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When I was ready to purchase my first investment property I was focused on single family homes with a yard.  Many of the homes I looked at would soon need new windows and siding, or other major repairs.  As I stretched my budget for a house, I worried I would not have enough money to handle an emergency once a tenant moved in.  When I shifted my search to condos it seemed to take away that concern.  The home owner's association dues would cover the exterior maintenance and  landscaping, leaving only minor interior maintenance for me to handle.  Most condos had a lower purchase price than  homes, and the rent I could charge at the condos would cover the mortgage while the rent for homes would not.   

Besides the normal investment considerations of return on investment, condo investors also need to know about Home Owner's Associations (HOAs).  HOAs enforce the community rules (CC&Rs), maintain the building exteriors, and community areas.  As an investor you need to research if the HOA has a limit on the number and type of rental units (this is known as a rental cap).  Beyond that you need to find out if long term leases required.  Most HOAs do not permit rentals for less than 30 days . . . so Air BnB is not an option for many condo investors.   Next you should request budget documents from the board to see if the HOA is properly funding the reserve account.  Be advised that a significant budget shortage could mean that litigation or special assessments are on the way; and that would jeopardize your ability to get financing.  It is also important to walk around the community and make a visual inspection for signs of neglect which may include overgrown landscaping, faded paint on the siding, loose shingles on the roof, etc.    
 

I found a condo in a well managed community, the reserve accounts were well funded, the exterior of the buildings and landscaping appeared to be in good order.  It has been a great investment for me, and I think  first time investors should consider purchasing condos.
 

Photo via Pixabay

Be prepared to feel the adrenaline, nerves and stress hit you from time to time as you go through a major move, with kids and pets in tow. In the days running up to the big day, you’ll be downing martinis before 8 a.m. to avoid a nervous breakdown. The Internet is littered with horror stories of parents dealing with unruly, heartbroken kids that were impossible to work with before, during and after the move. 

Fortunately, there are things you can do to create a smoother move for adults and kids alike. The following tips should help you know what to do to ease the pain of the move:

1. Give Your Kids the Power of Choice

Children often feel powerless when faced with the prospect of moving. This overwhelms them and creates all kinds of fearful future scenarios in their minds. During the process of moving, then, grant your children a degree of power and control concerning the move, within reason. Maybe tell your kids you’ll let them decide how to decorate their room, what kind of yard they’d like best, what kind of neighborhood they’d like to live in, etc.

Even something as simple as allowing your kids to pick the color of their room, or the kind of wallpaper to use, can do a lot to give the move a positive spin in their eyes.

Another nifty idea is to give each kid a box to decorate that will hold their favorite toys and possessions. That way when the move is complete, and your children feel a little lost among the sea of boxes, they can easily locate their special box and be reacquainted with their favorite items.

2. Hire Professional Packers Who Do It All

If within budget, hire professionals to pack you up and handle the heavy lifting, truck loading/unloading, and transport so that you and your partner can focus on the kids. Money-wise, this isn’t always an option. However, if you can just afford it, go for it. It will spare you all the stress and hassle – the kind that gives you silver hairs before your time. Remember, no medal was ever awarded for Most Harried Mom and Dad During a Move. Just take the time to compare prices. 

If hiring do-it-all movers is out of budget, tap into your network of babysitters, friends and family members to help as much as possible. Everyone knows how gargantuan a task it is to move with kids – undoubtedly some members of your network would be happy to help with the move, so don’t be afraid to ask. That’s what community is for.

3. Squeeze in a Fun Trip

If you are moving long distance, you have a few days between packing up the old house and when the movers arrive in the new location. Why not escape and take a mini-vacation with the kids? Whether you go seaside or go camping or simply Airbnb a place that is fully equipped for family fun, taking a fun, welcome break is the idea. It’ll restore sanity for the whole family.

4. Unpack the House in a Certain Order

Unpacking the rooms that are most important to your children first will help you get them out of your way. Unpacking their bedrooms first, the playroom second, and the kitchen third, in this order will do a lot to keep them busy and start making them feel more at home. The idea is that they’ll have fun rearranging their rooms or playing with long-forgotten toys, leaving you to focus on unpacking the rest of your belongings.

In Conclusion

There is always an undercurrent of melancholy as you pack up the old house, calm children through their complaints about the move, and deal with the stress of the thousand tasks you have to do related to the change of house. But a brighter future awaits you – a new and better job, a better home maybe, new scenery, a new town, a new community. Focus on the positives, follow the above tips for an easier transition, and you’ll be perfectly settled in your new home before you know it. (Your daily morning martinis a thing of the past.) 

Good luck with your move!

You've found your true love, and you've decided to get married.  At first you hear wedding bells, then you meet with a wedding planner and before you know it: “Ca-ching, ca-ching”... you are spending your entire savings on an extravagant wedding to dazzle your guests.  (According to Fortune Magazine  the average cost of a wedding hit over $35,000.00.)  After the honey moon you return home to your apartment and start the saving process all over again hoping someday you can afford a home. 

An Emory University study suggests that spending big on engagement rings and weddings increases the chance of divorce.  To ready more about the study search for it by name: ‘A Diamond is Forever’ and Other Fairy Tales: the Relationship Between Wedding Expenses and Marriage Duration.”   

Spending a lot of money only to get divorced sounds like a bad idea to me.  As luck would have it, my now husband is a savvy guy when it comes to money.  Shortly after he proposed we mutually decided on a modest family-centered wedding, and invested our savings as a down payment on a townhouse.  The townhouse was was much better than the apartment we were renting, and we spent our first year as newlyweds living in the townhouse.  Fast forward to a year later and we have rented out the townhouse and are saving for our next investment.

What if instead of spending that small fortune on a wedding, you and your  spouse purchase a house like we did.  The median home price in the Portland Metro Area is about $400,000.00, and $35,000.00 would make a nice down payment.   

Start your time as a married couple by setting yourselves up for financial freedom.  Now that sounds like a great way to start out your lives together. 

Many of my friends and acquaintances wonder how I was able to afford a down payment for my home. These people in my peer group are intelligent, hardworking people that make good money. Some even make better money than I do, but say they are not able to save for a down payment.  

This is where “The Latte Close” comes into play, and it’s a trick I learned selling cars. When a client was not sure they could afford the car they wanted, “the latte close” was introduced into the conversation. Here’s how it works…I say “Mr. or Mrs. Customer do you drink lattes?”  (Usually said customer showed up to the car dealership with a Starbucks cup in hand making my pitch super easy.) He or she would respond, “Uh, yeah!” and point at their cup. I would respond with “Perfect, how many times a week do you treat yourself to a latte?” Usually the response was “four or five times a week”. Next I would say: “Does each beverage cost about $5.00? SPOILER ALERT…We all know the answer, it is inevitably yes.  Let’s cut to the punchline “…so Mr. or Mrs. Customer is it fair to say you spend $80-$100 a month on lattes? You could cut your latte habit in half and drive home in your new car today.”  

The point with “The Latte Close” back in the day was to sell that customer a car. Don’t lose the lesson; applying “The Latte Close” is a metaphor for a savings strategy.  I like to call it a savings strategy because some people feel like “BUDGET” has a negative connotation. Maybe you don’t buy lattes every day. I sure didn’t. What I did was look for opportunities to cut back on my own spending while still enjoying my life. I love good food, but only eat out at restaurants a few times a month because doing it more often would “eat up” my potential savings. I learned to be a pretty good cook and always try new things thanks to following food blogs.  

If you are having trouble finding a place to start saving, apply “The Latte Close” to your life. Do you have a $600.00 cell phone with a plan that costs $100.00 plus a month? You can migrate your phone to a prepaid carrier…they all buy minutes from the big players so you get the same service cheaper. (It’s not a scam; I’ve been using a pre-paid plan for years). Maybe you have a bloated cable TV package and pay upwards of $150.00 a month. Renegotiate that now, or drop most of the channels asap! Maybe you are the guy or gal that always treats your friends to a drink at the bar. Drink at home and invite your friends over instead… you can buy the whole bottle for less than you spend on a few drinks downtown. The money your friends save covers their Uber to get home safely afterwards.  

Saving for the down payment is not about how much you make, it is about how much of your income you can save. Get creative, use a budget app or tool to help you keep track. Try Mint, Unsplurge, PocketGuard, or Wally. These little apps not only help you create budgets, they also keep a watchful eye and can point out areas you can save.  

Back in the summer of 2014 I was in the market to purchase a condo, and the market was hot. I remember a co-worker telling me that I should wait to buy until the market cooled off…she said “You are going to overpay, wait until it’s a buyer’s market.”    

I made offers on places in a multiple bid situations, and they did not get accepted. In June 2014 I put in an offer on a Beaverton condo in the Murray Hill neighborhood. I did my research and made an offer based on what I thought was reasonable for the condo, neighborhood, and amenities. It appeared that I was going to miss out again, as the listing broker told me that there were two buyers in front of me with better offers and implied they were “sure things”.  I briefly considered increasing my offer, and later decided that my original offer was what I was comfortable with. My offer was accepted as the third position back up offer. However, in less than two days the first two offers fell through and my offer was the only one on the table.     In July 2014 my loan closed and I paid $127,000.00, and that was more than anyone had paid for a condo at that location that year. Did I over pay?  Some people might say that, I did. I would disagree with those people. I could afford the payments; and the condo had the amenities and features I wanted. If I purchased the same condo today it would cost at least $180.000.00, my down payment and the monthly cost would also be significantly more. Today I am in an equity position; and my tenant’s rent payment covers the mortgage and HOA dues.    

In the summer of 2015 I was ready to buy again. This time, it took me more than eight months to land the right place. Finally in January of 2016 with 10 competing offers, I got the townhouse that I wanted. I lived in my new home for about a year and loved it before deciding to rent it out. The current market price for townhouses in my Hillsboro neighborhood is $60,000.00 more than what I paid. The rent my tenants pay covers the monthly cost.   

Remember the right time to buy is when you find a home that you are happy with, at a price you are willing to pay.   

Whether  you get a conventional loan, or a FHA loan, if you put less than 20%  down you are required to pay “private mortgage insurance” (PMI). Note  that the FHA calls theirs “mortgage insurance premium” (MIP); it is the  same thing.  The insurance is there to protect the lender in the event  that a buyer defaults on the loan.  The annual premium for PMI/MIP  varies from 1%-2.5% of the loan amount and is based on the borrowers  credit and loan amount, and is usually charged in addition to the  monthly principal and interest payments.  Some lenders charge an upfront  fee and a monthly insurance premium.   

The  one thing that I wish I knew before my first purchase was that I could  pre-pay the PMI premium, have a lower monthly payment, and save  thousands of dollars.   Here’s one  of my actual loans: $205,000.00 purchase with a 5% down payment  ($10,250.00) on a 30 year fixed loan, and the PMI payment was $144.00  per month.  If I paid according to the regular amortization schedule and  got the loan down to the 20% it would be after making 96 payments of  the $144.00 and that would cost $13,824.00.  Paying the PMI premium up  front cost me about $2,500.00, and I saved about $11,000.00.