Refinancing Investment Property Mortgage

I'm now firmly convinced the only way to refinance a mortgage is via a no closing cost option where the broker provides a credit to cover the closing costs with the acceptance of a higher interest rate. People can argue you have to do the full analysis, but who really does that?

Taking the no-closing cost approach makes the financial analysis much simpler. If you can get a lower rate without increasing loan balance and no out of pocket costs, it is pretty much an automatic decision if cash flow is not your primary concern.

That being said I locked this past week on refinancing our latest rental property. We'll be refinancing our 5% 30yr fixed Maturity Sept-2041 loan to a 4.5% 30yr fixed loan with the existing loan balance. I've heard the mortgage approval process continues to get more painful, but Im assuming this will be no worse than when we did the original financing for this rental investment back in August 2011.

When is a SmartPhone the Right Financial Decision?

I last purchased a typical cell phone back in October 2008 with a 2 year contract when we returned from China. My old cell phone broke while we were on assignment in China and I needed something once we were back on the ground in US.

I have been eligible for an upgrade for quite some time, but have resisted getting a new phone that required a data plan. Like many, my head danced with the idea of being able to get so much more done while on the road and staying connected. I knew when I bit the bullet to get a basic cell phone years ago that I would never go back to going without one and I know if I upgraded to a smartphone with internet/data access I will never go back. Upgrading to a smartphone is a clear lifestyle upgrade decision that will continue to likely go on for the rest of our working life and not something I want to make without careful planning. At roughly $30/mo or $360/yr for decent data plan - that kind of subscription expense adds up over the course of the next twenty years (about $7.2k).

So after a lot of reflection I felt at some point I would make a decision to get a smartphone. There are clear benefits to me in my current situation - I'm time poor and I feel confident a smartphone would help (hard to quantify though in $). As my children grow up and become more active in extracurriculars, I think a smartphone would give me a bit more freedom to shuttle them around so I foresee the need increasing over the next several years.

However rather than just rush out and buy one, I created a financial goal to focus on - paying off the primary mortgage on our Rental #1. With the mortgage paid off, we'd have an increase in cash flow that would be moving us forward in our financial goals and easily offset the increase in our fixed monthly expenses for a data plan. I've been doing just that - trying to keep my current phone going as long as I can and focusing on eliminating the rental mortgage to increase our cash flow. Im within about 3 years of that goal right now.

Well things came to a head this weekend as my phone died on me. I can't go without my cell phone between my job, rentals, etc - it is a critical link for me. This was the scenario I didn't have a good answer for -- do I try to find a cheap replacement phone or go ahead and upgrade to a smartphone? I made the decision to upgrade today because I need a phone and didn't see a cheap replacement option I was comfortable with. It is unfortunate I didn't have the rental mortgage paid off first, but I feel I need to continue my focus on the financial goal to help offset the small increase in our expenses. When you add this to all our other small monthly expense increases - they add up to a healthy chunk of committed cash flow.

I don't think there is an easy answer for those who are wrestling with the smartphone upgrade decision, but remember it is lifestyle inflation that will add up over the long run. I think the best strategy in the end is to defer the decision as long as you practically can.

April 2012 Net Worth Update (+$2,763)

Highlights for April

We like to take advantage of 0% APR balance transfers and other credit card offers for free money. We are actively looking at taking advantage of new credit card arbitrage opportunities.
We received $1,000+ in rewards cash on 2 Chase Ink credit cards (one for my wife and 1 for myself) after we spent each spend $3,000 on each card in 3 months. We used Amazon Payments to maximize our credit card spend to qualify for these offers.
Our properties are listed on our balance sheet based on their cost basis, not current market value. I believe real estate is too illiquid to list based on recent sale transactions. For those interested our March Zillow property estimates are: $198,800; $122,80; $278,800; and $224,500
We continue to focus our free cash flow in 2 areas: rebuilding our cash position and paying off rental #1 primary mortgage to improve our monthly cash flow.
April was pretty much a wash after a disappointing performance from our investment portfolio. I'll post additional details of our investment activities in April later this month.
In April I posted about what I thought was working well and what we need to focus on in our journey to reach our financial freedom goals.

Best Kitchen Time Savings Technique

I have found one very powerful time savings technique that has really paid off for us more than any other in terms of saving us time in the kitchen and still being about to eat really well with our busy schedules.

We now will typically buy 5-10 pounds of a grill meat (typically chicken breasts or pork loin) when its on sale and then marinade/grill it all for a weekend meal and then continue to use the leftovers in quick and/or one skillet meals over the next several weeks. Its little extra work and really gives us more flexibility and time savings for dinners during the busy weekdays.

For instance this past weekend I marinated about 7 pounds of chicken breasts for a couple hours and then grilled all the chicken right before dinner. The 3 of use had grilled chicken as our main entree for dinner and had most of the chicken left over.

An example of some chicken dinners to use with bulk grilled chicken:

Grilled Chicken itself as an entree. We usually have this the night we grill out and then slice up the leftovers into grilled chicken breast strips for future use. We'll freeze about half of the chicken strips for future meals and keep about 3-5 meals worth in the fridge for meals during the next several days.
Grilled Chicken Salad
Stir Frys - Stir frys are very easy (ready in 10+ minutes) and you can vary them up so much that you can eat a several meals in a row and not get bored with them.
Chicken Quesadillas
Chicken Nachos
Chicken Tacos
Any One Skillet Meal that calls for chicken - our favorite is a chicken jambalaya
BBQ Chicken Pizza
Plus a ton of other chicken recipes

This idea more than any other has really helped us begin to save major time in the kitchen and still get good meals. Any other major time savings ideas in the kitchen you would recommend we try?

We Just Earned $1,000 For A Few Hours of Work

My wife and I each recently cashed our $500+ cashback checks from Chase Sapphire for a total of just over $1,000 for opening 2 credit cards and just a few hours of work.

In January my wife and I each applied for a Chase Sapphire Credit Card with 50,000 Chase Ultimate Rewards bonus points promotion after you spent $3,000 on the card in 3 months. Chase Ultimate Rewards are worth $0.01 per point for cash rewards so 50,000 points are worth $500. It easy to request a rewards check via their web site or you can apply the points to travel purchases for further bonuses, but these days we are opting for cash as we don't have near term travel plans.(Note: The Chase Sapphire card is currently offering a 40,000 bonus promotion for new cardholders as of 4/1)

How to Increase Spend for Credit Card Offers
While our monthly expenses are a couple grand per month, its difficult for us to effectively target all our spend on the right credit cards to make sure we meet the spending requirements. We successfully used Amazon Payments to spend $1,000/mo on each credit card in round trip transactions. My wife would transfer $1,000 to me from her credit card and then I would do the same from my credit card. It worked out well with two of us doing it at the same time to effectively pass transfers back and forth. We also used Amazon Payments to help us earn 200,000 British Airways Miles on another credit card promotion for our transatlantic journey late last year.

Does It Damage Our Credit Score?
My wife was initially resistant to the idea as she was concerned about hurting her credit score. It took repeated attempts and a little negotiation on my part to convince her to try it with this rare opportunity. After all I have been taking advantage of credit card balance transfer and promotions for over a decade with no permanent impact to your credit score. Jonathan @ mymoneyblog had a nice summary of effects on credit score.

How Much Time Involved?
Here are some estimates of the time involved in this for each credit card promotion:
-20min to open the credit card online
-10min to perform two $500 transfers on Amazon Payments in Month 1
-10min to enroll account online and setup automatic payments
-10min to perform two $500 transfers on Amazon Payments in Month 2
-10min to perform two $500 transfers on Amazon Payments in Month 3
-30min to cancel the credit card before 1year anniversary to avoid annual fee
So it took about roughly 2 hours worth of work to earn each $500+ bonus, or effectively $250+/hr. I'm thinking this has to be close to some of the easiest money we have ever made or at least at a minimum one of the highest returns for time/life energy we've found.