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Saturday, July 26

The Week Ahead

We decided to take a day off from the house project.  We've basically worked on it every day since I bought it last month and my partner is getting burned out.  I have a movie theater mystery shop that we will do this afternoon.  Then we plan to visit the library before stopping at Lowe's to buy a few supplies for the house.

Speaking of the house project, it's going well (pictures coming soon), but there is so much left to do.  We are going to move in as soon as the living room is finished.  When we do move in, only two bedrooms and the living room will be completely done.  So much has been going on:  in addition to new floors and painting, I've repaired faulty plumbing, replaced blown fuses, serviced and cleaned the air conditioning unit, replaced interior doors, and done a thorough cleaning.  We've been able to do most of the work ourselves.  I did call an electrician out to replace the main breaker and check the integrity of the electrical system.  I'm also hiring someone to install new entry doors.  One of the largest unexpected expenses will happen in the coming weeks:  we are having the house fumigated to treat an active termite infestation.  I was under the impression when I bought the house that it had been treated already, but apparently not (and I did not require any termite bond or inspection because I really wanted this house).  This alone will cost $1,900 and we can't be in the home for three days.  They are putting a tent over the house to treat it.

Next week I have a few restaurant shops lined up.  On Friday I have a local route of gas station audits.  Saturday we fly to Vegas.  We are working a 6 day hospitality event in Laguna Beach, CA and then will spend five days playing in Vegas.  The work basically pays for a free vacation, plus it gives us a break while the house is being fumigated.

Things are coming together quickly.  My goal is to move everything into the new house in mid-August.  The remaining improvements can be made as my bank account recovers from all this spending I've been doing.

Monday, July 21

Update on Negotiating High Medical Bills

During our Las Vegas vacation I had a health scare when I swallowed a piece of meat down the wrong tube.  In trying to cough it up I got bronchitis, but before that diagnosis I was concerned I was choking.  The urgent care doctor refused to do anything (after charging me $100 to refer me to the Spring Valley Hospital  ER!) because he was concerned about the severity of my symptoms.  I went to the Emergency Room and sat in a room for three hours.  A nurse took my blood, a technician performed a chest X-Ray, and my vital signs were monitored.  The cost of those services was nearly $5,000 (that's not a typo!), but after the insurance benefit, I was responsible for almost $3,000.  Since I have a high-deductible plan, the only benefit of having insurance in a case like this is that I pay a lower rate that the insurer has negotiated.  I am responsible for 100% of the bill until my medical costs exceed $6,500 in a calendar year.

After receiving the first of three bills,  my initial thought was that an error had been made.  No one pays $5,000 for bloodwork and a single X-ray, do they?  I called the hospital's billing department.  One trick they use to discourage you is make you wait on hold.  It was 40 minutes before I spoke with a live person, and every 20 seconds I was encouraged by a recorded voice to make payment online or through the automated system.  When I finally spoke with someone, I felt like I was talking to a brick wall.  The employee was not helpful at all, insisting that my bill was accurate and that they absolutely do no discounting.  She did offer me a convenient payment plan, but she missed the point that I thought they were ripping me off.

Yes, I said it.  The Spring Valley Hospital in Las Vegas ripped me off.  But rather than accept this nonsense, I did some research online.  I called in reinforcements in the form of a medical bill negotiator (I used My Medical Negotiator, but there are a couple of options out there).  It took some time, but the person I worked with, Dennis Dobecki, was able to negotiate a 30% discount.  That's not a huge amount, but it saved me $400 on the ER bill.

I also submitted the bill I received from the doctor who "cared" for me.  I saw him for about three minutes, and he never laid a finger on me.  Those three minutes were billed at $1,481.  I haven't paid it yet, but am crossing my fingers that My Medical Negotiator can work some magic on it, too.

Saturday, July 19

Remodeling a House on a Budget

I've spent much of the last three weeks working on this foreclosure that is about to become my home.  I just hate to spend so much money on myself, so I've been working overtime to find frugal ways to make this house into a home.

I wanted to share a few of the ways I have saved money while remodeling my new home:

  • I'm painting the house using Oops Paint.  When the home center mixes a batch of paint for a customer, sometimes the buyer changes their mind about buying the paint.  It's perfectly good paint, and the color is sampled as a splotch on the lid.  I've bought several $44 gallons of paint for $5 each.  I figure I will save about $200 by painting my house with someone else's unwanted color.
  • Every time I visit the home improvement store, I look at the clearance shelves.  Yesterday I bought a $2,800 Samsung French Door Refrigerator for under $1,200.  It was a floor model and there is a noticeable dent on the bottom front.  The same warranty applies and it is being delivered to my home for free.  I've found numerous other items I needed that were on clearance, ranging from blades for my utility knife ($.25 for 5) to dying plants for the backyard (50-70% off original price).
  • On top of the clearance prices, I use 10% off coupons or $10 off a $50 purchase Project Starter coupon.  I buy these in bulk off ebay.
  • Probably the most impactful way I am saving money is by doing most of the work myself.  While not always fun, it's very rewarding when I successfully complete a task.  For this project, the DIY work includes painting, laying vinyl plank flooring, replacing faulty plumbing, replacing out electrical outlets and switches, installing interior doors, and building a wraparound deck.  There's plenty left to learn, and I hope I can tackle new insulation, sheetrock and cabinets myself.
I'm enjoying this project because I know I get to live in it soon.  I keep from burning out by only working 4-5 hours at a time.  Some days that's all I do; others I will return in the late afternoon to do more.  Once we are able to move in, I'l be able to finish the rest of the house more conveniently.  Hopefully in the next week or two I will have enough of the house ready so that we can do just that.

Wednesday, July 9

Rental Property Portfolio: Mid-Year Update

I stopped reporting how much I spend to maintain my rental properties at the end of last year.  I wanted to post a mid-year report on how my rental properties are performing.

Currently I own 12 houses.  I live in one of those and two are held by my retirement account.  Since I won't be able to touch my retirement account for a few decades, I never report the income I receive from those two properties or the expenses associated with them.  That leaves 9 properties that I rent and report in my monthly income:  4 townhouses, 1 condo, and 4 single family homes.  They all are located in the Birmingham, AL metropolitan area.

When I moved to Florida in 2012 I planned to hand off the management of my Birmingham properties to a property management company.  The plan was to do this whenever a property changed tenants.  After turning over the first two (both are townhouses), I sat back and watched how my property manager performed.  Frankly I have been disappointed.  When I managed my properties I never had more than a couple of weeks of vacancy.  One reason for lower vacancy was that I accepted tenants with blemished credit, while the management company has supposedly tighter standards.  Vacancy is probably the biggest expense a landlord has, so I give the management company an "F" when it comes to placing tenants.  It took about 6 months for each property to be rented, and one of the tenants has been nothing but drama (so much for tighter standards).

Of the 7 remaining properties, one has been handled by a different management company since I bought the single-family home in 2009.  I've had the same tenant in that property, and all is great.  The other three single-family homes are also doing well, as each has had the same tenant for years.  That leaves two townhouses and one condo.  The condo is low maintenance, but its small size and nosy neighbors means I have a lot of turnover.  Fortunately, my exiting tenants have always referred the next tenant and there has been zero vacancy at my condo.  One of the other townhouses has an excellent, low-maintenance tenant:  I placed the tenant in August, 2012 and have had zero calls from the tenant for service.  The tenant has his rent deposited directly into my account as a payroll deduction through his employer.  The last townhouse is the one I am always considering evicting.  The tenant has been with me for three years, and he's always behind on his rent.  But, every time I am about to evict him, the tenant pays up.

My Frugal Miser's 1H 2014 Rental Property Income Statement

Income:  $40,628
Mortgage Interest:  $4,340
Personal Interest:  $1,004
All Other Expenses:  $11,658

Net Income:  $23,626

Year to date, the largest expense was property insurance ($4,879), followed by mortgage interest.  Nearly $3,000 was spent on repairs and improvements for the condo, primarily for the laminate floors which replaced the carpet throughout the condo.  

For the first half of 2014, I had nearly $4,000 per month leftover after all my rental property expenses were paid.  

Monday, July 7

My Frugal Miser - June Income: $7,925

One of the reasons my expenses were so high in June was because I went on a mystery shopping road trip.  Virtually all of the $1,159 vehicle depreciation expense was for miles driven while mystery shopping.  And, because I was paid for these shops in July (the check for that one route was $3,600), my income in June was very low... I deducted the hotels and service reimbursement charges from the income that I did receive in June, making what I report here seem even lower.

There is more drama with the rental properties.  A tenant at one of the two managed townhouses reversed the $1,500 she paid in May for back rent and reimbursement for utilities.  I wasn't billed for my negative balance, but I won't be receiving a check from the management company again until I bring my balance back to a positive amount. I received rent from all my other properties.  Finally, I sold the S-10 to Carmax and am reporting the $1,500 I received in Other Sources.

June Income $7,925

$174 Mystery Shopping
$6,220 Rental Income
$1,531 Other Sources

  • I don't include transactions in my retirement accounts.  This includes rental income, dividends and capital gains and losses.
  • I include merchandising and hospitality work in the mystery shopping category since the companies that I shop for provide this extra side work. 

Saturday, July 5

My Frugal Miser - June Expenses: $5,724

I finally closed on the house in June.  Starting in July I will have considerable home repair expenses from all the upgrades the house requires.  We aren't able to move in yet - the HVAC system needs to be replaced, plus it would be nice to have floors.

There were some large expenses this month.  I insured the house for a year.  I took the highest deductible, highest hurricane deductible, but also the best liability coverage (there is so much fraud in my area that I want to be protected against lawsuits).  That was $900.  I also upgraded our phones.  The battery was no longer holding a charge, and I had gone cheap when we bought the old phones by choosing a single band phone that did not have a signal in many places outside Florida.  The new phones cost $650, but I will receive a $200 rebate in the form of a VISA prepaid card.  We have Republic Wireless, so the phones are not subsidized.  Since we don't currently have Internet access I did upgrade our data plan to 4G.  Finally, I spent $772 on two round-trip tickets to Ecuador.  One of my 2014 goals is to travel internationally, and we will do so in September (more details to come).  The flights were significantly less expensive (more than $200 saved) than they had been every time I checked before, so I pulled the trigger.

I haven't paid the medical bills from the ER visit while we were in Vegas.  On principle, I am working with a medical bill negotiator to try to reduce the fees.  My bill was nearly $4,000, and all that was done was one chest X-Ray and blood was taken.

June Expenses:  $5,724

$426 Auto ($58 for service, $3 for car wash, $3 for tolls, $362 for fuel, $1,160 for depreciation)
$0 Bank Fees
$8 Clothing
$0 Computer
$78 Entertainment (movies, gambling, alcohol)
$265 Food
$0 Gifts Given
$687 Household/Housing/Home Repair
$900 Home Insurance
$245 Health and Dental Insurance
$0 Investment Expenses
$0 Medical/Dental
$0 Miscellaneous
$143 Personal Care
$0 Subscriptions
$0 Taxes
$979 Utilities
$772 Vacation and Recreation