Welcome to my June monthly update. This is where I update everyone on the passive income business successes and failures as I go through a life without a job.
Yes, that is right.
Life without a job. 😊
It is actually even more amazing than I ever thought it would be. Since I quit my job back in December of 2016, life has been crazy. As I mentioned in last month’s update, we had a crazy busy life for the first six months of 2017.
Now, life has settled down and we are getting back to having a normal life. Our move from California to Arizona is finally finished. Things are out of boxes, pictures are hung, and things are mostly in order.
It’s time to breathe, unwind, and get back to real life.
Moving to Arizona
The move to Arizona has been a great experience and we are very glad to move out of California. Not having a job made it extremely easy for us to move. No need to find a job, worry about getting set up quickly, etc.
The main reason we moved was to be closer to my wife’s parents for our kids. With the kids being 9, 7, 6, and 4, they are at the perfect age to be around their grandparents for a few years.
Here are some amazing reasons why Arizona is better than California for me:
- Laws are less restrictive and controlling
- California has some of the worst laws in the country.
- The government taxes and spends like a drunken sailor
- Gasoline is $0.60 a gallon more expensive in CA
- CA is taxing the people to spend billions of $ on a “High Speed Rail” train system that no one will ride
- CA charges a “Redemption” fee for all cans and bottles of liquid.
- A 24 pack of soda will be an extra $1.20 fee paid to CA
- Cost of living is about 35%-50% cheaper in Arizona
- California $3.99 a gallon
- Arizona $1.89 a gallon
- 2 Liter Soda
- California: $2.99
- Arizona: $0.49
- 1 lb. Fruit
- California: $2.50
- Arizona: $0.99
- Home prices are 10%-20% cheaper
- 3 Bedroom 2 bath
- California: $260,000
- Arizona: $230,000
- 3 Bedroom 2 bath
There are many other benefits but these are the ones that really strike me. So, this move has been a great one for our family.
If anyone is living in CA, I recommend moving out ASAP. In my opinion, the state is only getting worse.
Passive Income Businesses Update
Rental Property Business
Normally I solely rely on property managers to manage my properties. In every area of the country I invest, PM’s have been my best friends.
For my property in Houston, I am going against this part of my business plan. I decided to manage the property myself. Here is a list of all the reasons:
- Newer home with minimal maintenance
- Higher quality of tenant
- Tenant signed a 24-month lease
- The property has already been managed by property managers for almost two years. This has given me a good understanding of the market, home, and how managing will be.
- Rented the property for $1625. Expenses are $1350 with a PM so the margin is getting thin.
- Without a PM, expenses are $1250. That leaves me with $375 a month in profit
- I managed the rehab of this property myself so I know it well and have contractors in place to handle problems.
- I no longer have a job so I have more time to manage the place.
- Just one property to manage. Small headache.
For my properties in Ohio, I absolutely will use a PM for these. The properties are much older (built around 1910-1940). Cliental is much harder to deal with and demand hands on management.
Online Property Management Software I Use
Collecting the rent for my “Rent to Own” properties as well the Houston Texas property was a concern for me. After doing some research on different online companies, I decided to go with Rentigo.com.
There are many other online PM solutions out there. Some are expensive and have lots of functionality, others are cheaper and have very few. I really only needed the ability to collect rent and allow my tenants the ability to pay with check, debt card, or credit card.
Here are the fees:
ACH/eCheck: $0.99 per transaction (I pay for)
Debit Card: 1% (Tenant pays for)
Credit Card: 3% (Tenant pays for)
There are no other costs for using their software, managing tenants, etc. They make money from the transactions.
Once the money is sent from my tenant, it goes into my account within 5 days.
This is the best option for my properties and I am glad I found them.
Akron #2 Plumbing Issues
In June I received a request for maintenance on my Akron #2 property. The tenant was complaining of the main drain backing up and a horrible smell coming from the drains.
With these older homes, built in 1924, plumbing issues can be common. Tree roots, settling, rotting of galvanized pipes, etc. can cause major issues.
I have seem this many times before.
“This tenant reported an issue tonight that when he got home from work, he found a terrible smell coming from the sump pump. No flooding but the smell is really bad so it’s possible the main drain is getting ready to back up. But I’m not a plumber so I’m not sure”.
I told my PM to proceed and see what a plumber says.
Here is what she came back with:
“Just a quick update. Bell Plumbing found potential areas that could be an issue. They would like to do a smoke test for $395 to find out where the issue is exactly. I am waiting for a quote that explains what the smoke test includes and what they think the issues may be.”
A smoke test?! I honestly have not heard of it but thought that $400 for a test is ridiculous. Especially because they have not even tried to snake the drain. Seems like I would just be throwing away money. After instructing my PM for a second opinion, she wrote back saying:
“The other plumber suggest starting with a camera because honestly, no one has any idea where to start in this maze. They are hoping it will tell them where to focus their attention. That is $299 for the first hour and $100 for each hour after that.”
I agreed to the camera because that should be the first option. Not a stupid smoke test…
After they did the camera work, they found some crazy stuff.
The main sewer was plugged up and probably for over a year. They were able to cut some roots and open up the drain a bit but there are a few more clumps in there yet.
Another issue I had was the drain for the washing machine was not draining. Apparently it was a different drain. The plumber recommended breaking up the concrete and running all new pipe. $1600 quote for the job!
After laughing my head off, I told her that there was NO WAY I was going to pay $1600 for a washing machine drain. I don’t care what they do, I am not going to pay that. Ridiculous.
I told her to have the plumber use the big snake machine to root out the problems.
$300 later, the drain is cleared and I didn’t have to pay $1,600. It pays to have experience doing this business because I just saved myself $1300!
Book Writing Business
The launch of my new book “Successfully Unemployed” went extremely well!
It went live on June 23rd for a soft launch. This was for everyone on my launch team to get a free copy of the kindle book from Amazon and submit their review.
The soft launch is crucial for the hard launch to go well. A book needs many good reviews before it goes on a hard launch.
On June 26th, the hard launch began. I used many free and paid promotions with online book promotions sites. Monday the 26th was a hard push for as many downloads as possible. It went excellent!
Monday had the most free downloads at 3,123 digital book downloads. This is not including print book and audiobook sales.
Because of this huge push for many free downloads, my book broke into the top 100 in the free store on Amazon. None of my books have ever done this! The best it got was #56.
After this free promotion, I transitioned the book to $0.99. The goal is to get as many sales as possible. If you get a good enough amount of sales, Amazon will automatically put your book in front of many people.
The largest amount of sales was on June 29th with 66 digital copies being sold at $.99. Because of this book launch plan, sales have been doing very well.
To add to this, Amazon put my new book in a great placement on their site. Hot New Release.
A great thing also happened. Successfully Unemployed became my third best selling book on Amazon. Next to my other two books: How to Quit Your Job with Rental Properties & How to Quit Your Job with Passive Income.
So, that is about all going on in my life.
How are you doing with your passive income? Leave a comment below.
Get the FREE Investing Starter Guide
Sign up to get the FREE Real Estate Investing Starter Kit