How to Dismantle a Radiator

Today is brought to you by the words “Cast Iron” as in Cast Iron Radiators are HEAVY.  Yes.  Cast iron radiators are incredibly heavy (that’s why cast iron is used to make a variety of body-building weights).  We’re flipping a house and I was “smart” enough to purchase the house in February, right after the polar vortex descended on central Pennsylvania.  I knew the house was frozen, I just didn’t know how much damage ice can cause to a piping system.

Well, after everything thawed, I learned that six of the eleven radiators in the house had burst and needed to be replaced.  We were able to find replacement radiators, I just needed to remove the broken radiators (my contractor didn’t want to do that…)

I decided I was up to the task of removing the radiators.  Last weekend, my business partner and I hauled out two of the radiators (fully intact).  When I got the radiators weighed at the metal scrapper’s yard, each radiator weighed 350lbs!

They weren’t the big radiators.

I decided I needed a better plan to dismantle the broken radiators so each section was manageable by one person.  My plan was to dismantle each radiator and load it onto the day-job’s truck for removal to the scrap metal yard.

Radiators are rather simple contraptions.  They are a series of columns or tubes held together by tension rods:

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If you look closely, you’ll notice two different types of radiators in the picture above: Column and tubes.  Here are detailed pictures of the tube and column type radiators:

Tube type radiators have more, but smaller ‘tubes’ in the radiators (photo on the left; generally 5 or 6 tubes).  The column type radiators have fewer, but larger ‘tubes’ for the hot water (photo on right; generally 3 or 4 columns).  From a demolition perspective, it doesn’t matter if they’re tube type or column type, they’re heavy!  From a physics perspective, the more surface area of the radiator, the higher the heat transfer.  This higher heat transfer lowers the return water temperature to the boiler, allowing your boiler to fire for a longer period of time, increasing the energy efficiency of the boiler.

Sorry for the science lesson, we’re here to discuss dismantling radiators.

You’ll need a few tools to dismantle a radiator (associate links):
1) Sawzall – I use the 12-Amp Milwaukee corded version.  It’s not the most heavy duty, but for the price, it will get through just about anything.  If this is your first sawzall, skip the cordless versions for a corded version.  When you’re ready to purchase your fifth sawzall for your mobile demolition unit (aka: Van), you can consider the cordless version.
2) Sledge hammer – I know there are a variety of plastic handle sledges available on the market, but I prefer good ole American Ash.
3) Wrecking Bar – You may ask why it’s a ‘wrecking bar’ rather than a “crow bar” or a “pry bar”.  Well, how often do you see a murder of crows sitting around drinking beer?  If I wanted to demolish a radiator, would I want to only ‘pry’ it apart, or wreck it?  I’d wreck it.

I will stop here for a moment to remind everyone to be safe when they are demolishing radiators.  You should use protective gear including, but not limited to: hearing protection, eye protection, protective clothing, gloves, steel toed boots, a helmet, space suit, etc.  (Do as I say, not as I do) I wore hearing protection and squeezed my eyes shut tight as my sledge hammer connected with the cast iron.

A further note of warning: When I was smashing one of the radiators with the sledge hammer, a ~4oz piece of iron flew off the radiator and ended up embedded in the oak floor.  If we use conservation of momentum (M1iV1i + M2iV2i = M1fV1f + M2fV2f) we could solve for the final velocity of the chunk of radiator: Mass of Sledge*Initial Velocity of sledge + Mass of chunk*Initial Velocity of Chunk = Mass of Sledge*Final Velocity of Sledge + Mass of Chunk*Final Velocity of Chunk ==> 4.535kg(sledge)*1m/s (initial velocity) + 0.1134kg (Chunk)*0m/s = 4.535kg(sledge)*0m/s (Final) + 0.1134kg*X(m/s) ==> 4.535 kg*m/s = 0.1134 kg * X ==> 4.535kg*(m/s)/0.1134kg = X ~~> 40m/s (or 89.5 miles per hour).  That little chunk of metal would do some damage to soft flesh.

The first step: (gear up) take your sawzall and cut each of the tension rods which hold the radiators together.  There will be three to five tie rods holding the radiators together.  This specific radiator had four rods.  I slid the blade of my sawzall between the tubes of this radiator and cut through each of the tension rods (circled in orange).  Depending on the radiator, some of the rods may be under a lot of tension.  The upper most nut/rod part shot out of this radiator, which is why the tension rod is missing in this picture.

TieRods2

 

Step 2: Break each section.  After the tension rods are cut, only paint and rust hold the radiators together.  However, even though it’s only paint and rust, it’s 100 years of paint and rust, so these sections only come apart reluctantly.  For the second step, you want to take your sledge and hit each radiator section a few times, until you see a small crack in the paint between each section:

Hair line fracture

Once you see the small crack in the paint (do you see it? It’s there…) you can move to the next section.  I found it was easiest to use the sledge to ‘soften’ the whole radiator first, then we’ll go after it with the wrecking bar.  After a lot of smashing:

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Depending how brittle the cast iron is, you may mangle the radiators.  This is also how small pieces of the radiators fly off at incredibly high speeds.  After you’ve softened the entire radiator, you can get your wrecking bar.  Now, you have to be smart when you’re working with the radiators: you don’t want them to fall on you while you’re working.  These radiators can easily weigh 500lbs.  If one falls on your leg while you’re smashing them, your leg is toast – plan to walk again in six months.  BE CAREFUL and BE SMART.  Don’t let them tip over.  Don’t push them over.  Don’t be stupid.  If you think “this is a bad idea but…”, IT’S A BAD IDEA, DON’T DO IT.

(Again, do as I say, not as I do)

I learned.  The first radiator I worked on did tip over on.  It didn’t land on my leg, but it was still scary as this 400lb piece of iron fell over.  I actually worried about the integrity of the floor joists after the radiator fell.  After the first radiator, I braced each radiator as I worked on it.

IMG_20140330_130309242

 

You’ll note the 2×4 under the one leg of the radiator.  This 2×4 holds the radiator up at an angle so I can work on half of the radiator with little worry of the whole beast falling over on me.

So, brace your radiators and grab your wrecking bar.  Place the wrecking bar between the first two sections of the radiator and start wiggling the bar.  The radiators are held together with a flange and throat assembly and “only” need to be separated:

Once the radiators are separated, you can haul them to the scrap yard for recycling.  Locally, the scrap is selling for between $0.05 and $0.06/lb.  While this may not seem like much, if a radiator weighs 500lbs, it’s worth $25 as scrap.  I pulled out six radiators plus the boiler (additional 500lbs).  That’s between $150 and $200 for all the scrap metal.

Flip update

Tired on Sunday

Hey everyone.  Sorry I’ve been quite absent this past week, it’s been a LONG week for me.  To start things off, my wife (and daughter) were out of town, assisting my mother-in-law for the week.  Then, my immune system decided to take a vacation.  It got rough enough that I even took a sick day from work (I think I’ve only taken three in 9 years of work).

We were insulating a house at work this week (not a bad week to be sick), but the insulation job was SLOOOOWW.  What should have taken about two days to complete took a little over five days (I say ‘a little over’, because we are going back on Monday).  Rather than be a simple retrofit insulation job where we drill a hole in a wall, insert a 1.25″ tube and fill with insulation, we encountered 1.5″ of stucco over 1.5″ of wood lath.  We had to rent a dry-core drill bit and rent an SD-Max drill.  You may have no clue what I’m talking about, and honestly, neither did I until Monday when we rented the drill and dry-core bit.  The dry-core bit is a drill bit made for going through cement.  The bit is about 18″ long, has about six teeth at the end and a funky spiral pattern on the side.  The bit costs $180 (that’s not a typo).

The drill the bit fits on is a hammer drill.  Picture a mini-jackhammer.  This drill was about 30lbs without the drill bit (another 2lbs or so).  You may say “32lbs??? What, are these construction guys wimps?”  Well, we had to do the drilling while standing on a 16′ extension ladder.  Needless to say, our center of gravity was off to begin with, then to we decided to throw it a further 32lbs out of whack.

No one got hurt, it was just a LONG week at work.

Then I had to manage our house flip.  In an awesome twist of fate, my day job’s insulation job (with the mini-jackhammer) was literally located in the backyard of my house flip.  At lunch, I walked 50′ into the backdoor of my flip to meet with the contractor and answer questions (if any) or simply see what he was up to during the previous day.

On Monday, I saw the following situation:

Yes, a bunch of seemingly random studs, some acrylic shower/tub liners and red/blue PEX pipe.  However, even when I saw this, the contractor kept telling me “April 1, we’ll be finished inside and working on the roof.”  I kept thinking “yeah….right.  You and some special army will finish this work.”

Well, my contractor called in Seal Team 6 to get the work finished.  I’m not sure how he did it, but he did.  These pictures were taken on Sunday:

Somehow the dude pulled out all the stops and got both bathrooms (and the kitchen) to the point of painting by Saturday.

I’m B-L-O-W-N–A-W-A-Y with the effort he put into it.  On Saturday, I again asked him if we were over or under budget.  He conferred with his partner and they both agreed that they are still under budget (not exactly sure how).  We’ll be meeting on Friday to discuss budget and see how over/under we really are.  I’m hoping I’m not swimming naked with the tide going out…

Anyway, last week was long for me…this upcoming week will be long for me.  I’ve got a full week of work and have to get the house painted with my partner (and if there’s time, get the kitchen flooring installed).  Our investors are coming on on Saturday to see the progress, so I need to get a bunch completed by then.

As tired as I am currently (as in: right at this moment), my investors have told me that they are ready to buy the next house to flip (I keep telling them to sell the first one!).  I may be beat right now, but it certainly feels great to have investors who are willing to take on project #2.  (Deep down, it makes me wonder: could I get paid to work the flips (as a day job) as well as maintain ownership of the project (splitting the profits)…the thoughts are in the back of my head…)

My wife is REALLY awesome

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It seems that wherever I go, I leave a trail of houses-under-construction in my wake.  The picture above, was taken in my ‘wood stove room’ (ie: the room that has our heating source).  Because the picture is so well laid out, you probably didn’t notice the bare wood studs on the wall in the background, or the lack of baseboard trim.  If we panned the camera up, you couldn’t help but notice the missing trim around the kitchen window.  Continuing up the wall to the ceiling, the stalactites of foam insulation would convince you you had ended up in a Star Wars movie set on some alien planet.

My house is perpetually under construction.

My wife is awesome because she puts up with a half-finished house, however, my wife is REALLY awesome because of the object in the middle of the picture.  That object sat in our wood stove room for about two weeks.  As you can see, there is some drywall and some 2×4 lumber.  Kind of an odd object.

Well, if you have followed the saga of my flip, you’ll know that my first contractor is/was a magician.  The wall has been replaced, but with the new plan, the wall shifted about 3″ to the left, away from the bathroom.

IMG_20140216_150048112

 

What you can’t see in the picture above are the two radiators, one in the [former] bathroom (to the right) and one in the master bedroom (to the left).  When we decided on the layout for the entire bathroom, we needed slightly more room, about 3″ to be exact.  The problem was the radiator in the master bedroom, the radiator was tight to the wall.  When the wall shifted, the master bedroom side of the wall ran through the radiator.

We did some head scratching, some measuring, more head scratching, a little more measuring and finally decided to inset the radiator into the wall.  The only problem with doing this was painting the wall behind the radiator with the radiator in place.

Our solution was to build the radiator alcove before we built the wall.  We built the alcove at the flip, tested to make sure the alcove would fit around the radiator.  Once we were sure our plan would work, I took the alcove home and it sat in my wood stove room as I worked to get it finished.  I had to mud the corners and screws, sand the mud, mud again, then finally paint the alcove.

Even though I had this random part of a wall sitting in my living room, my wife never complained. I knew she was awesome before.  She’s proven she’s REALLY awesome.

Drive to 5 Update

Keep Calm

I’ve got a goal this year that I am calling my Drive to Five.  Essentially, I’ve got a goal to be in a position to receive $500/year in dividends (qualified and/or ordinary).  This $500/year is ‘forward looking’ meaning that on Dec 31, 2014, I need to own stocks which would pay a minimum of $500/year in dividends from Dec 31 2014 to Dec 31 2015.

Just like you’re not supposed to put all your eggs in one basket (stock), one of my unstated goals for FI is to have a few diverse streams of income, the anchor being the rentals.  In an ideal world, when I hit FI, I would like my stock portfolio to pay out a minimum of $5,000 annually.

This year, I started with about $82/year in dividends.  With my most recent purchases of KMI and SDRL, my annual total is up to about $116, a 40% gain.  The $116/year isn’t a huge sum of money, but I’d bet that if I came to you once a year and asked for $116, there would be a pause before you answered!

 

Disclosure: Long KMI and SDRL
Photo: logmycalls.com

The flip’s landing on it’s feet

Assuming you’ve been following the progress on my flip, you know that I started off with high hopes, which were quickly squashed by my first contractor, only to be revived by my second contractor.  The second contractor is awesome.  He has totally taken charge of this project; he calls daily with updates, asks questions, provides intelligent feedback and works incredibly quickly.  In less than one week, he had finished gutting what needed to be gutted, removed broken radiators, located new radiators (and had them delivered), rewired all the rooms that needed to be rewired, reframed what needed to be reframed and replumbed most of what needed to be replumbed.  I was blown away (in a good way this time).  He’s actually taking time off this week to finish another job, but I suspect it’s to allow me to catch up to him.

Assuming he comes in around the budget numbers, he’s my go to guy for my next project (yes, there is one on the horizon).

My contractor gave me some budget numbers: $1.50/sf for tile, $150/bath fan & light and approximately $500 for electrical odds and ends.  I was able to locate some tile for $0.50/sf, a bath fan & light for $20 and I had some 12/2 wire and other electrical odds and ends available.  My goal is to shave approximately $1,000 off the budget.

Some other finds:

From Left to right, top to bottom: Some additional tile for $1.00/sf from the local Habitat ReStore; Prefinished hardwood for $0.40/sf from ReStore; Both toilets from ReStore for $1.00 and $53.00 respectively; More tile for $1.00/sf; and a pocket door kit.

The pocket door kit is a story unto itself.  If you notice, there is a sticker on the door kit for $65, but on the rail above it is listed at $74.  When we brought it up to the counter to be purchased, it rang into the register at $74.  I asked the cashier to double check it and she replied (nicely) “I sell what the SKU is”.  I (nicely) replied “I pay what it says to pay, which is $65”.  She (nicely) agreed and took $9 off of our final bill for ‘customer satisfaction’.  I don’t think I’m becoming a cheap skate, but I realize that too many times in life I allow money to be ‘lost’, such as on this door.

Death and Taxes

Good ole Benny F. is credited with the quote “Nothing is sure in life except death and taxes.”  He may be right, but the quote puts tax season in a negative light.  There are parts of the tax code that I don’t like, but since I’ve been a landlord, I’ve actually look forward to tax season.

Last tax season, I didn’t really do anything to make my taxes more efficient.  I simply let the depreciation from my first property increase my tax return.  I had a few other things happen in 2012 (my daughter was born and a mortgage refi), but nothing really out of the ordinary.  However, I still received nearly $2,800 back from the Feds.  This $2,800 tells me a few things:

1) I was a fool and let the government have their way with my money throughout the year
2) I probably have more ways to cut back my taxes
3) Owning real estate really helps reduce taxes

424_426 Washington  [I don’t even have a picture of UFUO#3…that’s bad!]

With those pieces of information, I decided to increase my real estate holdings in 2013.  I purchased UFUO#2 and Duplex/UFUO#3.  I put about $8,000 into UFUO#2 rehabbing the place (resurrecting UFUO#2 from the brink of condemnation).  I haven’t done anything with UFUO#3 yet, but the property was fully rented when I purchased it, the tenants pay on time, they sometimes call about burned popcorn, but overall, they’re good residents.

The changes I made in 2013 were:

1) Reduce my withholding from my W2 day job (+$50/paycheck)
2) Save every freaking receipt to itemize every last expense (after compiling all the receipts, I realized I need to do better next year)
3) Track every mile I drive for HBS for the $0.55/mile back from the IRS (about 4,000 miles in 2013)
4) Make a plan for 2014 and adjust the budget for 2014 so I can come out even further ahead at tax time in 2015 (done, almost ready to execute)

My taxes are not complete yet, but (knock on wood) I’m feeling good about them.  I have more depreciation this year (~$2,400 or so v. $181 last year) and one of my units was vacant for 11 out of 12 months last year (UFUO#2, all while the rehab was happening).  I also realized that $5 if $5 and shouldn’t be left on the table, especially for the Feds to keep.  I had $5 remaining for my federal energy efficiency tax credit, so I decided to pull the ‘paid’ receipts to get that remaining $5.

Moving forward to 2014, I need to fully fund a traditional IRA in addition to an HSA.  Both are tax advantaged accounts, meaning my contributions will reduce my earnings for the year, which will further increase my tax return in 2015.  I need to do a better job tracking each and every receipt (they have to stop going through the washing machine!).  Lastly, I need to make sure that all items bought for business are bought on the business account.  There is a book I want to read regarding real estate investment (the closest library that has the book is about 1,000 miles away).  I was going to buy the book personally, but my wife reminded me that it is now a business expense rather than a personal expense.

Here’s to tax season 2015!

BtW: Weeks 6-9

These past few weeks have been incredibly cold (yes, I’m a wuss) and snowy (I only have a road bike…need to save for a fatty).  So yes, I’ve been creating a ton of CO2 while driving to and from work, not to mention the gasoline consumed.

About three weeks ago, before one of the more recent snow storms, I had brought my bike to work, anticipating riding home.  After 6″+ of snow, the ride home was not to be.  Finally, this past Friday, I was able to ride home.  On this particular ride, I decided to take a different route home.  The new route took me up a steep, snow covered hill.  As I approached the hill, I saw a sled at the bottom with no one around.  Perfect end to a LONG week.

I grabbed the sled and with bike in tow, headed up the hill.  About two thirds the way up, I saw this sign:

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I decided that the sled was steerable so long as I used my feet to steer to the right and left.  I got to the top of the hill, set my bike down and got on the sled.

It was a great ride to the bottom.  I haven’t really ridden a sled since high school and this was tons of fun.  I left the sled where I found it, hiked back to the top of the hill and continued on my way home.

Savings: None.

 

Updated Analysis of a Flip

Earlier I presented my numbers for the house flip that is currently under construction.  Those were my original numbers.  Here are some more up to date numbers as the project has progressed.  Some very experienced flippers would probably tell me that my original scope of work (SOW) was no good to begin with.  I’m actually operating under that notion anyway.  However, just because the scope of work was bad doesn’t mean the numbers were wrong.  Here are some updated numbers:

Original Estimate: Updated Projections
Item Cost
Property Purchase  $                 25,000 Property Purchase  $                 25,302
Kitchen Cabinets  $                    1,725 Credit for boiler  $                 (5,050)
Counter Tops  $                    6,480 Insurance Pmt  $                          88
Appliances  $                    1,350 Clean and prep of house  $                    2,542
Electrical repairs  $                    1,000 Kitchen Cabinets  $                       696
1st Floor refinish  $                    3,600 2 Bathroom and kit. Install  $                 11,380
2nd floor carpeting  $                    1,500 Add Alt: Roof Repair  $                    2,800
Bathroom update  $                    1,500 Interior paint  $                       750
Painting  $                       750 1st floor flooring repair  $                    3,600
Heating system  $                    1,000 2nd floor carpeting  $                    1,500
labor  $                    6,720 Boiler replacement  $                    4,000 No fuel switch
Contingency  $                    2,563 Appliances  $                    1,350
Add Alt: Exterior Paint  $                       500
Total:  $                 53,188 Contingency:  $                    2,500
Total:  $                 51,958

You’ll notice that the categories don’t quite line up.  For instance, the price for the two bathrooms does not really coincide with anything on my original estimate as we decided to add a 2nd bathroom into the project AFTER having closed on the house (not the best flipping strategy).  However, I believe I was conservative enough in my original estimates that I was able to bury the 2nd bathroom costs in the rest of the job.

A few things to note:

1) There were no associated costs for demolition in the original estimate.  I had assumed the clean out would take two days.  I was wrong.  Apparently, to make a bathroom disappear takes approximately two weeks.
2) The boiler cost looks like a loss ($1,000 in original, $4,000 in the new projection).  However, if we factor in the credit for the boiler ($5,050) plus the original $1,000, I actually had $6,050 for a boiler and I am projecting $4,000, which is a $2,050 benefit to my budget.  The only problem is this: with the intense cold we had here, the boiler tripped off, the system refroze and instead of one cracked radiator, I have six cracked radiators.  Ouch.
3) I forgot to include counter top in my updated projections.  I had originally spec’d out 16 running feet at a cost of $40/SF for a total of $6,400.  I had assumed some high end solid counter material.  After talking with some other house flippers, who told me I could make a counter top of gold leaf for $6,400, I decided to look around.  I thought, “Hell, what’s granite cost?”  Well, actually not as much as I originally thought.  I can buy slabs of granite for $145/slab (72″ x 25.5″ x 1.25″) – the only catch is I have to buy four.  So, purchasing four granite slabs including shipping is about $900, I only need two slabs, so for this flip, the cost is $450 (do you have a need for two granite slabs?).  I then have to cut the slabs and round over the edges.  I have a plan for how to cut the slabs so it looks good.  Stay tuned for a future post.
4) As with any project, we’re beginning to experience project creep, meaning small items are beginning to pop up which add to the cost of the project.  For example: Because of the disappearing bathroom, the existing waste line is now at a really bad height.  So bad in fact that we have to cut the waste line in the BASEMENT and install an entirely new line up through the house.  It’s so easy to think “Well, it’s only an additional $25, let’s go ahead and do it.”  Well, if you do that six times over the course of 30 minutes (which is easy), you’ve blown $150 (I don’t make $300/hr, do you?).
5) I’ve taken the project creep mentality and applied it to materials.  The fart fan*/light combo allowance: $150/light.  I found a matching set on eBay for $20/ea.  This would represent a savings of $260 over my contractor’s allowance.

The last, but most import observation between my original numbers and the updated numbers is this, as my business partner pointed out when we finish with this house, there will not be one thing the homeowners will have to do after they buy the house.  Everything will have been addressed.  Two brand new bathrooms; a brand new kitchen; a new master suite; new flooring; new roofs; freshly painted.  What’s not to like?  Based on my projections, we will have accomplished all of that with the same original budget, meaning my profit margins are still intact.

Lost my Health Care this Week

I’m in the leadership group at work, so I knew this was coming.  With the new Affordable Care Act requirements, my old health care plan was canceled.  The plan didn’t meet some portion of the ACA’s requirements.  Our problems at work were compounded because our insurance brokers never let us know that there was a provision in the ACA which allowed us to lock in our 2013 rates for 2014 albeit with a shorter duration (Plan ended Dec 31, rather than Mar 31).

The president of our company has stated that we should not expect raises (yes…like ever again).  That’s one hell of a pay freeze.  I’ve been looking at ways to optimize my expenses.  Republic Wireless…done it.  Reduced insurance coverages…done it.  Asked for a discount with the internet company…done.   No cable TV at home.  Cook 99% of our meals at home, yep.  I just need to learn how to make my own wine (AND I’ve received an offer to be taught how to make wine…that’s a win IMO).

Essentially we’ve made our monthly budget as efficient as possible.  Total savings from this optimization: about $400/month.  The last bill I had to pay, which I had no control over, was my health care bill.  My company is generous.  The total insurance bill for my family and I was $483/month and I was responsible for $140 of that.  Because I own over 2% of the company, I was not able to pay for that insurance pre-tax through an HSA or anything like that.

Enter Obama-care.

With the exchanges, I all of a sudden had the opportunity to optimize my health care as well.  In order to really examine my health care options, I needed a few pieces of information:

1) Our company sponsored health plan’s costs were set to increase by 92% for FY2014.
2) My portion of the bill in 2013 was $140/month
3) The company only anticipated a 25% increase in health insurance costs for 2014 (company would cover $428/month)

Based on this information, I ran some very rough numbers as a starting point:

Total estimated 2014 health care costs (group plan): $927
Company coverage: -$428
Difference: $499 – (An increase of 356% from my contributions in 2013)

Using this information, I went to Healthcare.gov and started surfing for plans.  Our company sponsored plan is/was a really good plan.  Low deductible, coverage for a bunch of things, etc.  The only problem with this plan is that my family and I are fortunate to be quite healthy.  We don’t need a really good plan, we need a catastrophic plan (now called a High Deductible Health Plan, HDHP).  There is no sense in paying for a $1,000 deductible if you never even hit $1,000 in medical expenses in the year.  Yes, I may have a bad year where I do have significantly more than $1,000 in medical expenses, but maximum out of pocket expenses under Obamacare is $12,500/year.  In a worst case scenario, I can use the cash flow from my rental properties to pay the full $12,500 (I receive about $982/month from the properties if I self-manage).

On Healthcare.gov, I learned a few things:

1) Because my W2 income is low enough (and apparently not projected to grow…), I qualify for the state’s health insurance for children.  Because I qualify, I have to use the state program rather than the exchange for my daughter.  ($77/month; $5 copays)
2) The HDHP plan I found is a catastrophic plan.  The deductible is $12,000/year, or only $500 less than the max out of pocket.  This plan only costs $307 before any tax credits (let’s assume I don’t qualify for a tax credit)

Using the available data, I quickly calculated that with a health care plan that I can choose for myself (rather than forced into one specific plan), I should be able to realize a savings of $499-$307-$77 = $115/month, excluding any company match/kick back, etc.

The current plan proposed by the president of the company is to give all employees a ‘raise’ equivalent to the anticipated company expenditures for health care in 2014.  For me, this means a raise of $428/month.  Knowing this last bit of information, I can dial in my savings/health care optimization a little tighter.

1) We are not going to use the plans that are 92% more expensive.
2) The company is not offering health care for 2014, but giving everyone a ‘raise’ to compensate for the company paid portion of health care ($428/month)
3) In addition to the company portion, I was paying $140/month for health care in 2013

Under the new scenario, we can add the company ‘raise’ with my previous out of pocket expense and subtract my new premiums.  In doing so, we arrive at the following equation: ($428+$140) – ($307+$77) = $184 savings/month.  To really optimize this whole process, I will have to open an HSA and deposit at least the $184/month into the HSA.

While I grumbled when I first heard that our premiums were jumping 92% because of the Affordable Care Act, I decided that the ACA actually benefited me significantly by allowing me to 1) choose my own plan and 2) get a savings/’raise’ in 2014.