Measuring Water Usage in a Multifamily Building

If you own a multifamily investment property which you are renting out to 2 or more tenants, you’ll probably be disappointed to find out that there’s only one water meter (provided by the city) to the entire building located underground under the sidewalk. Following are some scenarios on how water pipes reach each unit and how to possibly measure each unit’s water usage.

Separate cold water pipes

Even though there’s only one water meter under the sidewalk, it’s possible that the downstream water pipe after the meter branches into multiple pipes, one for each unit, thereby creating multiple cold water networks If this is the case, then you’re in luck and you can install a water meter, e.g. Badger Model 25 or Neptune T-10 at each branching water pipe.

Shared cold water pipes, separate hot water pipes

If the cold water pipes from the city’s water meter go to all units in a shared manner, then it would be very difficult to measure water usage by unit. However, if each unit has its own hot water pipes that are not shared with other units, which would be the case if each unit has its own hot water heater, then you can measure hot water usage by installing a water meter at the cold water inlet to or the hot water outlet from the water heater.

Billing each unit for water

Usually there will be one water bill for a multifamily property. Since there are multiple tenants, you’d need to fairly split the bill among them based on each unit’s water usage.

Based on headcount

If both hot and cold water are shared among all units, then one common method is to bill each unit proportionally based on headcount (number of occupants). If one unit has twice as many people living in it as another, then that unit would pay twice as much for water. Of course, headcount can change over time so this would need to be updated whenever there is a change.

Based on hot water usage

If cold water is shared but hot water is separate, then you can split the water bill proportionally based on hot water usage. This would be more accurate that going based on headcount.

Water meters

Following are some popular water meters for residential use.

Badger Model 25

This meter has plastic threads and costs about $100.

Buy online – RC Worst

Buy online – QC Supply

Neptune T-10

This meter has metal threads and costs about $100.

Buy online

Smart Water Meters

The water meters above are manual read meters. To measure water usage remotely and see usage over time, you can buy a smart water meter. One of the best ones is Flume 2.

Flume 2 Smart Home Water Monitor

This smart water meter does not require plumbing as it is just attached or strapped around a compatible water meter. It costs $200.

Buy online

The Flume water monitor just straps onto an inline water meter. It reads the magnetic field generated by your water meter, which the company says can detect any water usage all the way down to one one-hundredth of a gallon — i.e. a slowly dripping faucet.

Recessions, Home Prices, Unemployment and Inflation

When an economic recession occurs, one thing that happens for sure is the unemployment rate goes up. You can see a graph of the California unemployment rate since 1967 on the St. Louis Federal Reserve Bank’s website. Below is a copy of that graph until 2019-01-01.

The shaded areas indicate a recession. As you can see, the unemployment rate has jumped up during each recession. Logically, as unemployment goes up, incomes go down since fewer people are working. Following is the graph of real median household income in California over the years.

So how do you know when a recession will occur. It turns out that the best indicator of a recession is when the Treasury Yield Curve inverts.

Continue reading Recessions, Home Prices, Unemployment and Inflation

How to Price Work in Other Countries

I occasionally use Upwork (formerly eLance) to hire contract workers in other countries to work on some projects. Considering that I live in the San Francisco Bay Area, which happens to be one of the most expensive places to live, I have to constantly remind myself to price my projects according to the economy and cost-of-living where I hire workers overseas. Here’s an example cost analysis.

US Cost
Let’s say that, based on the type of work you need done, a fair US wage would be $10 per hour. Let’s also say that you expect the work should be done in no more than 17.5 hours. Therefore, the total project cost in the US would be $175.

Target Country
Let’s say you hire someone in Egypt to do the work. You’ll need a way to fairly and reasonably convert wages in the US to wages in Egypt. One way to do this is by comparing each countries GPD per capita, which is an estimate of the average salary in a particular country.

GDP Per Capita
According to the World Bank, as of July 6, 2018, the GDP per capitas of the US and Egypt are:

  • 2018 US GDP per capita = ~ $60,000
  • 2018 Egypt GDP per capita = ~ $3,000

In other words, the average annual salary in the US and Egypt are $60k and $3K, respectively.

Continue reading How to Price Work in Other Countries

Invest in Real Estate or Stock Market

Average rate of return:

ROI based on own money or borrowed money:

  • If you invest $100,000 in stocks, with a 10% ROI, you’ll get $10,000 at the end of year 1.
  • If you invest $100,000 in real estate (20% of a $500,000 house), with a 10% ROI, you get $50,000. Your ROI is based on a lot of money you’ve borrowed from the bank, not just the initial deposit.

Of course, you can also borrow $500,000 and dump it all into buying stocks but

  1. no one will lend you $500,000 to invest in stocks
  2. stocks are volatile and investing in them is more risky
Continue reading Invest in Real Estate or Stock Market

How to Find and Research (Pre) Foreclosure Houses / Properties

This information applies to properties in California (specifically, Alameda County).

When a bank begins the foreclosure process, they must file a Notice of Default with the county clerk. You can search for all notices of default within a time period in a county by going the county clerk’s website. For Alameda county, that would be

clerk1 Continue reading How to Find and Research (Pre) Foreclosure Houses / Properties

Electronics and Plastic Moulding Outsourcing in China

Last year I backed a Kickstarter project called Lima. This project is an electronic gadget that lets you connect multiple external hard drives via USB to it and allows you to access all files on all drives from any device over wi-fi in your home. The device includes an electronic circuit board, and plastic case, some USB sockets, and some cables. The project members recently released a blog post describing their outsourced manufacturing process and experience in China and I found it to be quite useful so I am linking to it here.

Doing Business in China

China Blogs

Founder Equity Issues