Tumbleweed Tiny House Company

I am still waiting for some additional repairs to be completed in my rental property from last year before I talk about the financials of that investment. However,  there is another investment that I would like to talk about. Early in this year, perhaps chewing off too much, I also explored an investment in a tiny home hotel in Austin, Texas through Tumbleweed Tiny House Company. The model is that Tumbleweed builds a custom tiny home for you as an investment and you are guaranteed with a lease from a separate lessor. That lessor also manages the property as a vacation rental. The numbers seemed very promising in their pro-forma so I went down the road of trying to buy a home. If you are ready for a cautionary tale, here’s what happened (quoted from my BBB complaint)….

An investor and I placed a large refundable deposit on a Tumbleweed Tiny House on March 13, 2017 for a tiny home hotel opportunity in Austin, Texas. We based our investment on the lease terms and loan terms advertised by Tumbleweed. The deposit and sale were clearly specified to be contingent on mutually agreeable lease terms with the lessor as well as financing at a rate of 5% of less.

Approximately 2 weeks after placing the deposit, we finally received the lease terms and they were significantly different from what was advertised. A projected return of positive 30% went to negative 37%. In addition, Tumbleweed was not able to secure a loan for the other investor and me. As a result, we requested that Tumbleweed resolve these items so that we could get the advertised lease and financing.

After discussing with Tumbleweed, on April 5, 2017, it became apparent that we would not be able to get the lease and loan to work. As a result, I requested and was approved for a full refund of our initial deposit on that day.

It is now May 10, 2017 and we still have not received a refund. In fact, we have been told that Tumbleweed cannot even provide a timeframe on when we could expect to receive a refund. The Director of Sales is in charge of the refund and she will not even take my calls unless I call from other phone numbers. Every time I have talked to her, she has promised to call me back later in the day with a firm date that I would receive the refund. Not once has she ever called me back or called me at all. Over a month out, I still do not have a refund or even any timeframe on when I could expect one.

Tumbleweed has effectively stolen my money. I have no idea if or when they intend to send me a refund. I never met any of the individuals at Tumbleweed or saw any of their products. At this point, I am very concerned this entire operation is a fraud.

Obviously this is a terrible story for myself and my investing partner. All we want is our money back. My learning experience from this is, do not trust a company with even a deposit until you are absolutely confident in both the investment and the company. While I still think there is money to be made in the tiny home space, take it from me and do not trust Tumbleweed Tiny House company with your money. They cannot be taken at their word. I do not know if this is a fraud, but if there is a legal case or criminal complaint – I will share that information as I am legally allowed to.

By the way, I was completely open with Tumbleweed that I would be filing a BBB complaint and taking further action if they didn’t get back to me by today. Not only did they not contact me since, they wouldn’t even take my call today. They are a great example of poor business management (or excellent fraud management, I suppose).

Knight Investor Returns!

Happy Easter everyone!

Firstly, I owe a big apology to blog readers for being MIA for so long. In August I advised I was going to focus on making a real estate deal happen, which it did! In December I closed on a triplex rental property. I have been wanting to do a post breaking down the costs and expected return on this house. I will do this, however unfortunately there were some unforeseen repairs I needed to make to the house to bring it up to code. I should have it all worked out in the next 2-3 weeks and I wanted to wait until that point to make a post on the property. That way, when I do make the post, you can see some semi-final numbers and I should have a solid ROI worked out.

Thanks for tuning in and I hope to share the details on my real estate deal in the coming weeks!

Apple’s Undervaluation Brought To Light After 2016 Q3 Earnings

Apple (AAPL) announced its third quarter (Q3) results on Tuesday and largely beat expectations. Some key points:

  • Quarterly Revenue: $42.4 billion (beat by $310 million)
  • Quarterly Net Income $7.8 billion
  • Diluted Quarterly EPS: $1.42 (beat by $.04)
  • Gross Margin: 38%
  • $.57/share dividend declared (yield is currently 2.34%)
  • Service revenue grew 19% year-over-year. It now represents 11% of Apple’s revenue (up from 8%).

A flood of positive sentiment and articles came out almost immediately after Apple’s earnings release. Apple stock closed up 6.5% yesterday, which is great because I think the company is undervalued. That said, I initially thought the market reaction was abnormally bullish based on Apple’s only moderate beats, in my opinion. In reality, the beat was simply a wake up call to bearish investors who had allowed a temporary decline in Apple’s growth to rule the stock price.

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Opening a Brokerage Account

Before you can start buying stocks, you need to open a brokerage account. For some, that concept may sound foreign or complex – but it’s not and today I am going to discuss how to get started. There are two core ways to invest your money: self-directed or managed. When I say self-directed, I mean that you have 100% control over your brokerage account. You choose the stocks/bonds/etc. to invest in yourself. Managed money is when you have a professional broker or robo-advisor choose your investments for you. Your investment portfolio becomes hands-off. We’ll talk about managed money and robo-advisors more in a future article. Continue reading

Managing and Budgeting Your Money in the Digital Age

In my emergency fund article last week, I referenced the greek phrase know thyself mostly in context. Well to expand our conception of Greek philosophical sayings, I now declare that to truly know thyself you must also know thy finances. Luckily we are living in 2016 and understanding your financial position has never been easier. You don’t need to be an accountant or financial advisor to understand the basics of where you are at financially. And that’s a good thing because understanding your finances is absolutely necessary to budget, save, and spend your money appropriately.

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General Motors and the Future of the Car Industry

The Auto Industry

Let me start off by saying that my research into the car industry is some of the most difficult investment research I have ever done. There are so many critical factors affecting the industry and its future right now that it is just flat-out hard to get a grasp on. Since the recession and GM’s old demise, the car industry has rebounded nicely. Continue reading

Apple and Skyworks Solutions: Cheap Enough to Buy?

Now that we’ve covered stock valuation for beginners, this is the first [exciting] edition of Stock Analysis Thursday where I will discuss stocks that I have done research on, usually in the same sector. As an FYI, I will tend to be bullish on the stocks I discuss. The reason why is that I will be sharing the research that I’ve already done for my own personal investments. When I come across a deal-breaker characteristic of a stock, I often stop and do not complete my full research into that stock. As a result, I cannot discuss those stocks. That said, in the future for the purpose of this site, I will attempt to complete my research into any stocks I look into and thus there will be some bearish articles too. Enough said, let’s begin. Continue reading

How to Begin Valuing Individuals Stocks

As we start our discussion about stocks, I want to begin by saying that most people should not be investing in individual stocks.  Beating the market is ultimately a fool’s game. Not even most hedge funds can beat the market after fees. Take a look at Warren Buffet’s million dollar bet that over ten years he could outperform a “high-powered hedge fund” team by simply investing in a market fund (VFINX, a Vanguard mutual fund that tracks the S&P 500). The bet is almost over and his investment is up 65.7% compared to 21.9% for the hedge fund folks. That’s a single instance, sure, but the large majority of regular investors lose to the market and that’s the truth.

So if individual stock investing is a fool’s game, why would anyone do it? Well after you secure the funds you need for your future in well-diversified market-tracking investments (more on that in a future article), investing in individual stocks can be a great “game” with your excess savings. If you’re young, that game may end up paying well if you happen to buy into the next Amazon or Apple. And just like any game, if you spend time practicing, you may get good at it! And then, perhaps, you can count yourself in the small minority of market-beaters.

Onto valuation. Continue reading