August 21, 2017

Selling our home in California: Part 1

Part 1 of selling our home in CA Do we rent out or do we sell?

I was sorely tempted to keep this home as a rental property but ultimately decided against it for several reasons:

  1. Because of our refinance last year, our monthly costs are quite, relatively, low now. All told, our mortgage, HOA, insurance, and taxes run about $3350 per month. A home this size would probably be renting out for around $3500-3700 per month. That’s a cash flow of $179 to $379 per month. That’s not nearly enough to cover the maintenance and have a real profit margin. The two first years of cash flow would have to be banked against maintenance costs. That could work if I wasn’t so risk averse, we didn’t have any other drains on our income, and we had a comfortable savings cushion to cover our new home expenses. Which leads me to Reason number 2…
  2. We’re comfortable right now but not once you subtract the new mortgage and reno costs. We need the profit from the sale to recoup that spending. Short term thinking, admittedly, but I’m ok with that given Reasons 3 and 4.
  3. Both our CA properties are in the worst subduction zone possible. If and when the big one hits, both properties are highly likely to be completely destroyed. I’m not willing to bank my sense of stability on hoping there’s no major earthquake until we can easily afford the deductible on our earthquake insurance for two properties, and deal with the pain of rebuilding both. One will be painful enough.
  4. I don’t want to be a hands on real estate investor. I’ll do the accounting and management from afar but if we owned a property as nearby as this, I would feel compelled to do much of the property management myself. At this stage in life, that’s not something I’m prepared to do. The other option, hiring a property manager who would take 10% off the top, means the cash flow would be even less. In fact, that expense would drop our cash flow down to nearly nothing.
  5. After five years, we wouldn’t even qualify for the cap gains exclusion.

What’s the point, then?

I know that this is the right decision for us even if I am grumpy that the math doesn’t work.

Tax implications: Capital gains exclusion

I know, this may not be the first place your head goes to when we’re talking about getting ready to sell your home but this is a huge one in our state, given our market. Once I was sure that selling was the right way to go, I went straight to the IRS for the goods to make absolutely sure our sale qualified and that we were eligible for the exclusion.

How your sale qualifies. Your sale qualifies for exclusion of $250,000 gain ($500,000 if married filing jointly) if all of the following requirements are met.

  • You owned the home and used it as your main home during at least 2 of the last 5 years before the date of sale.
  • You didn’t acquire the home through a like-kind exchange (also known as a 1031 exchange), during the past 5 years.
  • You didn’t claim any exclusion for the sale of a home that occurred during a 2-year period ending on the date of the sale of the home, the gain from which you now want to exclude.

All of these are true: PiC purchased this home long before we married, we’ve both lived here for much longer than the 2-year use requirement. We file jointly but I had to be sure that only one of us had to be an owner for the 2-year ownership requirement because we left the title in his name.

Marriage. Married individuals may exclude up to $500,000 of gain if they file a joint return and neither spouse excluded gain on the sale of another home within a previous 2-year period. If one spouse meets the ownership requirement, both are considered to have met the requirement.

I’m still working on whether or not we are exempt for CA state taxes but I’m reasonably certain that we should be.

Hiring an agent

I know most PF bloggers would say “go take a real estate course, and sell it yourself!” But I’m not (mostly) an idiot. That works for people who don’t have serious and severe limitations on their time and energy. I’m hiring someone to perform a service and to spare me the real pain of having to learn an entirely new skill in a compressed period of time.

I can take the real estate course when I’m not juggling fireballs and spinning ten plates in the air. Later.

We had a great agent referred to us by our friends who were really happy with her services, twice. After meeting with her and chatting by email, we determined that her rate and style were in line with our expectations.

Out of her fee, she would be paying for all marketing, the deep cleaning service, the photography. We’re paying her to advise us of regulations, the best way to market the sale, strategize pricing, do all the marketing legwork, and handling all our negotiations.

She’s the antidote for needing to sell while suffering from a fair amount of information overload, and serious decision fatigue. She’s been incredibly responsive and flexible, going to great lengths to minimize the disruption to our lives, which was highly appreciated considering how much we’re keeping moving at the same time between this sale and our renovations.

She’s even been helping with the seemingly endless packing and transporting furniture to get this place show ready. But that leads into a whole other story, for a whole other day.

:: Have you ever done a FSBO or been tempted to? Or did you go the agent route when it’s time to buy or sell? How was that experience?

August 17, 2017

Just a little (link) love: Otters meet butterfly edition

LinkLove

This is America in 2017. This makes my heart HURT. I have dozens of Jewish friends, disabled friends, Hispanic friends, black friends, queer friends. They’re all targets for this hatred and this is not ok. 

Being too optimistic and too nice sound like good problems to have, but they ultimately lead to rushing—a not so good trend.” – yep. I have FINALLY figured this out and ruthlessly control the number of errands or tasks I commit to in a day. If I’m in charge of dropoff, I will also fit in one errand on the way home but no more than that, no matter how tempting it is.
Our brains are wired for instant gratification or hyperbolic discounting. My brain prefers to plan a year into the future and always wants the later, larger gratification instead of smaller, immediate gratification.

Snippets from Neil Gaiman on fear, speed of memory access (and mostly lack thereof, a thing I suffer from greatly these days), and sundry items.

Dating stories usually make me cringe and be ever so glad I’m not in that world now but the “efficient” 🙄 project manager setting up multiple dates in a night, and what happens as his dates find out, is just utterly fantastic.

Tips on how to avoid micromanaging when you and your team work remotely

August 16, 2017

My kid and notes from Year 2.5

My kid in year 2.5

Books, books, everywhere

We read three books to JuggerBaby before bed every night. On the rare occasions PiC isn’t there for bedtime, that can go up to seven as compensation for loss of daddy, but that’s only happened a few times in zir short life.

We once agreed that after being long distance for nearly a decade, we were ready to settle down and stay that way, in near proximity to our family for a long time.

We repeat lots of books; I’ve read that repetition is good for young children because it helps reinforce language. I can certainly see it developing as ze memorizes the stories and bursts out with truncated rushed narration every few pages.

It makes me wonder what my parents did at this age. Supposedly I already knew how to read so maybe they let me read to myself? We didn’t own many books, though, just the encyclopedia and a dictionary. I remember reading newsprint and smudging everything, though.

Sweet sleeper

For a whole week this month, I was instructed to stay in zir room with zir, after bedtime: Mama sleep dere peez. I’d just lay down and pretend to go to sleep for five or ten minutes, sometimes fifteen, and after several “Mama, what doin?” queries, ze would pass out. On Night 8, PiC passed out during reading and bedtime, so he groggily offered to stay for a while in my stead. Nothing doing, though. Night 8, ze kicked us both out: Mama, Dada, sleep own bed. Good night!

PiC: Can Dada stay?

JuggerBaby: No, Dada sleep own bed, good night!

Well then!

I don’t know why it continually surprises me that JuggerBaby’s sleep habits change so frequently. I’ve never been a good sleeper. Since early childhood, I’ve been prone to nightmares, restless sleep, and insomnia even before the pain became a problem. Was it just wishful thinking to hope that ze would inherit PiC’s amazing powers of falling asleep anywhere, anytime? Probably.

Manners

I love that daycare teaches the kids new concepts, but I don’t love that they don’t come with manners. This month we’ve been working very hard on the concept of manners.

Instead of “I don’t WANT it!!!”, we prefer “No thank you.”
Instead of “I WANT THAT”, we prefer “May I have….”

It took weeks but ze finally started voluntarily asking for things politely:

“May I see?”
“May I hold it?”
“May I have more stickers, please?”
“May I have mama’s purse?”
“May I sleep in big bed, please?”

Bathtime playtime

The bath is incidental, from JuggerBaby’s point of view. Ze just expects to splash in zir tub of water while a bath happens to zir. I used to vaguely plan to get zir some bath toys but ze has been perfectly content with a handful of blocks, a boat, and a few empty shampoo bottles. It used to be about building and stacking, now clearly the imagination has set in as ze “cooks pasta” by using small containers to fill larger ones and we pretend to eat “pizza and pasta and butter and avocado!” (Ew)

What’s even more interesting is that ze clearly understands the concept of “pretend” now. The “pasta” and other food groups are water but ze understands that this is pretend only, so we don’t really drink the water. “Oh, no drink?” “No, just pretend.” “Oh ok.”

I know for a fact that I didn’t grasp that “pretend” wasn’t real until well after 7 or 8. My jerk sibling took full advantage of this, of course. It’s one of the reasons I felt stupid for so long – he was a master at manipulating me from very early on and it took too many years to catch on.

I’m hoping we’re giving JuggerBaby the tools to spot these things without falling for an abuser’s tricks first. I often wonder if our coddling means ze won’t believe us that terrible people exist, when I’m closely related to some of them, because I won’t let them near zir.

Precious #parenting moments

  • JB + tape measure: it taller and taller and taller!
    Me: Be careful, that can cut you.
    JB: and taller and ‘igher and taller ow
  • JB: MY CHIN OWIE!
    Me: what happened?
    JB: I pinch it.
    Me: so don’t do that.
    JB: Oh.
  • Things I’ve washed out of JB’s hair: yogurt, rice, red wax, guacamole, orange pulp, cheese, sand, fur, corn kernels, scrambled eggs…
  • Me: JB, you have two minutes before we turn off the tv.
    JB: NO!
    Me: *mother’s glare of THAT WAS RUDE*
    JB: ONE MINUTE!
    Me: …. Ok.

:: Did you ever struggle with sleep? Did you prefer to sleep alone or share your room with live or stuffed companions? Is there a good effective way to teach kids about people and their machinations without hurting them?

August 14, 2017

My secret emergency fund

Our secret cash stash Our savings have been decimated by this year’s spending. The new place and the work required is classified as No Joke and that spending is projected for months. Labor and materials will eat all our cash and liquid funds (CDs). We’re selling some stocks because we’ve got some options expiring in six months. Now if I’d picked up the gift of foresight at the shop like I meant to, I would have exercised those options last summer and avoided the short term capital gains tax. But I didn’t, so I’m leaving aside 40% of the stock sale for taxes.

I haven’t felt this poor in a decade. Nor have I been this stressed about the state of the world, our country’s moral deficiency, or the future in … ever.

Why, you might ask, am I not crying in the designated corner for such heartbreak? Or perhaps gibbering?

Because I have a strategy! Because even though there’s not much I can about about the fact that enough people in this country are racist, sexist, and hateful enough to have elected an evil, morally bankrupt, utterly self serving, cancerous tangerine to office, I *have* been this poor before, seriously poor, and without any of the resources I’ve got at my disposal now. So the money problem I can do something about even while I worry quietly that our economy is due for a bit of a crash soon.

We have two good incomes. Back then, I had one small one and the energy of youth to press my career forward.

This is just a small challenge. A temporary setback.

However. The last thing I want to do is find ourselves in a position where we’ve spent down every last dollar and then surprise! Flat tires! Six in a row. That was 2007. There was much gnashing of teeth and many tears of frustration.

I’ve put up a sign: No surprises are welcome here. My long experience with money, and not having it, is that Murphy usually kicks the sign over, pees on it, and moves in.

Hence, my backup plan: even while we’re cracking open one CD after another, I’m “secretly” hoarding every penny and dollar I can get outside of our usual income. Reimbursements, bonuses, rewards are all fair game.

Every month we get $208 from our daycare reimbursements. Yoink.
Those Chase bonuses? Yoink.
My Swagbucks PayPal redemptions? Yoink.
MyPoints money? Yoink.
Reimbursements of any kind? Yoink.

Any and all little bits of income are getting stashed. It’s hiding in a separate account, complete with alias and trench coat disguise.

We both know it’s there. It’s small but growing, like a tiny revolution against the possibility of more debt as a side effect of swallowing the massive mortgage. If, by some great good fortune, we don’t have to use that to make ends meet, that’s money we can contribute to good causes in hopes that we will have a country worth living and retiring in.

That keeps me sane at night.

:: Do you squirrel away pockets of money or canned goods? How much extra cash helps you sleep at night? Are you supporting any good causes these days? 

Swagbucks: Luau Team Challenge

1. Click here to join the challenge and be assigned to a team. You can pre-register starting now. If you haven’t joined Swagbucks yet, you can sign up on this page as well.

2. Starting Monday August 14th at 8am PDT, you’ll contribute points to your team’s total as you complete activities.

All members who participate and contribute at least 600 points to their team’s total will receive a SB bonus in the form of a SB Swag Up Rebate on their next gift card.

If you join Swagbucks using my link and you earn 300 SB before September 1st, you’ll get a 300 SB bonus.

Members of the 1st place team will receive a 100 SB Swag Up Rebate, members of the 2nd place team will receive a 50 SB Swag Up Rebate, and members of the 3rd place team will receive a 30 SB Swag Up Rebate. Your SB Swag Up Rebate will be made available on Friday, August 18th at 2pm PT and will expire on Thursday, August 31st at 11:59pm PT.

 

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