I am kind of disappointed this morning since I found out yesterday that the refinance on the rental homes would not work. Apparently, my credit score is not good enough. Ever since 2008, it has been incredibly difficult to get credit so I will be focusing on getting out of debt instead.
Ultimately, it turns out that the net impact on the monthly cash flow won’t be all that different without the refinance. That is because I had to have 2 appraisals and one came in below the expected amount. As a result, I had set aside $10,000 to bring to closing in order to save about $650-$700 per month through decreased payments.
Now that the refinance won’t be going through, I will using that money to pay down a credit card balance in order to save over $2300 per year in interest. Once I get this card paid off which should be in the next few months, I will save almost $800 per month in cash flow which can be added back into the budget. So all is not lost with plan B.
Then once that card is paid off and I get a little more credit card debt eliminated, my credit score may very well be in a better place that I could refi the rental houses, decrease my interest rate and my term. I don’t anticipate rates moving up any time soon. I would think that I have a year or more to get a better interest rate.
If not and rates start to increase, that would mean that the economy is heating up which will only help my retirement account investments in the stock market. So I look at it as a win-win.
With this behind me for the time being, I can now focus on getting the business transaction complete and meeting my 2 goals for this year which are losing weight and paying off debt. In fact, I am about to launch a blog solely devoted to working my way out of debt which should bring some increased accountability and motivation to the equation.
I will let you know when it is up and running.
Here are the recent carnivals that have included articles from my blogs:
Boy, have I been busy these past two months. The activity has kept me from posting as much as I would like, but it is more important that I get some of these things done. I don’t have time to go into all the detail, but will share just a little bit. The good news is that I will have additional material for posts in the future.
These are the items that have consumed the majority of my time away from work:
1. Canceling a Timeshare Contract
There is a lot to this story and I will share every detail later on when I have more time. Actually, I might just end up copying and pasting some of the letters that I have sent. The short version is that my wife and I got sucked into a presentation while trying to get discount show tickets in Vegas. We left unsure about the purchase after signing paperwork. We tried to cancel and they tried to run the transaction anyway. We finally got it cancelled. No money has yet changed hands, but I do have a few loose ends.
2. Refinancing Rental House Mortgages
I have been working to refinance 5 rental houses. Of course, this involves a ton of paperwork, signing a bunch of stuff, arranging appraisals with the tenants and contacting everyone so we are all on the same page. The plan is to decrease the interest rate, decrease the term and decrease the monthly payment. So far, all is going according to plan but one of the appraisals came in lower than I would agree with. It means more money at closing, but the savings will be big.
3. Negotiating Purchase of a Business
I have also been working to negotiate the purchase of a local business. This occupies some time as I have reviewed the books, met with the owner and spent a weekend back and forth negotiating points and creating a framework for our agreement. The next step is to meet with the banker on the Monday after I get back from a South Carolina golf trip. I am really looking forward to the trip as the time away will be very relaxing.
Going forward, two of these items will no longer occupy a bunch of my time. Now if we purchase this business, I will have to spend some time each week looking over and reviewing numbers and signing checks. But even if it is five hours per week, it should still be worth it. I can share more details later as well.
Here are the most recent carnivals in which my blogs have participated.
CFM is Cash Flow Mantra (which is this blog)
GPM is Grand Per Month
PT is Penny Thots
Wow, I can’t believe how busy it has been last week and this week. I will have to write a post about it sometime to explain what has been going on. Suffice it to say, that it is certainly interesting and will make for lots of good posts in the future. As a result of all that has been happening, I am just now getting to the obligatory goals post for 2013.
It should be a pretty easy post though, because I only have 2 main goals: Pay off some debt and lose some weight.
1. Pay Off Debt
I am having a new blog designed to help with this goal and will probably put more information on that site once it is up and running, but I am wanting to pay off quite a bit of debt this year which should help with the monthly cash flow. I have put together a spreadsheet and a plan and so far, January is going according to plan. It should be a lock for the first half of the year. I am a little more concerned as we get into summer.
You see, the plan is to pay off a certain amount of debt each month and maintain a cushion since my income can fluctuate somewhat from paycheck to paycheck and the budget is pretty tight although it is better than last year. I have enough in the cushion to make it through at least May even if the income comes up short or I have an emergency. But, I want to be able to continue the momentum as long as possible so I will be keeping a close eye on the extra funds.
2. Lose Weight
Unfortunately, yesterday I was the heaviest I have ever been in my adult life. Terrible, I know. I suspect that it has something to do with the amount of stress that the debt had been having on me throughout the last half of the year. Now that I have a little breathing room and a plan for creating more room, I should be able to focus more on my health. I do continue to lift weights and plan on playing softball in the spring and summer, so I have to get to a better playing weight by losing 15 pounds by May. That is only about a pound or a little more per week, so it should be quite feasible.
The way I look at it, focusing on just 2 main goals for 2013 will increase my odds of success. I really don’t have any blogging goals for this year since I am really just going to consider it a hobby and will write when I have something to say and feel like I have the time.
If what I am working on pans out, then I will have enough to do and can make money at the same time.