600-750 + utilities! From my calculation, if the house was purchased at the listed assessment price and a 30 year mortgage was taken out at 5.62%, the monthly mortgage cost would be a mere $189. I was impressed, but wonder if those houses take longer to rent out, or if that's what the market can bear in that area.

I ventured on from there and stumbled across the website of a local real estate agent. She listed the properties she was selling, and not only had the addresses on them, but the asking price and the details of the home you normally get on those sheets when you look at the home. I was shocked to see that every single one of the homes had an asking price between 20-40% above the assessed-by-the-city value of the property.

Immediately, of course, my mind reels backwards because my assumptions about the properties I was looking at in the Renter's Guide were not exactly sound (those 30k houses may very well cost 50k right now).

At any rate, I'm pretty much at the point now where playing CashFlow itself is all about the luck of the dice and not so much about recognizing a good deal... the multiplayer option, against other people is a great thing still because it gives me different people to talk to on this topic most people don't know much about... but I'm at the point where I need to get out there and take a look at some REAL real estate and learn how to ask the questions required to fill out a "Real Estate Assessment" form of some kind, like the one available for Insiders on the Rich Dad website. That form is designed to help potential investors see whether the property will be able to generate positive cash flow, or at least what will be REQUIRED to generate positive cash flow.

So, I poked around a little more online and found that in a couple of weekends there is a house auction locally, by one of the alternative realtor types in the market. Next weekend there's a "viewing" of the house, then the weekend that follows there's the auction. The address was provided so I looked up the value of the home. It lists at $108,000. I'm sure it'll go for $140-$150k.

I've emailed Joel and asked him if he wants to go to that with me. I hope he does because I'll be too cowardly without him. I'm still too timid about this whole thing once I leave the safety of my basement. I figure that will change as I get more experience and exposure, and that just requires time and continued perseverence, which I'm good at.

At any rate, that's where I'm at now!

Jill

Life involves pain

I got my final wisdom tooth taken out yesterday, in an oral surgeon's chair. He had to shave down my jawbone a bit to be able to pull the tooth out.

OH... THE... SOUNDS....
Nasty nasty nasty.

Then, last night my husband and I had a bit of a chat about things bothering us recently, and he said something about us "going broke".

I think it's damned funny that now that I've started to get our finances organized and in line, my husband is telling me we're going broke. Before that, I guess we would have just GONE broke and what from there?

I guess it's good I'm doing this, and doubly good that I'm aware that BY doing this I'm bringing stressful thoughts into our household that we were hiding from before.

The stressful thoughts don't bother me in two ways: First, I'm not stressed about the situation, I feel confident we'll be able to make a big dint in our non-house debts with very little effort. Second, I'm doing the work and have committed to spending afternoons working on finance and investment-related things, so I know something is being done instead of just being left.

It's important!!

Jill

Cashflow 101 eGame, multiplayer

I subscribed to Rich Dad's Insiders access on a monthly basis just a few days ago, and since then I've been playing a game or two of CashFlow against opponents every night. It's been very interesting!

Tonight's game was against an interesting chap from the UK who had been introduced to Rich Dad Poor Dad and the CashFlow games under a month ago. We had a great number of conversations as we went through the game and I'm sure I'll cross his path again.

My game went well - I didn't waste time or money on stocks because none fit my 'buy' requirements, and I was able to sell a house for about 80k profit and pay off all of my loans, etc, rather early off. I started with semi-high expenses, however, so there were Other Expenses that I couldn't remove.

I was about to get out of the Rat Race when my game partner rolled a successful endeavor in the Oil Field thing in the fast track...

My score was better than last time, so I'm happy. Last time STANK!

The thing I learned this time, mainly, was about the whole "interaction with another gamer online about financial stuff" thing. I think I will go into games with a goal to be the "teacher" or to be the "learner", and that will help my expectations and enjoyment of the process.

Sunday, the day of....

... cramming lots of information into my head about various things. And while I do give in to multiple naps in a day on Sundays, I still don't consider that much "rest".

Today I finished the non-financial-related book I was reading, namely, When I Say No, I Feel Guilty by Dr. Manuel J Smith. On a personal growth/dealing with difficult conversational situations level, this book was great, however, which is why I mention it again, here. I'm probably going to annoy a few people in the next little while by using the "systematic assertiveness techniques" taught in that book ;)

I have played Cashflow 202 eGame against computer opponents 2 times today, and got my bootie kicked both times. The second time around I was a Doctor, earning some $11k/month with $8k worth of expenses per month... I went bankrupt on that game, because I kept on hitting doodads that were not only expensive but had recurring costs.

I've started to read another book - one that I ordered from Amazon along with The Dollar Crisis, which I heard about first through www.richdad.com/forums. It's called The Coming Collapse of the Dollar (and how to profit from it) by James Turk and John Rubine. Since I have decided I probably won't have enough knowledge to feel comfortable doing much investing until the markets I'm educated in (stocks, real estate) are going down, I figure this type of "how to make a profit" book is a good one for me to read. I'll write a wee book report on it after I'm done reading.

I bought a couple of newspapers yesterday - Saturday papers, which are the most full of classifieds and things of those nature. I went through one of the papers this afternoon, putting the parts of the paper I don't care about into recycling, and pouring over that which I'm interested in. I pulled out the 3-4 pages that have rooms for rent and houses for rent or sale, and tucked the information away. I figure I'll do this once a month or so, and in a year or three I'll have an interesting pile of information about what the local real estate market has been doing in the mean time.

I'm about to cuddle down for another snooze, then dinnertime will be upon me and I will make some spaghetti and enjoy that.

Things I've got scheduled/to do this week to take care of business are:

1. Financial advisor guy visits on Tuesday afternoon. I have to make some corrections on the nearly-complete May and June "financial report card" spreadsheets, then complete April's information with the new corrected format. My initial goal with him is to figure out a basic and a more detailed way of showing where our money is going - I have a non-detailed spreadsheet I found online that I like the looks of, if it's functional and not missing important things. My detailed spreadsheet welcomes improvement because it's not all that detailed. Some of that is because of our spending habits, however. My second goal is to figure out some ways to reduce interest charges while working to reduce our existing debt over the next 6 months. I believe just being aware of where the money is going will help curb our bad spending habits enough that we don't have to review that for 6 months or so. However, we do have a $4500 re-shingling we need to get done before the snow flies again, looming over us.
2. Gotta decide on a quote from the 3 tree trimming companies who visited 2 wks ago and make an appt - we have trees in the back yard that are growing in amongst some cable TV lines. We want to get that trimmed up so it won't bother us for another 3-5 yrs. The front is fine, and our trees don't need pruning.
3. Call handyman or three, get 'em to come over and quote on bathroom repairs + shelving unit fixes + whatever else their eyes spy. We have house repairs that need to be done, which is one thing, but ultimately I'd like to find a handyman or three that I could depend on to repair my rental real estate in 5 years time. These handymen won't know that for a while, however. For now I'm just looking to maintain my own home when things fall apart.

That is all for now.

Jill

A lot to learn about stocks.

I have some stocks that are doing really well in my play portfolio. One's gone up 48% since I bought into it a couple of weeks ago... another has gone up 25%. For both I had invested in 200-300 shares and they were under $5 each share, and between the two, my investments are up about $400.

I do have a number of stocks that have changed for better or for worse by between 2-8% but these two stocks stand way out in my list.

Of course, now I don't know what to do. I mean, my stocks have sharply increased for both, does that mean I should be getting out now? Will I be upset if the stock continues to go up? Maybe I should sell half my shares and keep half? Or maybe I should do some options, to sell off if the price starts to drop, but still let the value increase without me losing out?

So many thoughts going through my head. So much reading to do, so much to learn.

Right now I'm reading "When I Say No, I Feel Guilty", which is a "systematic assertive therapy" book highly recommended for and by people who have to deal with manipulative things in their lives (malicious manipulative or not, doesn't matter). I will get back to reading about stocks and stuff like that soon enough.

And I will continue to play Cashflow 202 eGame.

Podcasts and Dave Ramsey

I just updated my version of iTunes, and now there's a nifty little "Podcasts" icon.

At first I ignored it because it took me to the "Store" when I'd try to get to the Podcasts directory, and I didn't want to buy anything.

Then I found out podcasts are free, for the most part. I'm sure there are pay-for ones as well.

At any rate, in the Business section, there's some interesting Money and Investing casts.

I have subscribed to a few, including the 1-hour daily Dave Ramsey cast. The first one was quite interesting, I look forward to more!

Jill

Cashflow 101 eGame, revisited.

Wow.

Since playing Cashflow 101 eGame against computer opponents (knowing that computer opponents are programmed, at least somewhat, to follow the route the game producer wants the gamers to learn to improve their game), my strategy has completely changed in the game.

And of course, strategy changes in the game influence my strategy plans in real life as well.

The key of what the game is trying to teach is to pay off debts first, stick with "small deals" until you can afford basic "big deals", don't be afraid to take bank loans on a good cashflow property/business, pass on poor or negative cashflow properties, focus on good cashflow vs good potential return if the value of the house increases and you can sell it.

The makers of the game are not saying you cannot get out of the rat race using other strategies, but it's based more on luck than anything if you DO get out of the rat race that way - at least, any faster than the less risky ways noted above.

I have Cashflow 202 eGame now, and have installed it and played it a few times. It, itself introduces many more thoughts, which I will write about later!

Jill

Cashflow 101 eGame

I am now the proud owner of Cashflow 101 eGame.

I installed it today and played it for the first time. The introduction was GREAT, I loved how the concept of the Rat Race was introduced, and how the whole game was introduced.

The eGame is somewhat different than the board game, in that there are more "cards" in the various decks, and the opportunities have a wider range of cost and rewards. Plus, getting to play against computer opponents is enlightening as well - my strategy going into the game was quite a bit different than theirs, and I've been the last out of the rat race both times I've played so far. My goal is to beat some of the computer characters out on a regular playing basis.

I love the way the game educates, both in the board game and the eGame format. I even feel warm fuzzies when Robert Kiyosaki is in a video clip. Chubby Robert, fighting those wonderful cookies exactly the same way I am, and sharing GREAT knowledge with the world.

During the game, every once in a while, two characters on the screen have a wee conversation - like, about the "riskiness" of borrowing money from the bank, or the riskiness of stocks or real estate. Quite educational themselves!!

I look forward to giving CashFlow 202 a try, but for now I will continue playing with 101 and trying to beat the rest of the players out of the Rat Race!

Jill

This will NEVER be me

On Monday morning I drove through my regular coffee shop drive-thru and bought my morning hot drink, and in wanting to be friendly, I asked my regular coffee lady if she had been lucky enough to have a long weekend, seeing that she works in the service industry.

She responded that during the day she works for the coffee shop, and early in the mornings, she cleans one of the local bars. She didn't have time off for long weekends with this type of schedule.

I cringed on the inside, and I'm sure my facial expression must have shown SOMETHING... here I am working towards making it so I can be MORE lazy, and here's someone who's working her tail off at jobs that do not pay well.

I kind of feel guilty when I look at her now, but I won't let myself hold on to that guilt because I really have nothing to feel guilty about - we all make our choices, and we all get good luck and bad luck coming to us in different ways, which we handle differently.

I am thankful for the life I have and for the path I am walking on!

Jill

Passive Income Night with Joel

Last night I went over to my Passive Income Buddy's place and brought along the board game CashFlow 101.

We had a great time! Joel showed me the trading software he and his boyfriend have invested in, and took me through the basics of how it works and how he's supposed to use it in order to get the most out of it, and he showed me a few websites he had found that related to the Canadian market and laws (see the link on the title of this entry), and showed me that he had found there were a few "Rich Dad Clubs" in our city, including one that had CashFlow 202 available for its members to play.

Joel emailed the contact for that club, inquiring about whether they're taking new members and whether they're meeting during the summer months. I hope we don't have to wait until September, as I'm quite looking forward to meeting new like-minded people and playing the advanced version of the game I have, without having to purchase it first.

Joel also showed me there was an upcoming "Rich Dad Advisor" seminar in our area, and the entry fee was at its early bird fee which was 20% of the full rate. Joel had already registered, so when I got home last night I registered myself as well. That's in August, and I just finished writing it on my calendar next to my desk so as to remind me.

After a while, we settled down to the kitchen table to set up and play CashFlow 101. This is the second time Joel has played the game, and about the 6th time I've played it, so we're both familiar with the general rules and only had to check to confirm every once in a while.

Since we're both adults and playing for our own benefits, we altered the rules slightly for our own liking - namely, since the best part of the game was getting out of the Rat Race (and the most important to where we are right now) , we decided that once someone got out of the Rat Race, they'd turn in everything, get a new sheet, and a new career card, and start again. Plus, we didn't audit each other's financial statements to catch errors. This was for our own learning and thus we weren't going to be cheating ourselves.

A lot of the Rat Race part of the game CashFlow 101 is about stepping up to the plate and reducing fear of making a wrong move and ending up in bankruptcy. Plus, it encourages the purchase of Real Estate, land and businesses over stocks, bonds and certificates of deposit. I mean, I always start out with cheap stocks to get some initial cash, but once I can start to buy real estate with any regularity, the stocks largely get ignored.

Another big part of the Rat Race part of Cashflow 101 is the luck of the die, as with any game. Last time we played, Joel had 3 kids and was downsized 4 times over the course of the 4-person game, and thus he was far far away from getting out of the Rat Race. This time, however, he landed on more Small Deal/Big Deal spots and on The Market more, enabling him to buy into and sell off real estate and stocks. Unfortunately, he also landed on a Market square that earned him a card which sent both of his rental houses into foreclosure before he could sell one!!

The dice were with me last night. I ended up getting out of the Rat Race twice before Joel got out the first time.

We played for about 3 hours before calling it a night, and prepared for next time by selecting our next career path, and both starting with high-paying ones like Doctor and Lawyer to see how much more difficult it is to get out of THAT Rat Race (with higher income and thus higher expenses).

Next week is busy for both of us, so we've left it open as to when we're going to get together again next.

What a great start!!

End of a long weekend.

I took a trip to visit family this past weekend, and talked a bit about investing, but mainly took a break from it and enjoyed myself.

I'm looking forward to the markets opening tomorrow in the US, although really, my play investments aren't going to change much in the next 25 days.

I've still got work to do to prepare for our financial planner/accountant's visit on Thursday afternoon, but it's just sorting statements and plunking numbers into a spreadsheet I already worked out as an effective way to show our spending over the past few months. I'm confident I'll be bringing materials and data displayed in a way that will make my meeting with him productive and easy right from the start.

I fear tracking expenditures in the future, however, as my husband and I make a lot of small cash purchases and don't keep our receipts very well. We'll cross that bridge when we get to it. I think the best mindset for this is one of incremental improvement - if it's better than it was, that's great... yes, it could be better but is your time best spent on bettering it right now, or bettering something else?

That paradigm is part of my cleaning mindset, too, incidentally.

Tomorrow evening I get together with Joel to play CashFlow 101, the board version. Looking forward to chatting with him, playing, and seeing his new investment program on the PC.

Jill