November Begins

It's been a busy beginning of the month. Escrow closed for one client. I dropped off an earnest money deposit for another. I had the normal collection of rent. I'm cleaning up after renters and listing stuff for rent and for sale. I also installed did some repair work.

A couple things I had to do were plumbing. I capped a 1/2" copper pipe that was used for a swamp cooler. It had a saddle (or vampire) tap, and the tap was leaking, so I removed it. The mineral content in the water had caused a very large hole to form under the tap, so I cut off the pipe with a hacksaw, cleaned up the edges and slipped on a 1/2" Sharkbite® fitting. The fitting went on in less than 10 seconds. I can solder, but this is so much faster. They can even be removed with a plastic tool. They are available at Home Depot. Lowe's has a similar product, I think it's called Gatorbite®. They cost around $5 instead of $2 but save so much time, and are way cheaper than calling a plumber. 

I also replaced a low boy toilet with a standard height toilet. The copper piping is surface mounted on the brick wall. The 't' fitting had to be moved 4" to the left to allow the tank to clear the angle stop (my fault), and so I cut the pipe and used 2 of the 1/2" couplings to do this. Once again, saved a bunch of time. This particular run of pipe has caused me some problems soldering before.

I hope to have more updates later. Last month was crazy busy, and this month has a lot of catch up to do.

How to use a power sewer snake.

I figure you're reading this because you want to know how to use a rooter. If you're afraid of things that typically go down the toilet or have a sensitive sense of smell, don't read anymore.
One of the things you might find yourself doing as a landlord (and maybe as a homeowner) is snaking out your sewer drain. It might be because of roots, papertowels, kid's toys, tennis balls, rags, feminine hygiene products--ok you get the picture. I've found all of the preceding items. Pity me.
Both Home Depot, Lowe's, and Harbor Freight Tools carry plumbing snakes. I bought the one by Ridgid for around $400. Harbor Freight's runs around $250-300, but doesn't look as sturdy or as safe, as it has an open cage design as opposed to the plastic shell that surrounds both the Ridgid at HD or the model that Lowe's carries. Also, buy the PVC gloves that are nearby.
In any case, it generally costs around $200+ for a drain cleaning service to come out and snake the main line. I've heard that Mike Diamond charges $99 for any drain, so that would be a good deal, depending on when his guys are available. Most inexpensive rooter services take at least 8 hours to get to your job, in my experience. So if you've ever had a rooter guy out 2-4 times, you could've bought the tool.
Now that I've blabbed your ears off (eyes off as you're probably reading this) I guess I should stick with the HOW TO in the title:
1. Take off the cap to the cleanout (you might want to be wearing those gloves, eye protection, and shoes you don't care about--I wore my Tevas today, but I knew I could just wash off my feet.)
2. Let water flow out while you go plug in your snake and determine where the best place to put the machine is--that's why you take off the cap BEFORE you bring your snake over.
3. If you haven't put on the PVC gloves yet, now's the time.
4. Place the snake 2-3 feet from the cleanout.
5. Put one of the attachments on the tip--I use the root cutter for most jobs. It's U-shaped. The spade bit is also good, but as this is on a rental I want to see if my tenant is to blame, because then I charge them for my time. There is also a corkscrew/spring attachment, but I don't like this one.
6. Start feeding the metal spring down the clean out by hand. Don't use the motor yet. When you have pushed the spring as far as you can by hand, stop pushing.
7. Adjust the spring so that there's a little slack, but not too much as the spring can form a loop and catch your hands, fingers, or just smack you. The spring can also catch skin, cloth, or your gloves in the grooves, so treat the machine with respect. Then step on the foot switch and hold the spring loosely while the motor turns the snake. Do this for about 15 seconds to one minute. After some practice you'll be able to notice differences in the sound of the motor.
****Safety Warning**** If the snake loops up, you take your foot off the switch. Then put the machine in reverse. Tap the foot switch to unwind the snake.
8. Repeat steps 6 and 7 until the water has drained out of the pipe or you've reach the end of the snake.
9. Put the snake in reverse, but don't push the switch unless you need to.
10. Start pulling the snake back and load it back into the drum.
****Warning**** The snake is a spring that can fling the effluent on you and the end has a tend to whip if you pull it out too quickly. Anything stuck on the end of your snake might get flung at you. Use your imagination.
11. I like to run a hose down the drain AFTER it's been unblocked.

If you're on a septic system and the clog won't come out, your septic tank may be full.
Hope this helps. If you're afraid to do this yourself, my buddy or I will do it for a couple hundred dollars if you're in the High Desert. :-)

Credit Crisis brings opportunities for Seniors

Three important events have occurred that bring rise to opportunities for seniors to increase their retirement income. The drying up of much of the conventional credit market, the limitation of conventional loans for individuals, and the collapse of housing prices. Why does this bring new opportunities for seniors?

At this point everyone knows how hard it is to get a loan after the Fannie Mae and Freddie Mac failures that culminated in disaster last month. It's hard for even people with good credit to get loans at the moment, and underwriters and looking very closely at all aspects of loans they are approving. New laws to prevent real estate speculation have limited the number of mortgages and individual can have to four conventional loans. Because of these conditions, combined, with housing prices that have dropped and opportunities in the REO market, seniors have the opportunity to hold mortgage notes to increase their retirement income.

A senior I know just told me she's making three percent (3%) on her CD and she's looking for ways to increase her retirement income, as SS only pays $700 per month. She owns her home free and clear, but has repairs to do to the house, especially in the kitchen, where the sink leaks, but she doesn't want to deplete her meager savings to fix problems that are a health hazard and are damaging her house.

Seniors have the opportunity (especially in California) to take reverse mortgages out on their homes and reinvest the money or loan it out at hard money rates. By buying investment properties or mortgage notes, seniors can increase their passive income and avoid endangering Social Security income. The senior above could take a reverse mortgage line of credit to do the repairs she needs, paying 7.5% or less in most cases, then draw from her LOC to loan out at hard money rates (15-24%) secured by 1st mortgages or rehab loans, or buy rental property for cash
and rent the out.

I have 6 conventional mortgages out, on 10 properties, and 2 hard money loans, and 2 properties are paid off--I own them free and clear. I bought smartly and all of these properties have positive cash flow when rented at 80% occupancy rates. Due to the new limitations on the allowable number of conventional loans, I can not get a conventional loan on the 2 properties that are paid off. I had to go to a hard money lender to get funding. I am getting a loan for less that 50% loan to value (ltv) at 11.5% but I am paying 8 points, so my apr is basically over 17%. I am happy to get the loan because it is going to allow me to earn a return higher than what I am paying. I've even seen websites out there that say they'll loan 40%LTV at 19%.

So, the above mentioned senior could conceivably borrow $100,000 at 7.5%, fix her house for $20,000, then lend the remaining $80,000 out (I recommend smaller loans to spread out the risk) at 15% with 7 points, and she would bring in an additional $1000.00/month and as the loans mature or are paid off early she would bring in the $5600 in points, which may increase her net return, because the investors don't want to pay the 15% rate for a long time. Or, a senior could invest the $80,000 remainder in a rental or several rentals and collect rents of $750 to $1600 depending on how they did it, but that would entail more management time, and I think the return on investment in the hard money market would be better and entail less risk now that housing prices are down.

I happen to know that there are several investors out there looking for the money to make their deals happen, and wouldn't mind paying the high percentage rates to get it done.