Options Trading Question

I was explaining option trading to a friend and came up with a question that I don't know the answer to. Perhaps someone out there can help me.The question concerns how dividends are handled in an option contract. Suppose it is now March and I write a covered call with a May expiration. In April, the stock pays a dividend. In May, the option is in the money and is exercised. Who keeps the dividend? It was paid to me in April, since I held the stock...

Property Management Set Up For Rental #1

My first choice for property management did not work out, so I've signed up with another property management company. The terms are almost identical to what I had planned on with my first choice: the monthly fee is 10% of the monthly rent, there is no fee when the property is empty, and when a new tenant is put in place, there is a charge of 75% of the first month's rent. The only difference between my original PM choice is that the new tenant fee...

Tenant Complaints

My first rent checks from Tulsa were actually two money orders. Before I deposited them, I noticed that the names on them were not the same as the name on the lease. Hmm.. That's not good. So I asked my property-manager-to-be to have these people sign an addendum to the lease showing they were living there as well. This is mainly for legal reasons in case I need to evict them or take other action against the tenants. They did sign, but of course,...

AZ Number 2 In Subprime Mortgages

The Arizona Republic today had a front page article that said Arizona ranks number 2 in the nation for percentage of subprime mortgages, second only to Nevada. But the delinquency rate on those loans in Arizona is 9.26 percent, which is less than the national average of 13.3 percent.What does this mean? I think it means the worst is still yet to come for the Arizona housing market. I expect foreclosures to continue to increase, especially since the...

SFI Options Expire Worthless

About a month ago, I sold some call options for some SFI stock I own. Those options had a strike price of $55 and expire tomorrow. Unless the stock shoots up 9 points in the remaining 3.5 hours of trading today (highly unlikely), those options will expire out of the money and I won't be required to sell my shares. I get to keep the $625 I got for selling the options (actually, around $611 after commissions) and on Monday I can turn around and do...

WSJ Article On Foreclosure Investing

The Wall Street Journal has an article today about foreclosure investing. Actually, it's more of the story of how one man invests in foreclosures. This guy buys foreclosed houses in bad neighborhoods, sight-unseen. He doesn't bother to fix them up. Instead, he sells them for low down payments and monthly payments that are lower than neighborhood rents. He sells them as-is and lets the new owners make repairs. Last year, he bought over 1,400 homes.In...

First Rent Check Arrives

My first rent check for the Tulsa house arrived today. And it was a postal money order, no less. No need to worry about bouncing chec...

Update On Louisiana Project

Sometime last month, I got word that the mortgage payment on the commercial properties in Louisiana was going to be missed. That payment is now 35 days past due. In that time, the mortgage investors (of which I am one) and minority property owners have had several conference calls discussing in what direction to proceed. The situation has been pretty fluid and I didn't want to post anything about it because it was changing so rapidly.It looks like...