All Forum Posts by: James Free

I'm interested in hearing people's opinions on the value of liquidity. For example, if you could choose between an investment that pays 8% annualized and can be liquidated in 48 hours with no penalty vs an investment that pays 12% annualized where liquidation is slow and has considerable cost (such as selling a property), which do you prefer?

Of course this is somewhat circumstantial, but if you're actively investing, you must have criteria, right?

Perhaps you have a threshold below which you won't commit your capital to an illiquid investment. Or perhaps the degree of illiquidity (6 month vs 5 year commitment) impacts that too?

When I use the BP calculators, I value my own money at 10%. I don't pretend that it's "interest free" if I can use my own cash for an acquisition, because it's not. It has opportunity cost! I also value cash return over equity gain, but not infinitely. I am investing for the long-term, so I don't need cash to spend, but I do prefer it for liquidity.

I'm interesting in hearing how other people balance these considerations.

It is true that calamity is likely to lead to lower mortgage rates, but it is not appropriate to celebrate calamities for doing so. 

There have been very harsh anti-landlord articles in the news over the years, and one of them actually quoted angry rants from the BP forums, using them to prop up the stereotype of the "greedy, evil landlord". BP was described as a place where we teach each other to screw over our tenants.

The next person looking to make us all look terrible might well use this thread to portray us as celebrating a pandemic. That's not a look we need.

Please consider the perspective of a person who's lost a family member to this disease.

Credit where credit is due: Mint emailed me about fixing the issue with closed accounts still trying to update, and it appears they're telling the truth.

When Mint.com guesses at the categorization of your expenses... 

The standard BP line is that slumlords are "bad landlords" and we should contrast with them. I agree to a point, but being in real estate has shown me that there's another aspect to it - one often reflected in this forum's threads on "bad tenant stories".

That aspect is: There are really bad tenants in this world. We can talk endlessly about screening, but you can't really protect yourself from them. I see tenant screening advice like "tour their previous residence to see how they live." Is that ever actually feasible?

Nope, sometimes you get someone who passes all the checks you're allowed to do (and we can do less and less with each new "non-discrimination" law) and still treats the property terribly. And even if you ARE a rockstar screener, those crummy tenants are still going to live somewhere.

And those owners, whose property they live in? They're slumlords. 

Slummy tenants guarantee the existence of slums. A landlord can do everything he can to rehab the property, and the tenants will trash it. He can fix it again, and they'll trash it again. They pay $800/month in rent and do $5,000/month in damage. The only way they don't do that damage is if the landlord never repairs the previous damage.

Ergo, slums.

We might enjoy sanctimoniously pointing our fingers at the poor suckers stuck in a lease with such people (or trying to evict them, but hamstrung by the laws in a terrible state). We might like to say "I like slumlords because I buy their properties cheap and fix them up!" But if you do that, you start by kicking out the awful tenants.

And then they go live somewhere else. So long as they exist, they live somewhere!

Slums are created by their residents more than their owners. We as a society have learned this in the past, but present-day politics want us to forget it. Brandon Turner talks about training your tenants. But there are a lot of terribly-trained ones out there, and many almost seem beyond saving.

You want to lament the existence of slums? I'm with you. But blaming the owners? Maybe learn a bit more about what's going on first.

Don't read too much into a sample-size of one. All it takes is one other applicant that the landlord prefers over you. The reason could be anything; might not even have anything to do with your numbers.

Maybe the landlord sensed that the other applicant would stay longer. Vacancy kills landlords, and good long-term tenants are worth their weight in gold.

I see plenty of posts on the forums where people talk about whether to accept tenants with poor credit or to fudge your own lease criteria for people with weaker credit (don't!). What I don't see as often is a good survey of what credit scores people are requiring for different classes of property and in different regions. 

If you own rentals, what is your region and tenant class, and what credit score requirement do you use to find good tenants?

I once had a divorcee with poor credit who wanted to rent for a year while she figured out what to do next. She understood that her credit was a problem and offered to resolve it by... 

...paying the entire year's rent up front.

I considered that level of risk acceptable.

I've been a big fan of Mint.com for years. It allows me to track everything I have, categorize, export, and graph. I can set budgets and goals. It has a smooth browser and smartphone experience. It syncs real-estate with zillow, updates my credit score, and even tracks the value of my car. It allows me to create and track progress against a monthly budget, or against savings goals. It allows for custom transaction categories and custom transaction tags, and you can save transaction classification rules so you don't have to edit recurring transactions manually. It consolidates data much better than any service I had previously seen, and its transaction export is moderately useful (useable, at least) for getting data into tax prep software or other business expense software (hint: custom tag for each property!).

Trouble is, Mint has been in decline for a while now. Two-factor's proliferation has been the main culprit - every day it wants me to re-enter a dozen security codes. This isn't really Mint's fault, and the security is good, but it really hurts the experience. But there are other problems. Mint keeps trying to update closed accounts, such as mortgages that were sold to other providers. Some accounts just fail to sync and grind forever. I've opened tickets with Mint's support people, but they've had no answers, and they tend to just drop the issues. Deleting accounts, as opposed to closing them, deletes all of their history, and there is no undo! It has also never supported the ability to edit historical balances. Want to tell it that your cash stash's value was wrong three months ago? Too bad!

As a software developer, I met some Intuit people at a recent conference, and they admitted (very off the record) that Mint is an afterthought at Intuit. I expect its decline to continue.

This has led me to search for a replacement. Quickbooks is a popular choice for business management, but it sucks for personal finance. No brokerage account or credit card syncing? That's... most of my personal financial activity right there. YNAB? Worst of both worlds. Quicken? Desktop software-only is a nonstarter. NerdWallet? Not even close.

The one obvious comparable to Mint, then, is Personal Capital. I built a profile in PC years ago but abandoned it for being inferior to Mint at the time. Since then, it seems to have improved. I particularly liked that I can add my wife as a second person and mark accounts as mine, hers, or joint. The reporting beats Mint, particularly the stock trending and comparisons. It handles two-factor and login retries more cleanly and unobtrusively than Mint does now. It has added Zillow integration for real-estate. You can now (FINALLY!) add a "manual account" for tracking things that aren't supported by PC, and it supports custom transaction categories.

However, there are some big reasons why I can't migrate from Mint to PC. The biggest one, a total dealbreaker, is that it doesn't allow for transaction import or manual transaction creation. At all. There is literally no way to migrate my years of history from Mint to PC. Unless I continue to update Mint, I'll have no long-term contiguous record of my transactions and balances. PC also doesn't track/show my credit score. Or my car (less of an issue). It doesn't have anything at all for budgeting. Simply signing up for PC subjects me to phone harassment from their investment advisors, who are desperate to get me to pay for financial advice (their business model). In short, PC is for stock investors to track their stock investing (and pay for advice on it). It's a niche, and it's not my niche.

Mint is still my best option, even as its quality declines. I may try to keep both Mint and PC updated going forward just in case things change, but I am frustrated by the lack of better options, even if I'm willing to pay for them.

Has anyone learned anything about this space that I'm missing?

Economists have correctly predicted ten of the last four recessions.