My Home Purchase Strategy / Rental Hack (December 2010)

It was the best house I could afford in my area for $430,000 for the square footage, proximity to work, condition, school district and rent potential being close to Cal State Fullerton. Rent potential was a large factor in my purchasing decision.

Due to the unique home layout, I was able to rent out a portion of my house for upwards of $1,236 / month offsetting my monthly payment with impound (property taxes & insurance) of $2,145.80 / month. So that was $909.80 / month for the house out-of-pocket. Principal is about $674.77 / month (which goes back toward equity), so I was really paying $235.03 / month for 3 bedroom, 2 bath, 1,500 sq ft (including garage which is my man cave). This doesn’t include home appreciation.

January 2015, my home was appraised for $616,000 which enabled me to get a home equity line of credit available to be drawn upon at $57,000 which will most likely remain untouched for now until I find a worthy investment.

The previous apartment around 2007 – 2009 was a 2 bedroom, 1 bath apartment, for $1,050/month. With my Veteran status, I managed to do 10% down, and refinanced a couple times down to 3.25% over 30 years in November 2012. Down payment sources came from savings, Roth IRA contributions, and saving up for about a year prior to the house purchase living in a hotel suite paying no rent

With our 4th kid on the way, and with the little ones getting bigger, we decided to expand to the full house, which basically doubles our living space. It almost feels like moving into a new house. Subtracting out Principal, the cost is now $1,471.03 / month for 4 bedroom, 3 bath, 2,500 sq ft (including garage). If you consider a 3% appreciation of $430,000, that comes to $12,900 / year, or $1,075 / month. If I subtract out the appreciation, then at the end of day, I’m paying $396.03 / month at the end of life. Though, if you consider appreciation compounds, I imagine it’s less than that.

Due to California, Proposition 13, my property taxes cannot increase more than 2% per year, which incentives me to stay put and not sell. My intention is to rent out the property if I move out in order to maintain the highest potential cash flow, and cash out the equity instead as necessary as alternate investment options become available.

USAA Bank Threatening to Close Account Because of Suspected Business Transactions

UPDATE: Part 2 USAA – Your Checking Account May Be Closed for Business Transaction Use (Part 2)

 

USAA has a “back office” that you will never be able to contact directly that has the power to close your Checking account with essentially no contest. The “back office” can determine your account is being used for “business” purposes. Even if the reasoning behind their decision is flawed there’s nothing you can do about it.

I just spent an hour talking to different individuals in regards to this letter I received in the mail:

My main question: what specific transactions were considered “business” transactions.

The first tier was no help, and just frustrating. He was just giving general answers, without specifics when I was asking specific questions.

The second Tier, “Executive Resolutions,” Chip, basically said he couldn’t do much either. He read off the notes on the account. He mentioned that the payroll checks I had deposited into my account, from my same employer of five years, were “suspicious” also because I transfer the funds out right away. I transfer them out right away into a higher interest Savings Account, which I’ve been doing essentially since becoming a member 9 years ago.

The Manager, Erik(sp?), which I never talked to, said that some “notes” will get passed onto the Back Office Department that makes the final decision.

I normally love USAA (except for Life Insurance and Home Mortgage), but this breach of trust without recourse is concerning. There should exist some way to contest the decisions of this “back office.” As a member of 9 years, I’d expect at least an inquiry to me personally about their perceived “business” activity, rather than their approach of “guilty until proven innocent.”

Reference: Your Checking Account May Be Closed for Business Transaction Use

Thank you for trusting USAA Federal Savings Bank with your banking needs. We’re writing about an urgent matter concerning your checking account ending in 2644. This account is a personal account and is not set up for business use. We recently evaluated activity on your account and determined that it is being used to process business transactions. Indicators for business transactions can include:

• Deposits made in the name of a business.
• Deposits for a merchant account (an account that allows a business to accept credit/debit card payments from customers).
• Memos on deposits/checks that indicate transactions arc related to business transactions.

Because of this usage, we may be forced to close your account. Please stop all business transactions within 30 days, or we regret that we’ll be forced to close your account.

If you believe this letter has been sent in error, or if you have questions, please call us at 1-800-531-USAA (8722). “We value your membership and urge you to take immediate action.

How to Sell Merchandise on Craigslist (My Process)

Sorry, I had to edit out the last part of the video because I accidentally displayed some data I didn’t want to reveal over the interwebs.

Here are some tips:

– PRICE OUT YOUR ITEM
Look on Amazon.com, Ebay.com (Sold listings), and Craigslist, to see what used items are selling for. Remember to consider shipping and handling to figure out the “fair market value” of what it is you’re selling.

– POST GOOD PICTURES
Sometimes, I’ll even grab the pictures from Amazon as my primary image, to make the posting look more enticing

– DESCRIPTION IN YOUR POST
Make sure to have a great description of what you’re selling to make it easier for people to find it. I have a standard template for my contact information and for people to see my other posts. I also often copy and paste from Amazon product descriptions

– CHOOSING A TITLE
I usually put the condition, right in the title.

– ALWAYS HAVE THEM OFFER THE FIRST PRICE
If someone wants to purchase from you, make them offer you the first price. You already offered the starting price with the listing, so now it’s the Buyer’s turn.

– BE PATIENT
If you did the research on pricing your item, you can be confident that you have a fair market value. All it takes is one buyer! Also, certain seasons affect purchasing habits of

– RENEW YOUR POSTING
Renew your posting about twice a week to refresh your listing, and also check your pricing if you’re not getting a lot of hits. It’s possible you may need to adjust your price.

Free Health Savings Account Through Alliant Credit Union

For a $10 Donation to “Foster Care 2 Success,” you can sign up for an essentially free Health Savings Account (HSA) through Alliant Credit Union with no minimums. All of my sign up was done online without going into a branch office.

http://www.fc2success.org/how-you-can-help/join-fc2s-alliant-partnership/
http://www.alliantcreditunion.org/depositsinvestments/healthsavings/

Checks are free and I believe the debit card is free.

To possibly avoid fees from your old HSA provider, you may want to do a simple rollover and zero out the balance in your old account. They may not be able to legally charge you for an account that is at $0.00. I still have to test this.

You can ignore my link looking at the Vanguard option as they have a $45.00 Annual Administration Fee which basically kills the deal for most people.

=== === === ===

Fees

Effective – 03/01/2011

The following fees and transaction limitations amend your Account Agreement and Disclosures (PDF). These fees and limitations MAY be assessed against your account if applicable. Fee Schedule (PDF)

Complimentary Services

ATM Transactions at Alliant-owned ATMs FREE
ATM Transactions at Non-Alliant Owned ATMs1 FREE
Consumer Loan Application FREE
Consumer Loan Modification FREE
Convenience Card (except lost card) FREE
eStatements (electronic statements) FREE
Financial Counseling and Budgeting Services FREE
1st Box of Checks when opening a new Checking Account FREE
Home Equity Checks FREE
Home Equity Loan Processing Fee2 (loan amounts up to $250,000) FREE
HSA Checks FREE
HSA Custodian Check Issuance Fee FREE
HSA Excess Contribution Reimbursement FREE
HSA Monthly Maintenance Fee FREE
HSA Set-up Fee FREE
HSA Transaction Fee FREE
Online Banking with Bill Pay
(non sufficient funds (NSF) fees apply) FREE
Online Check Copies FREE
Self Service Telephone (SST) FREE
Signature Guarantee Stamp FREE
Teller Transactions FREE
Third Party Share Drafts (3 per day)
$2 for each withdrawal thereafter
FREE
VISA® Credit Card (Platinum and Platinum Rewards) FREE
VISA® Credit Card Annual Fee (Platinum and Platinum Rewards) FREE
VISA® Credit Card Balance Transfer (Platinum and Platinum Rewards) FREE
VISA® Debit Card (except lost card) FREE
VISA® HSA Debit Card FREE

Account Basics

Account Closed within 90 Days of Opening $10
Account Maintenance Upon Member Request (1 hr min)(per hour)
Account Balancing Assistance
Account Research
Subpoenas
$25
ACH (electronic transfer) initiated via Alliant Online Banking FREE
ACH (electronic transfer) initiated via Telephone (per occurrence) $10
Bad Address Fee $5
Copy of Document (per document)
Account Activity Printout
Check Copy3
Interim Statement
Membership Statement3
Special Statement Cutoff
Subpoena
Loan Document
Deposit Check
Paid Credit Union Check
Wire Transfer Confirmation Copy
$5
Courtesy Pay Fee (per occurrence)
Written Check
Preauthorized Withdrawals from Checking
Debit Card Transactions
$25
Deposit of Check Drawn on a Non-U.S. Bank $35
Dormant Account Fee $10
Inactivity Fee
One year in which no withdrawals or deposits, other than credited dividends were made to the account
$10
Miscellaneous Fees (per item)
Levies
Garnishments
Collection Item
$29
Manually Paid Checks and ACH Items $5
Nonsufficient Fund Item (each)
Written Check
Electronic Item
$25
Overdraft Transfer (max per day)
Savings
Supplemental Savings
$3
Line of Credit Advance4 (per occurrence) (effective 4/1/2011) $3
Replace Lost Card
VISA® Debit Card
Convenience Card
$10
Return Deposit Item $15
Sight Draft Deposit Fee (per item) $25
Stop Payments (checks) – submitted via Alliant Online Banking or SST FREE
Stop Payments (checks and ACH) – submitted in writing or verbally $25

QuickBooks Pro 2013 OLSU-1022 Error Message Solution

PROBLEM DESCRIPTION

I did a fresh install of QuickBooks Pro 2013 on a new machine and noticed I was getting an error message when I was trying to “Set Up Online Services”.

An Error occurred while updating the branding files!

Please restart the Online Banking Setup Wizard to initiate the update process again.

Then I’ll hit the “OK” button only to proceed to this error message:

An unexpected error occured. A critical file that contains the financial institution data is not in the correct format or missing.

Error message number: [OLSU-1022]

Press OK to have QuickBooks download this file for you. After the download, restart the Online Banking Setup Wizard.

SOLUTION

The QuickBooks given solution didn’t work for me. Then I remembered I had perfectly working files on other computers, so I just copied the files from the working computers to mine.

STEP 1
Download the four files I’ve shared here:

  • FIBlueprint.xml
  • PopularFIs.ini
  • index.ini
  • fidir.txt

STEP 2
Go to the following folder on your computer and move your downloaded files to that directory:

C:\ProgramData\Intuit\QuickBooks 2013\Components\OLB\branding\filist

STEP 3
Right click the four selected files in the designated folder in STEP 2 and select “Properties”. Then make sure the “Read-Only” option is checked, and you should be good to go!

Many of my banking institutions don’t have QuickBooks files (.QBO) to use Quick Connect with and only offer the Quicken files (.QFX). I’ll cover how to convert QFX files to QBO files in a different post.

High Yield Bank, Savings, and MMA Accounts Under Your Trust’s Name

Being a Trustee of a Trust, I was tasked with opening up bank accounts to manage the Trust. In order to maximize the returns, I decided on opening up multiple high interest bearing Savings Accounts and Money Market Accounts.

When I open the accounts, I don’t want the accounts to be under my name, but under the name of the Trust that also has an assigned EIN. It was quite difficult to find four banks with high interest that were Internet based.

The four banks that were setup to create my new account under the Trust name with me being documented as the Trustee were the following:

Ally Bank will be my primary since they offer the highest returns and will be my primary pass through account since they provide free ACH transfers between all the bank accounts.

For the most part, all the accounts have no maintenance fee and no minimum, so I can utilize them up to their FDIC $250,000 insured value or leave them empty if I don’t need them.

Here’s are my notes that list the banks that I had called into and was able to confirm that they DON’T open up new accounts under a Trust’s name. I definitely would’ve loved the higher returns in the 0.90% accounts, but alas, they didn’t support creating accounts under a Trust’s name.

Barclays – Doesn’t Accept Trusts @ 0.90% APY
Sallie Mae – Doesn’t Accept Trusts @ 0.90% APY
GE Capital Bank – Doesn’t Accept Trusts
American Express – Doesn’t Accept Trusts
FNBO Direct – No Trusts

Incredible Bank .86% – No Trusts
877.261.4750

CIT Bank .85% – No Trusts
855.462.2652

Colorado Federal Savings Bank .85%
877-484-2372,

Mutual of Omaha Bank .85%
866.264.1214
909.919.7220, Theresa

Able Banking .80%
888 I AM ABLE

TIAA Direct .76%
855.842.2372

Costco vs. Amazon.com vs. Walmart vs. Target Pricing List

LIST VIEW

Usually it’s assumed that Costco is ALWAYS cheapest. I’ve found that Amazon.com’s “Subscribe & Save” option with the 20% off is actually CHEAPER than Costco in some cases.

Just as a reference, the Costco pricing is mainly out of the Fullerton Costco located in Fullerton, California.

Here’s a referral link so you can try Amazon Prime for free for 30 days if you aren’t already on it. Not only do you get free 2 day shipping (which often for me is actually one day since one of their distribution centers are so close!), but you also get access to a ton of REALLY good TV shows and movies.

Bank of America Changing Fee Structure for Business Economy Checking to Business Fundamentals Effective November 1, 2013

 

I just got this notice in the mail.  It used to be you could simply charge $0.01 onto your debit card to get the fee waived, but alas, that’s over beginning November 1.

 

As of November 1, your Business Economy Checking account will
become a Business Fundamentals® account giving you new ways
to avoid the monthly fee and a savings account with no additional
monthly fee.
We’re making these changes to help you get more out of your small business banking relationship
with us, and give you additional opportunities to avoid the monthly fee.
What’s not changing
Though the name of your account(s) is changing, basic account features and how you use your
account will not change:
• You’ll keep the same account number, debit card and Personal Identification Number (PIN)
• The monthly fee will not change
• You can continue to use your same checks
• If you have Overdraft Protection, your settings will stay the same
• You’ll also continue to have access to Small Business Online Banking, Bill Pay and Mobile and
Text Banking, with no change to your Online ID and Passcode
What’s changing
Monthly fee: You now have additional ways to avoid the $16 monthly fee. Starting November 1,
you will not be charged a monthly fee when you meet one or more of the following:
• Spend $250 or more in net new purchases using any one of your linked Bank of America
business debit, charge, or credit cards; purchases must post to your account to qualify. A single
point-of-sale debit card transaction will no longer allow you to avoid the monthly fee.
Or
• Maintain one of the following balances:
– A$3,000 minimum daily balance in your primary checking account, Or
– A$5,000 average monthly balance in your primary checking account, Or
– A$15,000 combined average monthly balance in your eligible linked business deposit
accounts
There will no longer be a combined minimum daily balance qualifier.

 

 

Are Solar Panels Worth the Cost?

ABSOLUTELY NOT FROM A PURELY MONETARY PERSPECTIVE.

This is mainly because of the fact that the initial investment you placed in the solar panel installation could had been invested in the stock market.  This is what’s called “opportunity cost.”

You can’t simply look at the break even point of solar panels, but you have to look at the break even point versus investing in the stock market.  Unfortunately, they never meet.

The cost benefit analysis clearly shows that the gap between payback period is HUGE, even if you want to consider in minor other variables.

For example, an initial investment for $20,000.00 in solar panel with a 9 year break even point and 7% average return (post-tax) would result in cash value displayed below.  At the 9 year break even point for the solar panels, your stock investment would be valued at $36,769.18.  The spread between solar panels and your stock values only grows exponentially larger from there.

You can click this link to see the spreadsheet I used to make the calculations here:

https://docs.google.com/spreadsheet/ccc?key=0Ar8ivt6iydY7dFYyWDM0QlNRb1d4Z2c1eHoyQXAwV2c#gid=1

Now if you want to argue all the extra “green” benefits items, I guess that’s your prerogative.  From a strictly monetary “return on your investment” perspective, the data greatly favors alternative investment options.