So the time has come. Miel is now leaving towards Afghanistan – but will be meeting a dear friend for a quick layover in London en route.
James has one more day in the great state of Oregon, but will be spending it with family, as Miel is absconding with the laptop – oh, no!
We’ll catch you in another time zone, when we’ve settled in from our trips.
Don’t forget – save at least ten percent of your income, live within your means, and bring snacks for the airport!
Cheers,
Miel & James
Hi All,
Just wanted to follow up on our last two postings. It turns out that the place we were looking at in Portland is overpriced relative to comparable properties in the same neighborhood. Since the we’re leaving the state tomorrow, there isn’t time to do a proper job house shopping, so we’re putting the effort on hold until we’re able to get back together in the winter.
Frankly its a little disappointing. Doing real estate deals can be a great deal of fun.
Best,
James
Hi All,
We are spending one of our last days in Portland trying to sort out the details for the potential real estate deal. Today we have meetings with our real estate agent at the place we are looking at as an investment rental. We are also making calls to sort out lending.
The owner of the place we are looking at is willing to do owner-financing. The deal is though, that she wants $50k down and 7% for thirty years fixed. Personally we thinking that over twenty percent down, the asking price is $220,000, is a bit steep. James also thinks that we can get a slightly better interest rate as well.
For us, the only advantage to going with the owner financing would have been to have a lower down payment without the penalties of PMI and so forth. Given that we happened to find this place before we had taken the time to save all of the downpayment, this would help us in making this happen.
At any rate, we’ve got our last day in town with several meetings for this potential deal. Yesterday we met with my sister’s realtor and it was good to talk things through with her and her partner.
While this particular place we are looking at is a FSBO, and obviously the seller would prefer to keep agents out of the deal to save her some money, we still feel that we are in a better position to have representation. Aside from not having done all of the sales paper work ourselves, the major issue is that we are also both out of town. In the end, even if part of the agent expenses get passed on to us – through less willingness to negotiate – we think this would still be money well spent towards making this investment happen.
Best,
Miel & James
Hello All,
We’re still in Portland, OR visiting family and getting to know the city. Its a bit of a gloomy day here so I’m bivouacked in a coffee shop on Martin Luther King Boulevard getting this posting out.
The good news is that we may have found a prospective rental property in North Portland. When driving around we accidentally saw a nice little one bedroom on the 7000 block of North Omaha street with a for sale sign in the window. It turned out that the owner was available to show the place, so we went in and had a look. After about a half hour of looking the house over, we decided it was a potential buy and wrote down the sellers contact information.
There are some thing we need to consider before making the final decision. For example, when dealing with real estate, its important not to commit before doing comparables on the asking price and potential cash flow. It also seems sensible to evaluate the impact on our income tax situation and to determine the hassle factor involved in finding and screening tenants.
There are several reasons for buying a place in Portland. Of course, we’re obviously interested in profit. But we have personal reasons as well. As you probably know from the title of the blog “Dual Income No Kids“, we don’t have children yet. However, at some point we’d like to start a family and have settled on Portland for a number of reasons. Owning property is a great way to start becoming more involved in the city.
We couldn’t get pictures of the place, but here is the mapquest location. We may swing by later on during the week to take some snapshots for planning purposes.
Best,
James
Hi All,
I am writing you from the coffee shop inside that famous Portland institution – Powell’s Bookstore.
Among the books we got today was a copy of Jane Bryant Quinn‘s latest book Smart and Simple Financial Strategies for Busy People. I haven’t made it very far, but am impressed with her recent work and did want to share with you some of the principles that Quinn outlines for achieving financial successes.
1) Keep things simple. According to Quinn, most of what Wall Street is selling is overcomplicated and overpriced. In this case, I fully agree with her. Its not necessary to pay a professional up to 6% in management fees to have them buy reverse convertible bonds, dabble in commodity futures or buy puts and calls on stocks. Instead, Jane Quinn says you should consider simple, low cost, high quality products. In our view, index funds are great for this, as is buying shares of high quality companies directly.
2) Make It Automatic. Quinn is really a fan of this approach. She basically argues that you should set up a system to routinely take a portion of your paycheck that’s allocated to saving and investing. If you start small, – say with 5% – then you hardly ever miss the money. Theoretically, you can slowly ratchet your savings deduction up to 11% or 12% of your income – or however much you think is needed. For our part, we draw heavily on automatic payroll deductions to do what Quinn recommends. This system works because you never see the money so you’re not tempted to spend it.
Smart and Simple Financial Strategies is published by Simon and Schuster at powells.com. Check out a copy if you’re interested a comprehensive yet witty discussion of moving your personal finances ahead.
Best,
James
*Smart and Simple Financial Strategies for Busy People*, by Jane Bryant Quinn
Hi All,
We have spent the last few days cruising through Oregon and haven’t been able to let you know what’s going on. So, here is an update on what we’ve been up to.
Right now we are in Portland helping Miel’s sister and brother-in-law move. They ended up selling their small one and a half bedroom in two and half weeks – great for this market. They moved into a larger – and more expensive three bedroom in a different part of town. Their mortgage payments have increased, but since they’re expecting their second child, they felt they needed the extra space. They also anticipate living there for the next twenty years.
The other big news – at least for us non driving DINKs – is that gas prices are very, very high. We borrowed my mom’s camper – while the mileage isn’t bad, it does have a massive tank. At $4.05 a gallon, filling the darn thing costs a cool $80 to fill. Doing any kind of serious driving can quickly empty your pocket book. In this case, we’re a bit behind the curve because everybody knows that gas prices are outrageous. We just don’t feel it on a regular basis, because we’re not motorized.
Oh – we almost forgot, we’re also looking into a couple of investment opportunities when we’re in Portland. The first is that we’re considering picking up a piece of real estate here sometime early next year. At this point we don’t have the parameters well defined or a clear vision of how the project will make money, but we know that we want to be in Portland for the long term, so this at least provides some focus.
The second opportunity we’re considering is buying shares in Umpqua Bank, a regional savings and loan that has expanded substantially over the last ten years. Since the entire banking sector has been beaten down, the stock is currently yielding a 6.2% dividend, and if the fundamentals are strong, could have an upside of 200 percent. The ticker symbol is UMPQ, and the stock is currently selling for $12.34 per share.
Best,
James and Miel
Hi All,
We are currently in rural southern Oregon visiting family, but I wanted to make you aware of an interesting article for Kiplinger’s Personal Finance. If you’re an income investor or are looking to invest to make some extra money on the side, you might consider checking out Jeffrey Kosnett’s recent piece on investments that pay monthly dividends.
Its got a good discussion of some sample portfolios graded by risk tolerance – but more importantly it names specific stocks and mutual funds so you can do your own research.
Click here for the article.
Best,
James
On vacation. Enjoying the beautiful scenes of Southern Oregon. This is a pic of the swimming hole, on the idyllic South Umpqua River, that Miel spent her summer days at while growing up.
Best,
Miel & James
Hello All,
This posting comes to you from rural Oregon where we are spending a couple of days visiting our relatives.
The big news here is that, after a great deal of hassle and going back and forth with the bureaucracy at the University, Miel’s student loans for last semester finally came through. Since Miel had already paid the tuition bill, this meant that we had an additional $8,500 in “found” money to work with. At our meeting yesterday, we decided to allocate $5,000 of this as an emergency fund, and put the rest towards buying some real estate in Portland.
There are some trade offs to this arrangement. Mostly its a question of borrowing costs vs. fulfillment of short term goals. Specifically, because the tuition bill was paid – Miel saved up – we did not have to allocate the student loan funds to paying the U of Maryland bill. However, we chose to borrow the funds anyways. This means that we’ve got an “extra” $8,500, but we have to pay to use it. That is the downside.
On the upside, we have more flexibility by having the money. Miel’s job situation in Afghanistan is not as stable as she’d like, so having a reserve fund will be important in the event that her employment there runs into problems. Also, the additional cash gives us more choices in terms of our investing and savings options. This is important because we’d like to invest in a vacant lot for a future home in Portland. Finally, although the student loans oblige us to pay interest, that interest is tax deductible. This means the cost of borrowing the $8,500 is somewhat blunted.
Yes, we generally try to avoid borrowing, but in the end we’ve opted for having the additional flexibility of having our goals met.
James & Miel
So you are tired of the rising food prices and worried about your environmental foot print? Check out a few handy tips on how to save money and the planet too.
According to a Newsweek article I was reading on the plane yesterday, spending on gas will soon surpass that of your monthly food bill. The price at the pump is only adjustable in terms of the amount of driving you do. However, food is something that you’ll always need to survive.
Community Sponsored Agriculture is a great alternative to rising food costs. Basically the deal is that you pay local farmers to send over their seasonal harvests. This means that you pay for a season, and get whatever is growing fresh at the time. This means that you are saving money and also getting the freshest food around.
Here in DC, the price for a Winter CSA is $600 for 26 weeks (Dec-May):
This Community Sponsored Agriculture includes veggies, fruit, yogurt, bread, eggs and lots of other goodies.
Summer CSA $570 for at least 20 weeks:
You can get a reduced price for doing some work at the farm, which is always fun anyhow. You can also find a friend and split the price in half.
Hosting a CSA pick up location is also an option. Others pick up their groceries from you – and you get the left overs. Oh, and it’s not uncommon for the person who hosts the pick-up site to get a major discount.
Grassfed on the Hill – a local resource in DC for pastured, hormone-free, organic meat, dairy, eggs, cheese, sausage, chicken and other yummy treats. You have to join the Yahoo group to participate, but you can order as much as you like. Some people order weekly, others order just once. You pay per week. Look around and you might find something like this in your
area.
Capitol Hill United Co-op – this is a monthly DC co-op that buys directly from the same wholesaling companies that sell to health food stores. You can get your items for a significant discount off health food store prices. Look in your area to find out about local co-ops.
If you are interested in going further, you can think ahead for next season to consider getting a lot at your local community garden. A typical garden plot cost $50/year and is completely organic.
Other resources include: Washington Green Grocer – Organic and conventional grocery delivery. James & I tried this and really liked it, but couldn’t keep up after we both started grad school and stopped making as many meals together. :-( The prices range from $27.50 for a small mixed selection to $39.50 for a large organic box.
Spud also delivers in Portland, Oregon. Find a food co-op near you Find a Community Sponsored Agriculture near you. Another website to find a local CSA outside of the DC metro area Check out the World’s Largest Eco-Friendly Directory.
Enjoy your tasty finds!
Miel & James
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