All Forum Posts by: Jeff Bridges

Unfortunately IPN.com is being phased out starting May 31. They are forcing all users to obtain a paid subscription to quickbooks, which has a built-in invoicing feature that offers this payment service at the same transaction rate. The payment feature will no longer be available as a standalone feature and they rope you into a $13/$26 per month plan for the privilege continuing to use these services. Users that don't care about quickbooks or want the $312 annual subscription cost will likely want to search elseware. The details are below:

http://support.quickbooks.intuit.com/support/articles/INF29563

 Unfortunately Intuit paymentNetwork and IPN.com is the same thing. That is the service that is getting shut down FYI in case you already use this service.

I took a closer look at the fine print. The special discount of $13/month for a quickbooks subscription applies to the first year of quickbooks subscription (50% off normal rates). The following year, its $13 and $26 respectively for the two online plans; the $26/ plan is needed in order to be able to issue recurring invoices, which most landlords will likely want. For some reason, having recurring invoices doubles the cost of the service. So total cost for the year after initial year is $312 plus transaction fees. This is definitely not going to encourage me to start using quickbooks as I don't like their tactics.This makes cozy and even some of the other providers with $3-$5 transaction fees look like a bargain. Disappointed to see this one go...

If you want no deductible, you need to go with the electric utility company service plan coverage. These plans usually do not cover full replacement of your furnace/ water heater/appliance for example, but they will repair/bandaid it until parts are no longer available. At that point, you will need to pay for a new furnace etc. Assume you have duke? Theirs is below. never used it so use at your own risk.

https://www.duke-energy.com/homerepairplans/

Home warranty plans can cover replacement of appliance/ HVAC etc up to the terms and conditions max amount (assuming a repair fails or no parts are available), but they also have minimum maintenance requirements and other disqualifiers for claims like rust etc just like the energy providers. Pick your poison depending on how old your appliances/HVAC are and if you prefer no deductible and higher up front cost or lower up front cost, deductible and possible replacement coverage if not repairable. Or self insure in a savings account. Also, plan to have once a year planned HVAC basic service if you get a home warranty to prove you did the bare minimum in maintenance in case a claim is made. keep your invoice.

If you don't mind a smaller deductible $45/$60 for example:

Delta home protect: (They have an systems only (HVAC/Water heater/ plumbing/ electrical) plan and a full house plan, their phone sales folks will haggle and give you a $45 deductible in exchange for a 2 year contract vs 1 year). My systems only plan is $250/year with $45 deductible (2 years paid in full). Their online reviews for claim/customer support are surprisingly good, and that says alot in the home warranty space. I know my heat pump is near end of life so replacement coverage from a HW is more important to me than the local energy company service plan coverage, which does not offer replacement coverage if not repairable. I've evaluated both carefully.

http://www.deltahomeprotect.com/

 This helped me understand umbrella claims better. It looks like you have 1.5 million in coverage, but not the 2m you originally thought. In a lawsuit, you only make a single claim against your homeowners policy, then on your umbrella to cover excess in response to that lawsuit. You are not actually making claims against your other properties in that case; those are just assets that you need to defend during the lawsuit. Those only kick in as a result of an incident related to that particular property and don't apply if its only related to a different property. Your umbrella backs each of these up as excess coverage. My school of thought is to make sure to insure just over my net worth, but not too much above it since counsel in a lawsuit can then try to make you settle for your higher umbrella coverage rather than actual net worth if they find out about your policy limits.

Another helpful link:

http://www.financialsamurai.com/how-does-an-umbrella-policy-work-and-how-much-does-it-cost/

@Peter Tverdov I'm not sure that's how it works, but maybe someone could corroborate. Your max aggregate coverage for a single liability claim is 1m, not 2m. Umbrella is coverage provided above and beyond your existing dwelling policy up to 1 million. Umbrella requires a minimum dwelling liability on your primary policy and will kick in after 500k up to 1 million in a single claim in your example. You can't borrow aggregate liability protection from other homes you own when you are being sued for 2 million dollars for example. So to say that you have 2m in total coverage is not accurate since you can never use that amount to pay a claim. It appears you would also be on the hook for 300k if someone sued you for 1.3 million (all of your assets) for example, your policies would only pay 1 million total. Just something to give you pause... not a insurance professional but my understanding of it.

Any possible clauses inserted into a contract are also dependent on two additional outside factors out of your control: a) insurance company approving insurance claim and paying for repairs B) owner following through with claim process following closing. Insurance provider could deny claim and say it was a maintenance issue for example. Owner could say they followed the spirit of the agreement and did not receive any insurance payout, but never put in requisite effort to complete claim process because they didn't really have to in order to fulfill contract terms. The only guarantee is adding a repair credit to the contract or escrow repair amount based on quote to repair roof. If insurance pays current owner, they would be made whole but if claim didnt get paid, you still have the repair escrow held by title. Make sure you get your repair credit regardless of insurance claim bureacracy or negotiate something else like better price etc to make you comfortable.

Bank of america business checking will issue you a deposit-only ATM card that you can issue to each tenant. I use this with success. it has no fees like moneygram, just a minimum balance requirement or monthly account fee is charged.

https://briankondas.wordpress.com/tag/free-bank-of...

It sounds like you're just moving money around, not optimizing any particular income or making any real forward progress. Borrow from yourself to pay off a mortgage only to take on another mortgage? I don't really follow the benefit to you. If the rental generates income only when its fully paid off, maybe its not the ideal asset in your rental portfolio and not serving your best interests. After all, when you refinance it, if you manage to find a way to do so, it might require less in debt service payments but its still would be pretty close to breakeven cashflow and possibly begin to lose money as you begin to deal with major cap-ex projects like roof replacement and mechanicals. I see this as doing a job (property management) for free. Why not consider selling the asset at the height of the market (today), and then holding proceeds for buying a better cashflowing acquisition that cashflows with very little up-front investment on your part. We're due for a small technical recession soon (sometime in next 2-3 years) and you'll be prepared to snap up a good opportunity with whatever proceeds you get after the sale. It just seems your finding ways to squeeze profit out of a rental that doesn't even meet the 1% rule, let alone the 1-2% rule that most investors consider as the minimum sniff-test before more in-depth analysis on a purchase decision. If you could sell for at least break-even on your investment, I would be doing that in your shoes while the market favors sellers. You have no cashflow income and we're at the height of a real estate boom coming out of a recession so your appreciation potential will be limited here on out. Let your TSP work for you to support you in retirement and leave it alone; this rental sure won't be supporting you in retirement. Remember you need to do your analysis up front to get a great deal at purchase or else there is no amount of financing that will save you from acquiring a cashflow negative deal. This is just a personal opinion as a regular investor. Good luck!

To be honest, its really his problem. He can't tell you how to pay your mortgage unless its specified in the promissory note as a stipulation. If he want's it direct deposited, that's on him to supply you with a service to be able to pay via his preferred method. There is no free process to do that, so why should you be eating that cost for his convenience when billpay works well and is free? When I setup a seller financing note for a seller financing deal, I used a mortgage servicer who manages payment collection of seller financed notes by accepting a check at a PO box and then direct deposits into the lenders account. Their website is sellerloans.com and they charge $15/month for this service. seller will need to set that up since its his loan. They have great customer support and no online accounts required to set everything up. The alternative is using IPN via link above to handle direct deposit only which is perfect for small business direct deposit payments like yours, you both setup accounts where the direct deposit will be done, and then arrange for the 50 cent fee per transaction be billed to the lender/seller, since that is for his convenience, not yours. they'll need to setup an online account as well, no way around that... Again, I'd put the onus on the seller to supply you with the direct deposit service and bear the cost for such service. This shouldn't be your headache since you are fulfilling the note terms by paying via check. Feel free to provide the suggestions above, but you should be under no obligation to pay for or setup the above services if utilitzed.