All righty…income report time. In September I slowed down a lot. I didn’t push out much new content. No new case study. I didn’t replay my webinar. We didn’t even capture new credit card bonuses. More on why in a moment.
It’s hard to see a month go by with little progress. But the great thing about passive income is you can take a break for a month when stuff comes up and income still rolls in. It’s nice to have a cushion, but I need to get back on it in October!
Let’s start with our results: In September, I booked revenue of $3,863, up +85% year over year.
Some healthy YoY growth. Let’s see what happened in September and what’s on deck next. End of September also means it’s the end of the quarter, so it’s time to set new quarterly goals for the rest of the year!
What progress did I make?
1. Spent the month looking for real estate
The reason progress on HYW paused in September is because I spent most of my time looking for, analyzing, and bidding on real estate. I started or submitted offers on 5 properties: 3 single family homes and 2 multi-family complexes. Two were out of state; three in the Bay Area.
Why am I looking for real estate?
One major reason is because we want to invest some cash into a new hard asset. The rent would increase our passive income, further diversifying our overall income away from our day jobs. (Note: I only report online income, not rental income, in these income reports.)
Another key reason is that we are looking for a new place to live. Currently we rent an apartment. It’s cool and all, but our space isn’t large enough for us to grow into, especially if we start a family.
We live far from our respective workplaces (we live in the middle and head in opposite directions to work each morning). It’s worse for Kelly because she braves highway traffic each day, while I ride the train. At least on the train I can often get a seat and get some work done (I’m typing this on the train right now).
So in September I spent all my free time analyzing and bidding on properties. Yet over the course of the month, we reprioritized our investing goals. Rather than purely financial return, finding a new place to live is now the primary goal.
Early on, we simply searched for the most attractive assets in terms of financial return, whether local or out of town (or even out of state). I searched far and wide for properties in Southern California, Houston, Austin, Chicago, Philly, Atlanta, Cleveland, Vegas, Durham, the tri-state area, and DC Metro, among others.
My thesis was to invest near major research universities because big wealthy research universities tend to have clout, and aren’t afraid to exercise it, in preserving safety and upkeep (and hence property values) of the surrounding community. After all, schools have to make it safe for students and appealing for faculty to maintain their rankings (and government grant dollars).
While I still think this is a good investing thesis, our primary goal is now finding a new place to live. So in late September, I stopped searching for out of town properties and focused back on the Bay Area.
Our plan is to move closer to Kelly’s workplace (so she doesn’t have to drive as far) while still being able to rent out part of the property to generate passive income. To this end, we’re focusing on small multi-family properties in the South Bay so we can house hack.
Finding deals is the biggest challenge. As many Bay Area buyers will tell you, simply looking on the MLS won’t generate many leads. So we’re also looking across specialty and foreclosure auction websites, asking landlords on rental websites whether they’re open to selling instead, cold-emailing landlords from public records lookups, and doing drive-by prospecting for dilapidated multi-families that sit in fundamentally good neighborhoods.
It’s hard work but it’s my top near-term goal right now. It’ll be an ongoing search over the coming months until we find the right property, and I’ll share thoughts on it here from time to time.
2. Twitter followers: 658
We continue to use our same strategy (selectively targeting and automating follows / unfollows) to grow our Twitter following. We’re up to 658 as of this writing.
3. Credit card bonuses: got declined for the Sapphire Reserve due to 5/24 rule 🙁
Last month I wrote about Chase’s new mother-of-all-credit-cards: the Sapphire Reserve.
While it has a high $450 annual fee, it has a 100k point sign up bonus, $300 annual travel credit, 3x points on restaurants and travel, and a ton of other bennies. Kelly got one and I applied for one, too.
But I also wrote last month that Chase has this rule: if you have applied for 5 or more credit cards in the past 24 months, regardless of the card issuer, you’ll be rejected for new Chase credit cards.
Yup, that was me.
Some bloggers reported success bypassing the 5/24 rule by actually walking into a Chase bank branch to apply in person. So I did that. But apparently, I was too late: Chase shut down that loophole a couple days before I walked into my local branch.
If you have been a Chase Private Client for a while (requires depositing $250k minimum with Chase) and the credit officer evaluates your application and determines you have a profitable relationship with Chase, they will pronbably make an exception and give you the card even if you violate the 5/24 rule. However, don’t bother trying to go set up a Private Client account just to get the Sapphire Reserve: bloggers have reported doing this and all of them have reported getting rejected.
Lastly, calling the reconsideration line won’t help. It’s a strict rule. I called, pleaded my case, offered to shift around my credit lines…but no dice. They told me the soonest I could get the card is end of next year. Ouch!
Even worse, Chase has now expanded the 5/24 rule to include some of the better co-branded cards (previously exempted), like the United MileagePlus Explorer card (both personal and business versions).
The cards restricted by the 5/24 rule are:
- Chase Slate
- Chase Freedom
- Chase Freedom Unlimited
- Chase Sapphire Preferred
- Chase Sapphire Reserve
- Chase Ink Cash (Business)
- Chase Ink Plus (Business)
- Chase United MileagePlus Explorer
- Chase United Club
- Chase United MileagePlus Explorer Business
- Chase Marriott
- Chase Southwest Plus
- Chase Southwest Premier
- Chase Southwest Premier Business
Cards NOT affected by the rule (so far) are:
- Chase IHG
- Chase Hyatt
- Chase Fairmont
- Chase Ritz-Carlton
- Chase Marriott Business
- Chase British Airways
- Chase Disney Rewards
- Chase Disney Premier
- Chase Amazon
- Chase AARP
So, it’s been like a 1-2-3 knockout punch: No bank branch approval. No Private Client workaround. No reconsideration line.
At least Kelly got the Reserve and will get good mileage out of it. As for me, there aren’t any other especially compelling cards that I know of and haven’t gotten already. So I’ll probably take a bit of a break and slowly start cancelling cards to “reset” their clocks to re-apply for them again after their statute of limitations expires.
1. Continue to search for real estate
This will continue to be a priority for me over the coming months, but it’ll probably be a slow burn to find the right property.
I’m looking opportunistically, especially because there are indications we may be headed into a real estate downturn: rents in SF, San Jose, New York City, and a few other ultra-expensive markets topped out and finally declined year over year in Q3, after more than 6 straight years of punishing increases.
As well, there are voter-petitioned rent control measures that have made it onto the November ballot in several cities we’d consider investing in, so we want to see how those measures get voted on before making any big moves.
This caution is counter-balanced, of course, by the fact that mortgage interest rates are still currently at all-time lows. Once they rise, we probably won’t see rates this low again for a long while. So it’s an important goal for us to lock in financing at or near current rates to keep our cost of capital low. The Fed is widely expected to raise the target fed funds rate by the end of the year, and that could put upward pressure on mortgage rates sooner or later.
2. New case study on tax-efficient portfolio liquidation strategies
I’ve been working an some interesting analyses related to tax-efficient portfolio liquidation strategies, and I plan to push out a case study on the topic in October.
Any topics you’re interested in seeing in the future? Leave a comment below and let me know! If several peeps mention the same topic, I’ll write about it next.
3. Grow traffic
And of course, I still need to dedicate quality time to growth hacking to drive more email sign ups. We’ve seen steady organic growth in the past couple months and are starting to clear some important traffic thresholds (based on what Google Analytics tells us). I need to double down and crank up our traffic engine even more.
Q3 look-back, Q4 goals
That wraps up Q3, and here’s a look-back on what we accomplished over the quarter.
In Q3, I set these goals:
- Get 500 email subscribers. Not achieved. Organic email sign ups have definitely accelerated since last quarter, but I didn’t do enough to drive email sign ups proactively. I want to carve out dedicated time for it in Q4.
- Pilot webinar. Partially achieved. I launched the webinar in August and wanted to do a replay in September but got busy with real estate investing, so I fell short there. I plan to do a replay in October.
- At least 2 new case studies, 3 income reports. Partially achieved. I ended up only doing 1 case study, womp womp. I plan to recoup with 3 this quarter.
- 800 Twitter followers. Not achieved. We got to 658 followers.
- 150 Facebook fan page likes. Not achieved. We’re holding steady at 114, but I didn’t invest any effort into this in Q3.
- SEO link building. Not achieved. I didn’t make much progress on this in Q3 beyond cross-posting relevant HYW links by commenting on numerous other blogs, which helped drive some direct traffic from those forums.
- Product validation. Partially achieved. I didn’t get all the way to researching / validating a potential product, but I do have an “office hours” service now set up to provide coaching on personal finance, goal-setting, tax strategies, etc.
As you can see, we fell short on several goals, but we still also made progress on several others as well.
What’s on my radar for Q4?
- Invest in a multi-family property. I give this one a 50-50 chance, as prices are still insanely high in the Bay Area and rental indicators suggest we may be heading into a real estate downturn soon.
- Get 500 email subscribers. I’ll experiment with a few new list building techniques but I’ll keep this goal the same for now.
- Replay webinar in November, sell 4 personal finance coaching slots. The goal is to test a shorter webinar format and experiment with monetizing the webinar.
- Publish 3 new case studies, 3 income reports. Leave a comment below to let me know if there are specific topics you’d like me to write about!
- Reach 1,000 Twitter followers. Breaking 1k will be an important milestone.
That about wraps up September and Q3!
What about you? What are your goals for the rest of the year? Leave a comment below and let me know!