Affiliate Landlord: Hitting the Streets – Tour #3

April 11, 2015 Posted by Tyler Cruz

First, a very quick health update:

So, less than a week after posting that my health was much improved, I had a major relapse with my Meniere’s Disease and whatever the hell else is wrong with me.

I went to the doctor again and he’s a bit concerned, saying that there’s a bunch of "red flags", and he scheduled me to get an MRI of my head. I’m waiting to receive something in the mail to know when my MRI is actually scheduled for – if it’s too far down the road, my doctor will get me expedited for a CT scan instead.

I’ve recovered well over the past few days, but there are still definite problems with me.

Anyhow, enough of the depressing stuff…

New Blog Post Category: Income Properties

I’ve added a new post category to my blog: Income Properties.

All my appropriate past posts have already been moved over, and all future related posts will be categorized as such as well. You can view my posts by category on the right sidebar of my blog.

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The Third Tour

It’s been a while since my last physical tour of properties with my real estate agent. In fact, the last one was back on December 18th, 2014!

The market here, as I’ve said many times before, has just been a complete seller’s market lately and there’s been nothing half-decent to look at.

However, a very interesting property popped up a few days ago and I was pretty keen at looking at it, and so I made a list of 3 properties to go take a look at in person.

The Hospital 6-Plex

I wrote about this property a couple of posts ago, and I put it on my list of properties to look at as even though it didn’t cashflow with my numbers, it would cashflow if I managed it myself.

Unfortunately, it was just sold. I told you – seller’s market here.

To be honest though, I wasn’t all that disappointed. I mean, I was a little, but this place was always a bit ambitious for my first income property, and again – the numbers on it weren’t great.

I can’t wait to find out how much it sold for though…

I need it to drop again before I go take a look at it in person though

The School Duplex

I also wrote about this property in that same post.

So, I basically decided to look at this in person because I would only be interested in it if it was in superb condition, since it only cashflowed at $270 a month.

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So, the result? Well, let’s just say that there’s a reason why you need to look at places in person.

First off, the building itself is a lot older than I thought it was. Both sides had an ancient looking furnace which neither side used; they used small space heaters instead. That actually isn’t a horrible idea either, since both sides were even smaller than I had thought – and I already thought they were small to begin with!

I mean, the trailer I lived in for a while as a kid was bigger than each side I think.

The kitchen on the first side was in really bad shape too.

The second side was resided by a hoarder – my first experience seeing a hoarder property in person! However, the side was actually the better of the two if you erase the clutter from your mind.

The interesting thing about this property is that it has a very large, flat back yard that is completely unused (just grass), and it backs onto a lane which means that it would be a perfect candidate to build a carriage house on. Unfortunately, since it’s already a duplex, local zoning laws wouldn’t allow for this.

Since the property is in poor shape and doesn’t cashflow too well, this is now off my list.

The 2-House Property

So, this property was the main reason I requested another tour with my agent.

It’s a new listing, only going live on the market a few days before booking the viewing, and is an older property. In fact, I knew it was old before we went to look at it, but I didn’t really realize just quite exactly how old; I thought it might be 1950’s or 1940’s, but apparently it’s likely at least 1930’s. The official age is listed as ‘unknown’.

And the age really shows itself in the construction. It’s lath and plaster interior for one thing – which is pretty much the norm in older houses here, and I’ve never done any repair work on with that before, but that’s not the end of the world.

The "basement" is a separate entrance and only about 5.5 feet tall. It has a gas water heater and furnace, and the washer and dryer are there as well – which must absolutely suck when raining and snowing (I live in Canada remember). It’s not nice down there and you don’t want to be there for long. In fact, as we were leaving, the bottom frame of the door was so rotten that it basically moved and nearly disintegrated. This was likely due to there being no awning over it, but it gives some hint as to some of the building’s condition and age.

I guess I should mention now, that this listing is interesting because it actually contains 2 separate houses on the same lot. The house I mentioned so far was the main house (house #1), and there is a slightly smaller one in the back which is legal non-conforming house.

What this means, basically, is that the house was built prior to municipal zoning changes, and is therefore allowed to grandfather in older laws that allows it to be legal now. I couldn’t tear it down and rebuild a new house there, for example. However, my agent told me that there are some loopholes that investors use here; primarily that you’re allowed to rebuild up to 75% of it at once without it being considered an entire teardown. Then you do the other 25% later, heh. All legal and compliant.109[3]

So, this property is kind of unique in that it already has a carriage house in the back and is legal, making this a great investment property set-up.

Getting back to what I was saying earlier regarding the old condition of the main house, there are two more downsides.

First, it’s situated in front of an old highway, so there is some noise from that, and also means that the access to the properties is through a narrow back lane which is a little bit sketchy and awkward.

Secondly, the area itself is definitely one of the least desirable areas in my city. It’s pretty comparable to the Hobbit House – if you’re up-to-date with all the properties I’ve been looking at. It’s maybe a 5% – 10% better location than there.

Apart from all these negative things, the main house was otherwise in good condition it seemed. In fact, I was surprised how nice the bathroom was for a house of that age. It was obviously recently renovated. Both properties have newer roofs on them, and if they are fiberglass, my realtor says they should be good for another 18 years.

Both properties share a nice yard with some fruit trees, which is fully fenced and even split between the two properties. There’s even a single-car carport out back as well.

As a bonus, both properties actually have a half-decent ocean view; Google maps shows the distance to be only about 1200 feet from the ocean!

They both appear to be independently metered as well, and the tenants in the 2nd house have apparently been there for 4 years! That’ll cut my vacancy rates! In fact, I only put 7% in my numbers because of this. Even then, 7% is very conservative.

Here are all the numbers:

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As you can see, even after all my possible expenses are covered (save for one-time closing costs; I’ll be adding those into my equations soon), this property has great cashflow, coming in at $531.62/month.

That’s a 3.54% ROI for life, not factoring in equity gain (once it’s paid off, it’ll be 5.74% ROI for life for example) or appreciation.

If I pay it off early, not counting early payment penalty fees, which I could easily do with a few great months of affiliate marketing, even after all my safety padding expenses, I’d be netting $861.42 a month for life, again not factoring in any appreciated value/rent. As my realtor told me, "Rents will increase with inflation. Your borrowing cost will decrease with inflation".

It’s not $30,000 a month like you can make in affiliate marketing, but it’s also a very stable and dependable income I can expect each month, unlike affiliate marketing which is highly volatile and may only last one month.

So, on paper this property works. This is assuming $15K off the listing price, and not factoring in closing costs, but I’m also using a higher mortgage rate in my numbers.

I dunno. It’s old, and already in need of some repairs. Nothing major though. It’s not like the Oceanview Duplex that was sold before I had a chance to place a bid on – that property was in superb condition, no question, and cashflowed greatly. This one cashflows nicely, but is old.

Should I wait for something better to come around, or have I waited long enough? I’ve already been looking for around 8 months now…

What are your guys’ thoughts?

In my next post, which I’m going to start writing immediately after this one, I’ll be showing off some income property analysis tools I’ve been working on Smile

I will most likely publishing it in 48 hours, so keep an eye out for it.

Posted: April 11th, 2015 under Income Properties 2 Comments

Goodbye Comment Link Spammers

March 27, 2015 Posted by Tyler Cruz

Yes, I’m talking to you.

You know who you are.

Be sure to read carefully, as there should be no more incentive for you to leave comments on my blog anymore because as of yesterday, the Top Commentators list now has: rel=’external nofollow’  added to all of its links.

They are still links, and also now spawn in a new window, but they will now provide next to no benefit SEO-wise anymore. So, please stop leaving your spam comments on my blog as it will provide no benefit for you anymore. Move on and find another blog to do that.

Oh, and years back I already made all actual comments nofollow as well, so consider that as well Smile

For Everyone Else

Ever since adding a Top Commentators plugin to my blog many years ago (see screenshot below):

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…which shows a list of the most active commentators on the right side, I’ve received a lot of low-quality comments on my posts. You’ll probably know what I’m talking about… comments such as these:

w0w, great post Taylor!!!

or…:

very good you teach us how to be good affiliate marketers like yourself. you my hero

And of course straight out gems such as:

If it doesn’t Titleist 913 D3 Driver sell after a while, you can lower the price until you find a buyer. One hamper in Titleist AP2 714 Irons going this route Ralph Lauren Match Polos is before it is sold, it could sit for months or years. If you can find a consignment shop in a TaylorMade SLDR Driver busy area you may have good luck doing this.

I usually clean these comments out on older posts whenever I publish a new blog post, but by the time I do so, they’ve already been sitting on my latest post for a while making the place look a bit sleazy.

Chances are that even though I’ve now removed the SEO incentive to leave such comments, that some will still continue to do so. Such is the nature of the beast.

If, after a while, the spammers still don’t get the message, I’ll simply remove the Top Commentator’s plugin completely.

Posted: March 27th, 2015 under Blog Related 7 Comments

Megapost: Meniere’s, Weight Loss, Income Property, and Affiliate Marketing Updates

March 25, 2015 Posted by Tyler Cruz

Glen from ViperChill.com sent out a tweet that he had mentioned me in his latest blog post. Reading the post, it made me guilty for only posting once a month these days. Geez… is that really the post frequency I do now? I can remember back to the days when I would consistently post 3-4 times a week.

I guess what that’s what happens when you blog for literally a decade with over 1,000 blog posts – you tire out. It’s probably why so few bloggers exist today that existed back in 2004-2005.

Anyhow, I thought I’d publish this post and try to get you guys caught up-to-date with what’s been going on in my life both personally and "professionally".

Meniere’s Disease Update

So, it’s been about 7 weeks since I had my huge Vertigo drop attack and was diagnosed (more or less) with Meniere’s Disease. The 2-3 weeks after that attack, I was in really bad shape, with very blurred vision, constantly being dizzy and lightheaded, and really depressed. I blame about half of that due to the drug I was taking at the time.

I then was switched to different drugs and for the past couple of weeks I’ve been off medication completely. I’m now about 85-90% back to normal – I still get little bouts of vertigo here and there, but seem to be able to "fight it off" if I catch it early and concentrate really hard. It’s a bit difficult to explain, but it’s similar to fighting off a yawn but a lot tougher and more intense, and it will still come through a bit.

I’ve very slowly worked my way up to 5 days of badminton a week again, finally reintroducing the 4th and 5th days just this past week.

I’m trying hard to limit my sodium intake, which is supposedly helpful in managing Meniere’s – so that may be part of why I’m doing better.

While I can walk around fine now and use the computer again, there’s all these little things that I have to be careful with… anything from… angling my head at odd angles, looking at something that moves very fast, anything to do with motion such as taking an elevator, braking in the car quickly, etc.

Oh, here’s a GIF taken from Wikipedia’s Meniere’s Disease page. I can’t look in the mirror when I get my major attacks, but I believe my eyes probably do this too when I’m having an attack… only probably to a worsening degree. It sometimes happen in the middle of the night or when I’m trying to fall asleep too.

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Overall though, yeah, 85-90% back to normal Smile

Weight Loss… Again

For long-time readers of my blog, you don’t have to worry; I won’t be posting a new series of posts dedicated to my weight loss again. I know that those weren’t a hit, heh.

But I thought I’d share that I’ve been busy with weight loss again over the past few months. Why? Well, because the lifestyle of an internet entrepreneur is a very sedentary one, and I know that a lot of you are in the same fat boat.

So, over time, I regained all of what I lost from my last weight loss challenge and I decided to address it again before I gained even more.

This time, I decided to finally try calorie counting for the first time. I log my calories in a free and extremely popular app called MyFitnessPal, and basically eat whatever I want as long as it fits within my daily allotted amount of calories. Any exercise I do simply adds to the amount of calories I get to eat.

Calories in < calories out = weight loss. Simple. Proven. Effective.

I managed to lose 30 pounds in 86 days – just under 3 months:

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However, as you can see, I’ve plateaued over the past 3 weeks. Part of this is to be expected… after all the lower you go in weight, the harder it is to lose additional weight. Also, I lowered my weight loss rate from 1.5 pounds to 1 pound a week, which really slowed things down.

But more importantly, I noticed an interesting trend. Being the very statistic-oriented person I am, and taking some of my affiliate marketing campaign stat analysis, I noticed that I had been slacking a bit on staying within my quotas recently, which add up and stagnated any weight loss I would have had.

I started to very gradually revert to some of my old bad habits, such as allowing myself snack-sized bags of chips. Anyhow, I just made this realization while writing this post, so hopefully I can get back on track and continue to lose some more weight.

The following comparison photo is of me from the "before" shot which is 4 years old – taken from my last public weight loss challenge back on May 25th, 2011; I didn’t take one for this current weight loss since I wasn’t blogging about it.

The "after" shot was taken 7 weeks ago on Jan 28th (just 50 days after starting). Since then, I’ve actually lost an additional 10 pounds. I was just to lazy to take an updated photo Smile with tongue out

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A week and a half after taking the after photo, I went out and bought my very first set of weights! I’ve never lifted weights in my entire life outside of some short gym training thing back in high school, so I have a lot to learn.

Right now I’m keeping things very basic with dumbbell curls. I’m doing 10 curls each arm every 2nd day (alternating the other days with push-ups). I started at 13 pounds, then moved up to 18 (the bar itself is 3…) which was a huge jump for me and I really struggled after the 7th rep. But now, I’m finding them much more manageable and only have a little bit of trouble with the 10th rep.

Yes, I know, I’m weak Smile I’m not setting out to become the Hulk though. Just want to tone up slightly.

Anyhow, I recently discovered that they make weight plates at 1.25 lbs.! I currently have 2.5 lbs. plates as the lowest weights which means that I have to jump 5 pounds whenever I want to move up which is way too high of a jump. I’m going to buy 4 1.25 lbs. plates so that my next increase will be just 2.5 pounds, from 18 to 20.5.

From what I’ve read though, it’s difficult to find the 1.25 pound plates in stores, so I may have to order them online…

Oh, one more thing. On New Years Day (the last day of boxing week sale), I bought an exercise bike (50% off baby) – the first piece of exercise equipment I’ve ever purchased. So far, I’ve been pretty good with it, using it consistently around 3 times a week – typically on the days I don’t have badminton.

Here’s a photo of the bike and the weights. Can you tell I like black? Smile

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I have the bike setup to face the TV and I watch Netflix while using it. Perfect.

Income Property Updates

As mentioned in my last real estate update post, the market here has been completely dead for the past few months. Even though we’re into spring now, it’s simply a seller’s market, with only a handful of new listings meeting my criteria entering the market each month.

Nothing that comes on the market is a good opportunity, and it makes me lament about that absolute perfect oceanview duplex that I let fall through my fingers. Ugh…

There’s really only 3 new property updates worth noting:

Oceanview 4-Plex

There’s an oceanview 4-plex here that I wrote about before and is one of the properties with some potential that I’m keeping my eye on it.

It had a 40k drop which is a pretty substantial drop. It made it from breaking even in cashflow to netting $200 a month.

I need it to drop again before I go take a look at it in person though

The School Duplex

A small duplex located right across from an elementary school came on the market.

It nets $270 a month which is not horrible, but needs improving. If it drops in price, I’ll take a look at this in person too. Here’s a photo:

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The Hospital 6-Plex

When this came on the market, I was very excited. A multi-unit building with common areas is something that is right up my alley. It can give me some more hands-on things to do if I want, and gives me more opportunities to increase value.

Located right across from the hospital, this 6-plex even has a fair bit of land, including individual storage space and even a 6-car carport with ample space.

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However… this place actually comes in at a negative cashflow of –$200 a month!

It’s interesting… because I did some research and the only other 6-plex on the market here is actually with the same realtor, priced nearly the same, and also cashflows negatively at $200 a month. I did some research, and the owners of each building appear to be different people, so I’m wondering if the local market is dictating their price or the realtor is putting his 2 cents in. Perhaps both…

This property needs to have a significant drop in order for me to take a look in person and consider placing an offer on it.

I should mention that taking a look at the rent roll here, that there are a lot of long-term residents, which means that I could probably adjust my vacancy rate from 10% down to 5% or lower. The rents here are pretty low so I either drop my vacancy adjustments or I raise the rents over time.

If I halve the vacancy rate, manage the property myself, and the place drops by $60,000, then it’d cashflow half-decently at around $600 a month… but then I’d also be managing it for only $600 a month and that’s not worth it.

Hmm… I just took a look at the actual unit rent history, and it’s actually far less than 5% even. I don’t know the exact % because I can only see when they were each last rented out, not how long they sat vacant, but it’s certainly less than 3%. If I put 3% which is fairly conservative, then it actually makes $50 a month at the current price (with a reasonable purchase price reduction). If it drops by $50,000, then it’d cashflow at $250~ month… without me having to manage it. $600+/month if I managed it myself.

The interesting thing is that I just also just finished running the numbers if I raised rents a bit to keep them more in line with the local rates here, although still at a pretty good price, and kept vacancy rates the same at 10%, and it actually worked out to be about the same cashflow, so it would actually make sense to keep the existing tenants in place then.

Bah, now I’m just trying to make the numbers work… the place would have to drop by $100,000 for it to make any sense for me.

I guess I just keep waiting and looking… it’s been 8 months since I started though so I’m beginning to get impatient…

Affiliate Marketing

Remember affiliate marketing? I barely do. I’ve barely touched my campaigns ever since I had my biggest vertigo attack back on January 31st, 2015.

I ran some very small basic campaigns here and there and created a new landing page, but that’s about it.

Slacking at Work

A big part of the reason why I’ve barely been working the past few months is because I’ve been so tired all the time. I’m not sure how much of it is Meniere’s related (it shouldn’t really have an effect on energy) or general health related, but I think that part of it could be due to my weight loss efforts.

Losing weight is time consuming. Especially counting calories – exercise aside, logging and counting calories requires me to log every single thing I eat and drink… and I log absolutely every calorie. And since I’m trying to limit my sodium for my Meniere’s, I also keep a close eye on that as well.

Then factor in the fact that I’m not eating out as much as I used to and prepare a lot of my own meals and snacks, and you can see how I’m finding it difficult to work like I used to.

But I can’t blame weight loss and health for everything – I think that I’m really just drained from working online for 10-11 years. I still love it… but I’m also tired of it. What I hate the most is the constant learning and adapting. Once you finally learn something, it becomes outdated and you have to learn something else.

This is partly why I’m so interested in owning some income property. It will give my eyes some rest from the computer and it also doesn’t evolve as quickly as the Internet does.

I do have some plans on how I can refocus back on my online work though. It will take a couple months to get back to the stage where I’m working diligently again though, assuming I follow through on my plan.

Anyhow, there you have it – an update on my life both personal and work related.

Posted: March 25th, 2015 under Income Properties 4 Comments

Affiliate Marketing Income Report: November 2014

February 23, 2015 Posted by Tyler Cruz

With my health slowly improving and in a continued effort to try to get "back on track", I thought I’d go ahead and post another affiliate marketing income report.

November 2014 was an interesting month because it kind of caught me by surprise and actually ended up being my 2nd highest profiting month since June 2013!

As usual, I’ll discuss more details as this report goes on, but it’s nice to know that I still have some good months in me here and there. If I get 2 months like this back-to-back, for example, that’s roughly enough down payment for another investment property (albeit a cheap one)!

Anyhow, here’s how November ended up performing:

November 2014 Affiliate Campaign Income:

$40,842.32

Affiliate Network Breakdown:

  • Affiliate Network #1: $40,842.32

(This includes conversion from foreign currencies to USD)

It’s a little rare for me to use only one network, but I really wasn’t seeing too much action in terms of new offers around this season… perhaps the advertiser’s running out of their yearly budget early or something?

Expenses:

$23,018.80


Traffic Source Breakdown:

  • Traffic Source #1: $10,337.89
  • Traffic Source #2: $2.12
  • Traffic Source #3: $953.05
  • Traffic Source #4: $11,484.08
  • Traffic Source #5: $58.11
  • Traffic Source #6: $183.55

    In November, I continued to work on mobile on a primary mobile source I started using 1-2 months prior, and scaled the volume up. I also started a new mobile traffic source that my affiliate manager recommended to me, which you’ll see me really scale up the next month.

Net Profit:

$17,823.52

Nice! I have to admit, ending the month nearly 18K up felt nice. The last time I made that much was back in June, so it did give me a morale boost. It ended up working out to a 77% ROI.

2014 Affiliate Marketing Results

First, here’s a recap of how 2013 fared for the entire year:

Year Gross Expense Net ROI
2013 $823,884.01 $555,024.33 $258,859.68 46%
Total: $823,884.01 $555,024.33 $258,859.68 46%
Monthly Average: $68,657.00 $47,085.36 $21,571.64 46%

And here’s a monthly breakdown of 2014 so far:

Month Gross Expense Net ROI
January 2014 $10,922.80 $8,908.47 $2,014.33 23%
February 2014 $25,941.97 $15,900.52 $10,041.45 63%
March 2014 $24,202.06 $15,408.95 $8,793.11 57%
April 2014 $3,486.55 $3,150.00 $336.55 11%
May 2014 $57,015.00 $38,765.01 $18,249.99 47%
June 2014 $60,753.58 $43,095.35 $17,658.23 41%
July 2014 $50,162.81 $37,073.59 $13,089.22 35%
August 2014 $27,317.35 $21,291.31 $6,026.04 28%
September 2014 $29,935.71 $22,872.08 $7,063.63 31%
October 2014 $44,811.48 $35,625.55 $9,185.93 26%
November 2014 $40,842.32 $23,018.8 $17,823.52 77%
Total: $375,391.63 $265,109.63 $110,282.00 42%
Monthly Average: $34,126.51 $24,100.88 $10,025.64 42%

November’s great performance increased my monthly net average in 2014 up to $10K a month!

The Larger Picture: 23-Month Analysis

Below are my overall numbers from my campaigns since I started recording them in January 2013:

January 2013 to November 2014 Gross Expense Net ROI
23-Month Total: $1,199,275.64 $830,133.96 $369,141.68 44%
Monthly Average: $52,142.42 $36,092.78 $16,049.64 44%

After close to 2 years of recording my affiliate marketing numbers, my monthly average sits at $16,000 profit a month! Geez, that’s really only sinking in now as I write that… because I’ve had some insanely really bad months lately (hint! hint!), and with months like April 2014 and January 2014 I sometimes forget that overall I’m still doing pretty well!

November Recap

As mentioned earlier, I really pushed mobile hard in November. I still ran web on the side, but mobile made up for probably around 60% of my profits. I split test a lot of mobile offers and spent a lot of time (and money) trying to work out a "sweet spot" at the mobile traffic network where I could maximize the net profit by balancing out my bids and my ROI’s.

I only tested one mobile landing page which did not do well, despite giving it more than its fair chance. I’m a complete newbie when it comes to mobile landing pages, so it may be a while before I find out what works and what doesn’t.

If I remember correctly (November was a while ago after all…), I had some really annoying server issues around this time as well since I was doing so much volume in mobile. CPVLab and my server were going a bit bonkers and I had to spend way too much time trying to manage all of that.

Charles Ngo strongly recommended to me that I switch from CPVLab to Voluum, and I gave it some thought, but I ended up deciding to stick with CPVLab (for now at least).

To to recap, November = mobile = $$$ Smile

December Plans and Predictions

Normally in this section I list the plans I have for the upcoming month as well as predict how I think the month will fare profit-wise. However, since December has already come and gone, I will be skipping this section in this report since I already know how it went.

I’ll have December’s report up in the not-too-distant future, so hang tight.

Posted: February 23rd, 2015 under Affiliate Marketing 22 Comments