November is now over and it is time for another update! One more month until I quit my job!! As always, there is so many things going on as I keep building my passive income businesses. November is no exception!
So, as always, each month I give updates on my journey to quit my job. November was very exciting and full of ups-and-downs.
End of the Year Scheduled to Quit My Job Progress
There is a question I am asked often as I get closer to quitting my job. It goes like this:
“So what is the date you are quitting your job?”
Most people expect me to answer something like “December 31st” or some other certain date. The date has nothing to do with when I quit. It is not like I pick a date and am waiting for it. No, for me it is not a date. I am waiting for an event.
What does it mean to wait for an event? That means it is not a date but for something to actually happen before I can quit my job. The event I am waiting for is when the money from the refinance of 4 properties I own in Ohio is deposited into my bank account.
I have acquired many loans in my life and this commercial loan is just the same process. The main thing banks want for giving a loan is stability in the person receiving the loan to repay it. They look at your debt to income and figure out if you can pay back the loan.
In the process of giving out a loan, they document every bit of income and expenses to make sure you can repay the loan. Well, if you quit your job and drastically reduce your income, banks are not going to like that.
Banks Don’t Like It When You Quit Your Job In The Middle Of Getting Financing
So, if I quit my job in the middle of a refinance, they will stop the loan and I will not get the money I need for future investments. I am pulling out 100% of the money I put into the properties and will use that money to buy more properties. So, with the refinance, I will have NO MONEY in the 4 properties but they still bring in $2500 in rents!
As for when I quit my job, I am waiting on the event to finish and the money is in my bank. Once that happens, all I need to do is use up the rest of my vacation time.
Life Is Fragile and I Want to Live It How I Want to Live It
This month, my best friend of 25 years almost lost his life. He was sent to the hospital and actually coded (heart stopped beating) on the way to the hospital. Turns out he was choking in his sleep and wasn’t able to wake up.
Praise the Lord, the doctors and nurses did such an amazing job and saved his life. In the process, he lost his left leg below the knee because of lack of blood flow. At least he is still alive. As he says, he is legless, not LIFELESS!
He is only 37 years old and almost died. This is another example of how fragile life is and all the more reason to quit my job before it is too late. As I stated in the past my step-dad died in August and my mother passed away 3 years ago. They were both 57 years old when they passed.
I am currently 37 years old and I know life is precious. It seems that I better quit while I still have life left. Amazing that I had the foresight to start this process a little over 9 years ago, I am only one month away from quitting.
Quitting my job is scary but, as the Millennial’s say: YOLO!
Real Estate Rental Passive Income Business
My property in Houston Texas has been a problem since I evicted my last tenants in August. It is now the end of Nov and I still don’t have it rented. In my world, this is CRAZY!
Here are the reasons why it has not been rented:
- I listed it for rent in September which is when school had already started. People move in the spring to summer before school starts.
- The economy and rental market in Houston has been hit hard with the low oil/gas prices. Many people work in the oil industry and are losing their jobs because the companies need to cut hours and workers.
- The rent I was getting originally $2,100 was a great rent amount last year. Now, with the changes, I am having to drop my rent amount to $1695 to get it rented. It was listed at $1900 and I got an offer for $1,700 but did not take it because I thought we could get more. Turns out I was wrong. Now I wish I had taken it.
Now, I have tried my hand in selling the property because realtors have been telling me I should be able to sell it for $250,000. Since I bought it for $150,000 and put $22,000 into it, that would be a good profit. I listed the property for $239,000 and only got two people to see it during the open house.
Turns out the market for home buyers has also been hit hard. After two weeks, no offers. I am going to lower the price to $228,000 to see if I can sell it. I wouldn’t sell it for much lower than that because it would not make financial sense. I would basically break even.
I am also going to list the property for rent at $1695 a month. Even at that rent, I will still make $300 a month which is still great. Actually, as I write this, I find that it would be best to rent it out. $300 a month is a great return. This is all because I bought the property at a good price.
New Property Acquired in Arizona!
At the end of November, I acquired a property in Phoenix Arizona! This will be an entirely new area of the country that I am going to be investing in. Now, the big thing is to set up a new business in this area.
The first important thing to get done is to get the property into my name. Once that is done, the second most important thing is to select the best property manager in the area.
After calling 6 property managers, asking all the right questions and judging if I want to work with them, I finally selected one. It only took me about 2 days to do so. Since I have been doing this for so long, I can tell the good ones from the bad.
In the end, I asked myself these questions:
- Can I work with this company/person for a long time
- Do I like talking with them
- Is their price competitive
- Do they answer my questions properly
- Are they willing to bend on their prices
- Do they seem competent as Property managers
Once these were all answered well, I jumped right in and hired them!
Here are the numbers:
Rent amount: $1,200
Mortgage: $750 – 14 Year note (Would be $520 with a 30 year loan)
Property Manager: $75
Homeowners Association: $28
Income: $217 a month!
Bad Side of Rental Properties and Bad Things About Low Value Homes
In one of my properties, a thief broke into one of my vacant homes and stole the hot water heater. After I fixed the door they kicked in and was getting ready to replace the water heater, they came back and stole the furnace!
So, in low value neighborhoods, you need to take into account the crime around the area. The homes in this area rent for $500 and cost $17,000. Great return all around but you need to be ready for bad things to happen because of the area.
The reason why the prices are so low is because of the location. If this property was located in Carmel CA. then it would rent for $2000 a month and would be worth $400,000. With the least desirable locations come crime, evictions, and other problems. A while back, I wrote a blog post about the good and bad things about buying cheap homes. In it you will find more about potential problems with cheap homes.
I personally chalk it up to “Cost of Doing Business”. Even though things like this happen, I am still able to quit my job and live well. Praise the Lord!
Rent to Own Option For the Home
For this home, I put it on Craigslist for sale letting them know it is missing the water heater and furnace. I have since received two people asking for a rent to own.
After thinking about this, I decided to entertain the option of rent to own. I’ll keep you updated if anything comes of this.
Published A New Book In November
How to Quit Your Job with Passive Income – The Ultimate Beginners Guide to Wealth and Riches with 12 Proven Businesses You Can Start Today
This book is a prequel to my first book How to Quit Your Job with Rental Properties and is meant to help people understand what passive income is and how it can transform your life.
In today’s world, we all are expected to live our lives working for someone else. Working 40+ hours a week at a job you hate, for a horrible boss, and wasting your life away for a paycheck. But this book will help you escape the rat race of life and ditch the cubical, assembly line, or dead end job.
How to Quit Your Job with Passive Income has been proven to help many people learn the secrets of passive income that only those who are already rich know. This book has been designed to help guide you through the process of being an employee earning a wage, to a business owner with multiple streams of passive income. This book is for people who suffer day-in and day-out in their J.O.B. (Just Over Broke).
The passive income ideas in this book you are about to read have been proven to produce long-lasting results. I have already quit my job and you can too! All you have to do to make money with passive income is to keep reading. Each chapter will give new insight as you strive to build your passive income businesses.
Get ready for a lifetime of passive income where you have enough money to do the things you want to do without being dependent on anyone for a J.O.B.
Next Book Already In The Works
I have been working for some time now on my next book for Quitting Your Job. The working title right now is Successfully Unemployed.
This book is more about all the lessons I have learned along my journey to quit my job. There were so many questions that I had to answer myself as I planned my escape from my job that will help many people as they plan their escape too.
Here is a little peak at what will be inside the new book and the lessons that will be taught:
- My Path to Quitting My Job
- Should you quit your job
- Learn How to Be An Entrepreneur
- What do do about health insurance
- What do you do when your boss finds out you are quitting your job
- Living Off One Income
- Grow Your Business Before You Quit
- Tell Your Boss early
- Add another stream of income before you quit
- Work hard on making your business solid with regular income
- What an Accountant Says About Quitting
- When is the right time to quit your job
- Vacation Time
- Find the right time, event, or situation to quit
- Refinance Everything
- Pull Ripcord in case of emergency – Surprise to Help You Through the Tough Times
All of these lessons I learned the hard way. So, since I have already blazed the trail, you can follow my lead and plan your escape by following my lead.
How is your passive income doing? Leave me a comment below. I’d love to hear how you are doing. Also, feel free to send me an email: email@example.com
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