Money Monday: Flying High on Financial Security

paragliding turkeyThis week has been tough. Moving is stressful. I wish I could go on vacation–that’s a picture of me paragliding in Turkey. Add to the mix that my stolen Honda coupe still has not been recovered and I’m a visually-impaired Asian driver trying to get used to driving Dean’s big ass SUV.

We’ve purged at least 20% of our possessions. Dean has been selling shit on Craiglist, dropping off at Goodwill, and handling AT&T, cable, and other vendors and contractors. I am overseeing all the logistics of being a landlord: checking employment, rental history, putting together the contract, etc. We also need to buy a washer and dryer, change our address for all of our bills, install mailboxes (the place came without mailboxes!), remedy items from the inspection report… The list is never-ending.

We are tripping over boxes, at each others’ throats. Dean works from home so I have unreal expectations that he’ll have accomplished all these household tasks as if he’s an onsite handyman. I get upset. He complains about everything he has going on. I point to my stomach, “Yeah?! Try growing a human!”

Despite the madness, life is so good. Buying this property has secured our financial future. Here’s why.

1. It’s not our dream home. 

When you go looking for your dream home, you introduce irrational emotion into the equation which leads to unrealistic offers. That perfect house is one that everyone else is eyeing too, and suddenly you find yourself in the middle of a bidding war, contemplating submitting an offer waiving all of your rights as a homeowner because you simply must have it! How many people do you know who bought their dream home, then several years later they were in foreclosure or declaring bankruptcy. We bought a 2-unit property, brand new construction, adjacent to a very busy street (it’s almost like a freeway). Zero character, zero charm.

2. It made financial sense.

I ran the numbers and drummed up every single worst case scenario, and financially, buying this home made sense no matter what. Let’s say Dean and I both lost our jobs. We could easily rent out each of the units due to its highly-coveted commutable location. With the combined rental income, we could pay the mortgage, the property taxes, and use the excess to cover the rent on another apartment in the city. Hell, we could move in with my mom and dad and pocket several thousand dollars a month.

3. We did our research.

What’s it like to be a landlord? What rent should we charge for an apartment in our location? Dean and I both have experience with renting, so doing the research wasn’t hard. Test the market. Place an advertisement or post on Craigslist and see what kind of interest you get. When we posted our ad, I had HR admins from Apple and Genentech begging to get their employees into our apartment.

Is it luck or business savvy? Chance or calculated risk? I’m very optimistic about our future and so glad that we’ve laid this groundwork for the arrival of our most precious investment (the baby) coming in May!

Your turn:

What decision-making criteria did you use in buying your home?

How have your real estate investments turned out?

What is the best life decision you made that helped anchor your financial future?

Dude, Where’s My Car?

bartThis past weekend, we went from renting a 1-bedroom apartment in Lower Nob Hill to homeowners of a duplex in Glen Park. Yes, Glen Park is still in the city of San Francisco! How people can live in the Bay Area and not know where Glen Park is baffles me since Glen Park is a stop on the BART train line. That same train most people take to go to the San Francisco International (SFO) airport. Cmon people! I get these dazed and confused looks whenever I mention my new neighborhood, which I can understand from people who aren’t from here. But locals should be ashamed.

We had been on the hunt for a home for almost a year. Went to an open house and less than four weeks later, we were moving into our new home. Is that record time or what?

Saturday was our move day. Gain a home, lose a car. That’s right. The morning of our move, we discovered our car had been stolen from the safety of our parking lot in Nob Hill. I should add that our parking lot is manned by valets from early morning until late at night, so someone decided to take it on a joy ride in the wee hours. The police officer who filed my report and my insurance both said that 95-99% of the time, the car turns up within a week.

In buying this property, we’ve also become landlords. The rainbow after a grueling weekend came in the form of a lovely couple who we’ve selected to be our neighbors. They, too, are expecting a baby which is awesome. My little one will have a built-in playmate. We are thrilled.

Now…just waiting for my car to turn up.

Closing on a Home

loanHas anyone taken out a mortgage or closed on a home recently? Holy shit!

There isn’t a single day that’s gone by where I haven’t had to email or fax statements, transactions, and responses to questions from the real estate team, the mortgage team, the insurance team, and the title company. I’m convinced that you have to work a day job and be available online with access to all of your financial accounts to get this thing closed. It has been insane.

Here’s an example of one of the many items that the underwriter dug into.

Underwriter: We need you to verify payment of your rent for the past year.

Me: Sure, here’s our landlord’s home phone and cell phone number.

Underwriter: We can’t verify the information since he’s an individual and not an official rental property management company.

Me: So what do you want me to do? He’s the one who owns the building.

Underwriter: We need you to prove that you paid rent every month.

Me: Here are my checking account transactions.

Underwriter: Why do you pay your rent in cash?

Me: That’s something you should ask the landlord.

Underwriter: How come sometimes you withdrew $1720 and sometimes $1740. I thought you said your rent was $1700.

Me: The rent is $1700! Sometimes we withdrew extra cash. What does it matter to you?!

Underwriter: We’re going to need you to sign a statement saying that your rent is $1700.

As background, I work for the company that I’m getting the loan from. They know how much I get paid every two weeks, what my annual bonuses have been, my stock allotment, and how much sits in my 401k account. What does it matter what my historical rent history has been? All that matters is that I make enough to be able to pay the mortgage on my own, and that doesn’t even include my husband’s compensation. So what is the big deal. So stressful and frustrating!

For those of you wanting to buy a home and thinking that saving enough for the down payment is enough, it’s not. You need to have a large excess amount of money on reserve even after your down payment and the fees are accounted for.

Welcome to home ownership! And I thought having the winning offer was the hard part.

Pregnancy Question #2: Diaper Decisions

diaperMama readers, I need your help. I’m stumped. Everything I’ve read so far has led me to believe that cloth diapers (over the duration of diapering your child) are less expensive than disposables. If that’s the case, that cloth is cheaper and also better for the environment, why don’t I know a single person who has ever used cloth? It’s all about Huggies or Pampers.

I’ve also looked into diaper delivery services in San Francisco (both cloth and compostable options) and I find the prices to be unbelievably reasonable–similar to the cost of getting your daily fix of caffeine at Starbucks.

Can I ask what diapers you use/used?

How did you decide on that brand or service, and why?

Would love your thoughts within the comments of my blog (versus Facebook) for all future generations of mamas who have the same question.

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Take a look at my previous pregnancy question and how readers responded:

Pregnancy Question #1: Epidural vs Drug-Free

What We Can Learn from Justin Bieber

'Justin Bieber:  2011 Golden Globe Awards Dressy' photo (c) 2011, iloveJB123 - license: http://creativecommons.org/licenses/by/2.0/Justin Bieber has a special place in my heart because he took on the Philippines (my parents’ native land) as one of his charitable causes, raising over $3 million in the aftermath of Typhoon Haiyan. I am heartened that he used his influence to rally so many of his fans to assist when tragedy struck. Obviously the kid is no saint, as he was recently arrested for a DUI, drag racing, and drug possession.

We see this happen repeatedly: child stars with so much fame and power, spiraling out of control. It’s easy to shake our heads and criticize, but how many of us can truly understand what is going on. We’ve never been exposed to such wealth and celebrity.

Justin is a mere 19 years old. Let me tell you what I was doing when I was that age. I was fresh out of the dorms, living in a small 3-bedroom apartment with four other girls. Sure I was living away from my parents and on my own, and yes I consumed my fair share of alcohol underage. But I was also disciplined because unless I wanted to fail out of Biology and Organic Chemistry, I needed to be focused and I needed to study my ass off, if ever I wanted to live a life that didn’t consist of eating Top Ramen for dinner.

Contrast my life with Justin’s. He’s not wanting for anything. He’s achieved fame, fortune. He has nothing to strive for. We can dismiss his life as another celebrity gone wrong. It’s not something that can statistically happen to our normally raised kids. Yet how often do we see addictions manifesting in young adults, prevalent underage drinking and drug use, and teenage pregnancy?

Where is Justin’s mother? She seems to be praying, as she has called on the public to refrain from criticizing and join her in praying for her son. While I’m a firm believer in prayer, I also believe that God helps those who help themselves. Justin’s mom needs to be by her son’s side like a fly on shit. He’s become an immature spoiled brat, lacking guidance, and needs discipline. Children need and crave discipline!

Are you your child’s best friend? If so, that’s a RED FLAG. My husband is my best friend. My kid will never be my best friend. I am there to advise, guide, and discipline. That is a parent’s job. If ever you suspect your kid is going off the rails, heed my words: LIKE A FLY ON SHIT. You should know who their friends are, who their friends’ parents are, where they are at all times, what they like and dislike, what motivates them. Be a parent, not a friend.

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