Welcome to Chez Cliff!

Today I’ll share with you a couple of things I enjoy doing.

There is sound.  And before I forget, please click on the ad at the very end.

Enjoy and have a great weekend!

I’m trying to get something posted to my blog and it’s going really slow.

Please check back shortly.

Thanks!

Yes Virginia, there is a Santa Claus.

The Grass Gods shined down on me.  Look!  I have grass!

Do a little dance,
Make a little love,
Get down tonight!

Actually I have a grass.

One blade of grass.  Running barefoot is not an option.

I call him Herb.  That’s French for grass.  TileGuy snickered at this one!

It only took a $10 bag of grass seed and enough water to turn half the Sahara Desert into a swamp.  But he’s there!

I won’t let TileGuy smoke Herb.  Nope.  Disgruntled Worker and the neighbor kid are not allowed to steal Herb.  I will smite them or something.

Ken asks:  Cliff, I’m confused.  Please explain why you are refinancing just before you sell.  Is it due to the 1031 exchange?

The reasons behind doing the refinancing right now were never fully explained.

Right now, there are two loans.  There is the regular mortgage on the house
and the HELOC, which was used to finance the renovation of the houses. Now, the mortgage
payment is locked in at a certain interest rate for a certain period of time.  HELOCs are
not.  A thirty day notice can either increase or decrease the interest rate on the HELOC.

As a recovering Engineer, my credo is "Hope for the best, plan for the worst."

For this situation, the worst case scenario would be if the houses did not sell.  The bubble burst people got their wish and the market crashes by 10%.  With that, Disgruntled Worker and I have to hold onto the houses for a year or so. 

To top it off, the mustache twirlers at my bank decide to purchase that "house in the Hamptons" after all.  They pen a letter, announcing their intentions on raising the interest rate on the HELOC by two or three percentage points.

This is where refinancing offers protection.  By refinancing, the HELOC is being pulled into the mortgage payment.  This will help preserve the cashflow, in case the "house in the Hamptons" scenario comes true.

If this has an ancillary benefit of helping in the 1031 exchange, I don’t know what that would be.

Good Stuff.

Yesterday, my sadness grew as I realized another day was going to pass without anything being done.  The appraiser has yet to call, even though promises of a phone call were given.  Usually no phone calls mean nothing is getting done. 

I’m impatient that way.  And I’m hoping this is a trait I share with my fellow capitalists. 

With nothing from the appraiser, the refi can’t be completed and the houses won’t go on the market.

There was a package on the floor, which I promptly opened.  Lo and behold it was the first round of my refi.  It’s already in the processing stages.

I’m glad something is getting done.

It looks like about 60% of my HELOC is going to get wrapped up back into the mortgage. This should increase my cashflow about $200/month.  That is very much welcomed.  I’d rather keep my money than spend it.