BtW: Week #3

This week was cold.  Really cold.  Two of my units had some frozen pipes.  One thawed with no problems, in the other, the pipe burst.

In my other pursuits, I didn’t technically bike to work this week (too cold), but was able to car pool with one of my coworkers for three days this week and I rode my bike TO work on Friday.

I didn’t bike to work as much as I wanted, so I won’t count this week toward my 2014 goal of biking to work 66% of the time.  However, I will count this towards my 2014 frugality goals.

BtW Week 3 Stats:
Miles Biked: 9.6
Car Miles Saved: 57.6
Gallons of Gas: 2.74
Dollar value of Gas: $9.55

BtW: Week #2



It was a cold week for riding my bike.  A simple Google search for “Cold Bike Ride” came up with the above image, which is how I felt on two of my rides.  But, luckily I’m not Johnny!

This week I managed to save three car trips by biking.  I biked to and from work on Monday, to work on Tuesday and from work on Friday.  The way I figure my math is as follows: My wife had a pet sitting client very near where I work, so she needs the car each day.  If she were to drive me to and from work each day, plus visit the client, she would have a minimum of two trips per day, up to three trips, depending on our schedule.

On Tuesday, we had one trip (one trip saved) and on Friday, we technically had two trips, but would have had three if I needed to be picked up, so again, one trip saved.

The Friday trip home was better than the Tuesday trip into work, less painful, but still cold.  I decided to wear my steel-toed boots, after having warmed them up.  That helped keep my feet warm for about 1/3 of my ride.  For the 2nd third of my ride, my toes were cold.  The last third of my ride I knew I needed to get home.

About two miles from home, when I was really thinking my toes hurt and worrying about frost bite, I remembered the 101st and 82nd Airborne in the Ardennes.  When the Germans asked that the allied forces surrender, Lt. General Kinnard replied “Nuts!”  That was my mantra as I finished my ride home.

BtW Week 2 Stats:
Miles Biked: 38.4
Car Miles Saved: 57.6
Gallons of Gas: 2.74
Dollar value of Gas: $9.62

“Unique” financing

I figured that if I’ve only got 12 months in one year and I’ve got MORE than 12 goals to accomplish, I might as well get started knocking my goals out.


I’ve been biking to work, although this week has been rough.  I biked to and from work on Monday, biked TO work on Tuesday, and plan to bike HOME from work on Friday, but it’s been bitter cold.  My ride in on Tuesday morning was literally painful.  The above photo was taken after ice began to fall out of my beard.  That was the biggest smile I could muster.  Paraphrasing from “Jaws”…”I think I need a bigger beard!”

So, I’ve been biking to work.  Not at my 66% threshold yet, but I’m working on it.  Once it hits ~30degF, I’ll be able to ride every day.

Not to sit back for too long, I’ve been working on at least one of my other goals: use ‘unique’ financing to fund a purchase.  I have two instances of using unique financing, but will only discuss one of the potential deals now.

For the past two years, there has been a duplex for sale in Philipsburg, a good C-C+ town.  I had toured this duplex over two years ago when I was considering becoming a landlord.  I didn’t understand the benefits of purchasing a fully rented building.  The cash flow benefits of my UFUOs DOES explain why I enjoy rehabilitating housing.

I’m always searching the MLS for properties that meet my ideal rental criteria and I stumbled across this duplex again.  The owner had dropped the price about $2,000 since I last looked at it.  I learned that the owner had paid off the mortgage since I had last toured the duplex.  Because there was no lien on the property, there was no ‘Due on Sale’ clause to be fulfilled, so this gave me the opportunity to make an unconventional offer.

In addition to no lien on the building, the advertised rents were significantly under market rent for the units.  A 2-bedroom unit in Philipsburg rents for at least $500/month, meaning this duplex should generate $12,000 gross rent for the year.  The units are currently rented for $475 and $435, or about 91% of expected rent for the area, meaning there is upside potential for the rent.

Lastly, the residents are both medium-term residents, meaning they have been living in the building for more than one year, which increases the chances they will remain in the building so long as I am providing good living conditions for them.

Banks are currently offering me 80% financing, meaning I need to have 20% cash to put down (plus closing costs).  I don’t, and won’t have 20% to put down on this duplex for approximately 6 months.  Rather than let that bother me, I decided to make an offer in which the owner carries the debt until I have my 20% and I can get a standard loan from the bank.

I crafted my offer as follows: I would put 10% down with the owner to carry the balance amortized over 30 years, due in 1 year.  This means that the loan is a ‘standard’ mortgage, paid back over 30 years (rather than the 20 years I get from local banks), however the loan is due in 1 year, so I will need to either pay off the loan in one year (not going to happen) or refinance the property within one year.

In order to make my offer stand out and show that I know what I’m doing, I included my entire financial snap shot including: IRA balances, Individual stock balances, net worth including HBS and personal property as well as my personal monthly budget.  I also included a personal resume.  Lastly, I wrote a cover letter similar to the one I sent to the owner of the 4-plex in Millheim (see: About that Deal…).

I honestly think Realtors must get tired of the standard 30-year financing deals, because the first thing I heard about my offer was from the seller’s agent, and he said that my offer “was the most impressive offer package he has seen in his 30 years as an agent.”  My Realtor told me that I “certainly keep it interesting” for her.  She indicated that she has a bunch to learn from my work.  Sometimes I think “not the conventional path” is the story of my life, but that’s OK by me!

For this specific deal, I will need to come up with $6,090 plus closing costs in order to purchase this duplex.  Pulling this cash together will be tight, but should be doable.  Rather than ask for the standard 45 days, I asked for 60 days, which gives me two month’s of rent  and four pay checks to save and time to move cash out of stock accounts if needed.

The deal isn’t signed by both parties yet, but has been agreed to (verbally) by both parties.  Hopefully by the end of next week I will be able to report on my executed contract on the duplex.

Stay tuned…


2014 Goals – Starting Early

Wood Stove Room 1


When you have a lot of goals, you might as well start as early as possible!  That helps explain biking to work in freezing weather (this week will be even colder…).  I’ve got two ‘irons in the fire’ for rental properties, using very little of my own money (because I don’t have much to invest right now).

We decided to start working in the wood stove room this weekend.  We’re putting up the stone surround for the wood stove.  No more cement board in our living space!  I spent about two hours today with my brother-in-law installing three courses of the tile.  We’ll give the thinset mortar one day to cure before we start on the next courses.  Hopefully by the end of the weekend the stone work will be completed.  Trim will have to happen at some point in the future.


Trusty Steed


Coldest bike ride today, but I’m feeling more confident riding on some busy roads to get to work.  It was sub-32degF this morning when I left home, but the roads were dry.  Tried a new route in to work and it only requires me to be on one busy road (45mph) for approximately one quarter mile.  The only downside is that the ride home heads up a big hill.

Savings: I’m going to start reporting only cumulative savings at the end of each week, only because the daily savings will vary very slightly: I bike the same path to work and I used to drive the same route to work.

Cumulative savings:
Car Miles Saved: 57.6
Miles Biked: 54.3
Gallons of Gas: 2.75
Dollar value of Gas: $9.63 (Pays for the weekend visit to the local coffee shop)


Well, I survived a second day biking to work.  I picked up two lights for my bike, a front and rear light.  I’m not quite the UFO I want to look like, but I’m one step closer.  I next want to get a light for my helmet and a second light for the rear of the bike.

It was cooler today.  Frost was starting to form as I rode home.  I scared one rabbit that was being stalked by a cat.  My running myst help with the biking, because while I am winded while riding, my legs aren’t aching (too much), and I wasn’t at all sore today.

I realized that my math in BtW1 was wrong.  I calculated the savings as if I had simply driven the same path I biked.  I should have calculated the savings from driving the route I would have had to drive to get to work.  Savings actually increased slightly from the numbers on BtW1.

19.2 Car Miles
0.91 Gallons of Gas

2014 Personal Goals Breakdown

Yesterday I broke down the 2014 goals for HBS.  Today I’m going to break down my personal goals for 2014.



(This was right before I started a climb with some friends in New Hampshire…see mom, I do wear my helmet!)

1) Finish wood stove room – Well, this item has been hanging around my ‘to do’ list for a LONG time.  We were set to begin work tearing apart my 2nd floor, but right before I was going to put a hammer through the wall, my wife asked if I would consider finishing some of the ‘open’ projects on my list.  I agreed.  My goal is to complete this project myself (while still having it look nice).  I admit, I will miss the foam stalactites hanging from my ceiling.

2) Get master bedroom finished to the drywall – I want to get the 2nd floor mostly finished this year.  Combined with the wood stove room, the completion of the 2nd floor would give me a sense of accomplishment with my house.

3) Enter, run and finish a marathon – I’ve had this goal for a while, but something has always come up which either prevented me from running or simply didn’t allow me from running (which is pretty much the same as preventing me from running…).  Well, this year is different.  I actually wanted to compete in an ultra-marathon (on trails), but decided it would be a better next step to try 26.2 miles rather than 30+ miles.

4) Bike to work 160 days this year – I admit, I fell off the bike-to-work band wagon five or six (or more) years ago.  It’s a long story, but basically, one car’s engine exploded, so we purchased a second car.  My parents were more than generous to offer to fix the bad-engine-car, so we fixed that car and had two cars, so why bike to work anymore?  Now we’re back down to one car.  Today, I just put a lot of money into the car for new spark plugs, wheel bearings and break pads.  To top it all off, the car was out of gas, so I had to put $50 into her.  That’s all to get me back and forth from work.  Following in Mr. Money Mustache’s footsteps, I’ve decided to start biking to work.  I will need to invest in some good lights for the bike, but I estimate I can save between $750 and $1,000 by biking to work (gas money only; wear and tear would be extra savings).

5) Increase passive cash flow to $500/month, excluding real estate investment – This is basically my dividend income.  I currently earn almost $80/year in dividend income.  Every month, I invest approximately $85 in dividend paying stocks.  With the new year, I will be increasing this monthly investment by almost $200, to a total of $260 per month.  I have found that if I start this, there is pain for a few months until I adjust to the ‘lost’ income, but after a while, I look at my portfolio and think “Holy Cow, look at that!  I didn’t even feel the loss!”  Again, this is forward looking, meaning that the $500 won’t show up on my tax returns for 2014, but rather for 2015.

6) Invest a minimum of $100/month into my daughter’s stock account – Around the end of the year, fired out an email that offered to give $50 to any custodial accounts that were funded or made a trade by Jan 15th.  I’ve wanted to open a custodial account for my daughter for a while, so this $50 was just the push I needed.  My wife and I had been ‘setting aside’ $100/month in our savings account, only we would raid the account when we needed the cash.  Well, I decided the money is better invested for my daughter, so I closed the savings account (used the remaining $42.66 to buy a year’s supply of TP) and now I direct our $100/month towards my daughter’s account.  Any extra money she gets (at least for now) goes into that account to be invested.

7) Repay my daughter what we owe her – We had a 40+ year old roof on my house when I was finishing my daughter’s room.  When I was working on the room, there were a few days I went up stairs and found liquid on the floor.  I just thought that one of our animals had had an accident, so I cleaned up the ‘mess’.  That was a great way to deal with it…until one day, when it was raining and I was working in the room and….DRIP…on the end of my nose (yes, think Tom Hanks in “The Money Pit”).  I thought what the HECK was that?  That’s when I saw the leak.  My 40+ year old roof finally decided to give up the ghost.  I had a friend come over and tear the entire roof off and put a new roof on.  A totally unexpected expense.  We had to raid my daughter’s college savings for the roof (but it kept her room dry!).  So, we figured a 16% return on her money wasn’t too bad, so we’ll be paying that back this year.

8) Invest all unplanned or ‘windfall’ income this year – Last year, because of the rental properties, I got a sizable tax return.  I should get a reasonably good return this year as well (I’ve since adjusted my W-2 so that I’m not giving the government any of my money throughout the year.  Let them take my depreciation at the end of the year!).  At work, we are supposed to get a bonus this year.  Rather than pay for day-to-day expenses, all of that money will be invested, either in dividend paying stocks (to meet Goal #5 or #6) or in HBS.

HBS 2014 Goals Break Down

Hyner 2012 (Start)

Yes, this was the start of the 2012 Hyner View Trail Challenge (that’s why I’m smiling…).  I figured a quick break down of the 2014 Goals for HBS.

1) Increase cash flow by $1,000/month (forward looking cash flow) – With the five units I currently own (Two duplexes and one SFH), I ‘profit’ approximately $950 per month (I am not paying for property management).  All of the ‘profit’ is currently being reinvested in HBS.  By the end of 2014, I want to increase the profit to $2,000 per month.  Ideally, I would work on this goal in bits and pieces, purchasing one property per quarter that cash flows $3,000 annually.  However, I would still meet the goal if I were to purchase one property on December 31, 2014 that cash flows $12,000/year.  In addition, I could purchase properties that are rented at under-market rent, if I think I could raise the rents to the $3,000/quarter threshold.

2) Purchase a minimum of 3 additional rental properties – I plan to add a minimum of three properties to my current portfolio.  I think I will actually have to add more than three properties if I want to meet Goal #1 above.  I anticipate that I will more than double the number of units HBS owns this year.

3) Use unique financing on at least one deal this year – This comes from the REI class I’m taking right now: Cash Flow Freedom University by Ben Leybovich.  Ben advocates finding properties that offer unique financing opportunities.  One property I am considering purchasing is a duplex, owned by the same owner since the mid-90’s.  The owner paid off the mortgage in 2013.  Because there is no mortgage, the owner could hypothetically offer 100% financing for the deal.

4) Leverage an additional $200,000 – This is simply how much additional ‘debt’ I want to carry by the end of this year.  I am earning approximately 11% on my leveraged cash.  If I continue this earning streak, I would earn approximately $1,830/month if I were to leverage a total of $200,000.  This would crush Goal #1.

5) Locate a headquarters for HBS – Honestly, my garage is full of tools and materials I need for HBS.  I would like to locate the materials and tools in a larger space so I could have some space to fabricate custom pieces if needed (also, I have a few friends who could use some large shop space).  In addition, my wife has requested that I convert my HBS storage area to a craft room.  I would like to have a dedicated craft/painting/sewing/candle making area.  If I can locate a headquarters (don’t need to purchase in 2014), that would be an excellent step towards our craft room.

Bike to Work: Day 1

I plan to keep a running tally on my Bike to Work (BtW) days as well as general updates on the ride.


Well, today was BtW-1.  I dropped the car off at the shop to get new spark plugs and front driver side wheel bearings.  Turns out the car also needed break pads, not an inexpensive day.

The bearings have always been a problem.  We tried getting them fixed in the past.  Based on how everything sounds now, I’m not convinced they were ever fixed before.  The car now moves so quietly that I almost think there is something wrong, but actually everything is working perfectly.

So, I had a few choices: 1) I could walk or run home from the garage.  The garage is about 3 miles from my house, so not a huge deal, but I should really be at work.  2) I could have my wife and daughter drop me off at work, then sit at the garage for 8 hours (or walk home from the garage), or 3) bike to work.

In late 2013, I set my mind on biking to work for ALL of 2014, but the weather at the beginning of this month nixed those plans.  I just didn’t have the cojones to bike in -10degF weather.  Today simply forced the issue.

I broke out my dad’s 1974-era Raleigh road bike, put on warm clothing, hopped on and started peddling.  Amazingly enough the bike carried me the whole way to work, all 7.5 miles from the car shop to Envinity’s Shop.  It took me 40 minutes to make the trip.  It’s a 15 to 20 minute drive, so 40 minutes by bike isn’t too bad.

When I was younger, I trusted my night vision and didn’t use any lights.  I can remember plenty of nights, biking home from parties down town.  I was lit, but the bike wasn’t.  I don’t know if my eyes are getting older, if I’m getting more sensible or what, but at dusk, I realized why I need to have my bike LIT up for safety – people in cars simply don’t see people on bikes.  Today, I only had my pack and the reflective strip in the picture above.  Anyway, to make a viable go at BtW, I will need to make my bike look like a UFO.  I’m going to try to stop in to one of the local bike shops on Tuesday to get some lights for the bike.

Total Savings in 2014:
16.3 Miles
0.76 gallons of gas
$2.66 (gas at $3.499/gallon)

Goals, Updates and Changes for 2014



Just as everything in life is a work in progress, so too is this blog.  Having read through many of my previous posts, I realize most of the posts are more academic (aka: dry).  In 2013, I tried to write within the self imposed bounds of “Real Estate Investment”.  Life is more colorful than simple real estate investment, so in 2014 this blog shall morph into a more colorful tale of my (and my family’s) journey to financial independence (FI).  I also have more to say than just real estate investment, just ask my brothers (and probably my parents).

To kick things off, I’ve set my goals for 2014.

2014 Goals:
HBS Real Estate-
1) Add an additional $1,000/month in cash flow (forward looking cash flow)
2) Purchase a minimum of 3 additional rental properties
3) Use unique financing on at least one property (eg. Owner financing, 0% down, etc)
4) Leverage at least an additional $200,000
5) Identify a headquarters for HBS to move the business out of my garage.

Personal Goals:
1) Finish the wood stove room (the picture was taken before my daughter was born…she’s well past 1 year old now)
2) Get master bedroom finished to drywall stage (with new floors)
3) Enter, run and finish a marathron
4) Bike to work at least 160 days this year (that’s 66% of the year)
5) Increase passive cash flow (excluding Real Estate Investment) to $500/year (forward looking cash flow)
6) Invest a minimum of $100/month into my daughter’s stock fund
7) Repay my daughter what we owe her (used to pay for the roof that goes over her bedroom)
8) Invest all unplanned or ‘windfall’ income (eg. Bonuses at work, tax refund, etc.)

Just as I had no idea how to rewire an entire house, I have no idea how I will accomplish some of these goals, but I’ll figure it out.