January 2019 Net Worth Update (New Quarterly Update)

 

This is my official Quarterly Net Worth Update for January 1, 2019. Below are my actual numbers for ALL my investments and liabilities as of 12/31/2018. Detailed explanations and a quick summary can be found below. If you would like to see my previous months net worth posts, please visit my Net Worth Tracker.  I have been tracking my net worth monthly since May 2015.  If you want to learn how to track net worth then check out how I am doing it.

How To Track Net Worth

 

 

 

TOTAL NET WORTH: $866,302

 

Quick Summary and comments: +$21,056

Hey everyone!  I’m back!!!   If you are wondering why it’s been awhile since I have posted any updates, it’s because I decided in October that it makes more sense for me now to do quarterly net worth updates as opposed to the monthly updates I was already doing.   The main reason behind it is really just because my life is so busy now with all the real estate stuff, day job, travelling and raising a baby that it makes my life a lot easier to do quarterly updates.  So with that being said, this is my new quarterly net worth update that will reflect on this last quarter of 2018.

I am currently writing this from Pasadena, TX.  We have been in Texas for weeks now for our holiday adventure and we spent Christmas with my in-laws.   We have our dogs and our sweet little baby with us and its been quite a journey.  We drove here from Indianapolis and it was pretty stressful on the baby.   We kept the driving times per day to a max of 8 hours but that proved to be too much for the baby.    What I have learned now is that the baby can only handle about 5 hours in the vehicle before all hell breaks loose.

So when we do head back to Indianapolis in the coming week, we are breaking it up to max 6 hour car rides and it will take us three and half days to get home.   😐    I’m perfectly okay with this though.  As long as my sweet little baby girl is happy, then I will be happy.

Anyhow, It seems a lot has occurred this past quarter and I have spent so much money on all kinds of stuff, mainly new house stuff, travelling and plans/design for a new garage I will be building for our new house.   More on this in the personal life update below.

If it wasn’t for my yearly property value assessment, my net worth would be in the red this for past quarter.   Luckily, I updated the value on two of my homes as you can see above which I believe are now priced accordingly to their current value.

Personal Life Update:   About 8 months ago, geez that is so long ago!, I purchased a new house (property # 9 above) that would be our future primary home.  It has literally been being rehabbed this whole time and is only just now about to finish.  Long story short, contractor issues.  Surprise surprise right!?   Well when we get back to Indy from this Texas trip, we will finally start the process of moving in.   We are going to take our time moving in to relieve some stress and also because we really are not in a hurry.

The good news is that I will be converting my current house back into a rental property.  So this means more cash flow for me and a new rental property added to my books.   The bad news of course is that the new mortgage on the house I am moving into is a lot of money and even the new rental cash flow will not fully offset it!!

So my wife and I have decided it would make sense for us to try to pay this particular mortgage off as fast as possible.  It might not be the smartest move for us to make on paper, but right now, it seems like the smartest move for us to make for our well-being.   The thought of owing so much and having such a high mortgage payment on our primary home irks us!!   FYI , the new mortgage amount is $1800 per month.   That may not seem like a lot to you but considering our current mortgage on our current primary home is only $350, this is a huge increase.     We should be able to get about $1200 to $1300 from our new rental though so that will help a lot.

On another note, our baby is now almost 8 months old and she is doing very well.  She has grown so much and every day with her brings so much joy to my wife and I.  She has truly been a blessing and i can’t imagine living without her.   She is still super young and is not even crawling yet but is as cute as can be right now at this age.

Real Estate Investing Update:

Where do I begin!?   Okay a few months ago I bought a house with the intention of wholesaling it (property #11).  It was a pig of a house and I bought it for $40k, it needs a total rehab including foundation work.   It’s’ nasty but it is in a popular neighborhood in Indianapolis and I thought I would be able to sell it to another investor easy for $50k and make a quick profit from wholesaling.   Well that plan didn’t work as I was not able to find any buyers for it.

Things are really slow here in Indy this time of year and the house needs just too much work I guess which is scaring off a lot of buyers.     So with that being said, I am currently stuck with this house for now and it seems it may have been my first bad decision I have made in real estate investing.

The good news is that there are still a few options to come out ahead with this one but it will just take time.  My plan for now is to hold on to it until everything picks back up in the market, then hopefully I can sell it to another investor at even a small profit.  Thinking things pick back up in the spring time.   My worst case scenario would be that I have to tear down the property and just keep the lot, then hold on to the lot for as long as needed until I can sell the empty lot to a new builder and make some profit out of that.

Depending on where the market goes in the coming year will determine if I can make money off of it still.   Ill keep my fingers crossed.  If I really wanted to, I could also try to flip this property but right now, I just don’t think the profit would be good enough for me to waste my time on it.  At least not with the contractors that I know of.

Now for an update on property #10 which was my first full-blown flip that I started a long time ago.   We are now almost at 8 months in on this project and the property is still being rehabbed also.  Turns out my contractor is not so good and he is responsible for this delay.  Yep! More contractor issues and a different contractor albeit from my new primary residence rehab.

I am in the process now of looking for a new contractor although my current contractor now says that there should be no more delays on this.    It hasn’t been a full-blown nightmare though as I am not really losing a ton of money.   Lucky for me, I have only poured in cash that I have as opposed to money lent to me, and do not have any recurring monthly costs on this rehab other than the small utility bills.   In other words, I’m not paying interest which is a huge relief on money saved.

On another positive note, at this point because of the time of the year, it would not be a smart decision to list the house now as it would be hard to sell being winter and all.     So with all that being said, I’m thinking it would be smart for me to wait until Feb or maybe even March to list the house for sale anyways.   But at this point, it really just depends on when the house will even be completed which could still be a few months out, who knows.  We will see!!

Now for an update on my other real estate investments.  My rentals believe it or not are still going strong.  I haven’t had any new issues, late payments or bad luck with any of them.  I’m very satisfied here although the time is finally coming on my Austin rental where I need to replace the roof so I am not looking forward to that expense.  I have been anticipating this now for close to a year though so it’s nothing new.

Because I will soon starting building a new garage/studio on my new house, I am currently on hold for any new investments.   As of now, other than converting my existing house into a rental, I don’t have any plans on acquiring new rental properties.   But after the garage is built, that flip I am doing is sold and when I can figure out what do with property #11, only then will I start looking into getting a new investment property.

 

Okay enough about that, lets jump into my net worth categories.

Assets: Explanations of each of my assets.

Cash:   -$42,289

Most of this cash decrease was because I bought property #11 for $40k.   But I have also been spending a ton of money on other things which didn’t help.  My cash position is not as stong as I like and unfortunately I probably won’t be satisfied with it until after I sell off properties #10 and #11.  I will have to keep bleeding for now.

My cash as noted above in the spreadsheet consists of my wife and I’s checking account and my REI (Real Estate Investing) checking account.

HSA account: +$1,811

Seeing a decent increase in my monthly HSA account.  We haven’t had any new baby bills or anything pop up so that is great and this just gets automatically deducted from my W2 paycheck.

My HSA contributions are automatically deducted each paycheck from my dreaded W2 day job.

Company Stock Options: -$6,325

As you are well aware of by now, stocks have been getting hit hard lately and my company stock is riding the same boat.   People are losing a lot of money right now.   It’s time like these I am glad I don’t have too much invested in traditional stocks.

These are stock options from my day job. I am fully vested.    

Stock Portfolio: +$745

Of course when normal stocks are going down, these typically go up.  Although not by much.  My stock portfolio is built of precious metal mining stocks.  These are highly volatile and I am keeping these until the economy crashes and gold sky rockets.  I’m in it for the long haul on these as I think it’s just a matter of time before the precious metal sector takes off.    Overall I am still profiting from these stocks as I bought them for dirt cheap a long time ago when the precious metal sector was at its peak low.

I bought all my shares using tradeKing  which is now Ally.

401K: -$1,151

No surpsise here,  my 401k will go down as the stock market continues to get thrashed.   I made an executive decision awhile back to take money out of my 401k and no longer contribute any more money to it. Mainly because I do not get matched contributions from the dreadful day job. But also because I KNOW I can make better returns using that money on rental properties.    Any movement you see in this asset is only from market fluctuations.   I am not able to withdraw the remaining amount in here until I quit my job.   I really don’t like the idea of having an account that punishes me to take money out because of age.

Property # 1 (Indianapolis, IN)

All is good with my primary residence at this time, we will begin transtiioning this to a new rental property in January and hopefully have it rented out in February sometime or March 1st worst case.   We will soon be moving into property #9 and I am looking forward to the extra cash flow from this new rental.

My current primary residence in Indianapolis.  This was originally a turnkey property I bought back when I lived in Austin.     I bought this house for $67k back in June 2015 and cash flowed off it until I decided to move to Indy and move into it.   I spent an additional $30k in renovations when  I moved into this house to make it an awesome primary residence.  So I am all in for $100k.    Here are the details on when I originally bought this one as a turnkey rental property.

Property # 2 (Austin, TX)

Rent paid on time, no repairs made again.  I am finally starting to get quotes on replacing the roof on this one.  It’s been a long time coming.  This will cost a pretty penny but it’s a necessary evil and the good news is I will have a new roof and won’t have to worry about it for another 18+ years hopefully.

This is the property I self manage in Austin.   Even now that I live in Indy, I will continue self managing this one.  I think I can do it from afar and if in the future I realize that I can not continue being my own property manager, then I will probably just find a PM to handle it.

This was my first rental property.  It’s actually the first house I ever purchased in general.  I bought it when I moved to Austin way back in the day and it was my primary residence for a long time.  I originally never had plans for it to become a rental property but when I discovered the beautiful world of real estate investing, I knew I would someday convert this one to a rental.   I expect gradual appreciation from this property because it is in the suburbs Austin which has been growing tremendously.  Love me some HOT markets!

Property # 3 (Indianapolis, IN)

Rent paid on time and they submitted for more repairs.  This time some bathroom caulk issue and a storm door problem.    These tenants have submitted the most repair requests out of any other of my rentals.  They are really picky but they pay on time which is great.  Because of this, my returns on this one have not been stellar but they are definitely still positive and they are paying my mortgage while the house appreciates so I will take that.   🙂   Got to love real estate investing!

This is my first turnkey rental property I purchased out-of-state in Indianapolis. I do not expect much appreciation on this property. I purchased this for CASH FLOW purposes only.

Property # 4 (Austin, TX)

Mortgage paid on time. No issues. This is a note that I own from a house that I sold via owner finance in the Austin area.  If you notice though, the reason why this asset will continue to go down from the spreadsheet above is because it is a note and the principal balance on it goes down each month as the buyer pays me. Remember, I’m the lender on this one.

Property # 5 (Independence, MO (KC))

This is the property I just sold a few month’s ago.  I actually removed this from the spreadsheet already but I forgot to change the other property #s so I will fix that on the next update.    Anyhow,  I sold it for $55k and I had bought it for $45k.  I also made a lot of cash flow from this one over the 3 years I purchased it.  Overall it was a good investment and did its job great!  I am happy to free up the mortgage though and use the equity gained to fund future investments here in Indianapolis.

This was the last turnkey rental property I purchased located in the Kansas City area.  I bought this in late October 2015. I purchased this property also for CASH FLOW purposes only. I did not expect any appreciation gains on this one so it was nice to see it appreciate a bit.

Property # 6 (Indianapolis, IN)

Rent paid on time and no repair requests made.  This tenant is in their 3rd year leasing.  Freaking great!!!    This one was the property I originally wanted to convert to an airBnb but since the tenant renewed the lease I never did so I ended up converting property #8 into an airbnb instead.   This tenant has been great so far and I don’t want to ruin that.  Easy cash flow baby!!

I bought this rental property from a wholesaler here in Indy after I moved here.  I paid this one in cash and it came with a properly screened and paying tenant which was great.  The property needs some fixing up however I won’t mess with it until after the tenant moves out or submits repairs.

Property # 7   (Indianapolis, IN)

This property is a full-time airbnb vacation rental property and it’s going well but not as great I as initially wanted.  The competition here in Indy is fierce on vacation rentals.   We stay about 50% booked on it and still make anywhere from $300 to $500 more per month profit on it compared to if it was a normal rental property.  At this point it’s really just a job for my wife doing the cleaning but a well paid cleaning job.  🙂   There are other benefits as well being that the property does not get destroyed by tenants and we have an extra house to put family and friends in if they ever visit us.

I officially converted it into an airbnb in late January 2018 and it has been keeping steadily booked and we are making money.  This was a traditional rental property which was rented for $950.  After a year of having it as a rental, I decided to convert it into an airbnb because of its great location.  You can see how much money I made in the first two months of being on airbnb here.

I bought this house from a wholesaler here in Indy for $65k in a very popular Indy neighborhood back in late October 2016.   I put in about $20k getting it rent ready.    And an additional $10k to make it airbnb ready.

Property # 8  (Indianapolis, IN)

Rent paid on time.  No repair requests made.   Things are great with this one!

I bought this home as a foreclosure off the MLS.  Paid in cash, fixed it up and rented it out in 2017.  Check here for all the numbers and details of this property.

Property # 9  (Indianapolis, IN)

This one is finally finishing up and I will begin moving into it as my new primary in the next few weeks.  I bought this house as a fixer upper in April 2018 from HUD in what my opinion is the best neighborhood in all of Indianapolis (Holy Rosary/Fletcher Place).  I purchased it for $120k using a rehab loan (kinda like a 203k loan) and I will be moving into this home when it’s complete.  It will be my new primary home and I will have about 50k built-in equity right from the start.  It will also make for a good investment property if I ever decide to convert it to a rental.  Total loan on this after the rehab will be $250k and the house was already appraised with an after repair value of $300k.

Property # 10  (Indianapolis, IN)

Still being fixed up even after almost 8 months!  I have had contractor issues with this one but at the end of the day, I should still be able to make some decent profit from it.   Hopefully!!

This one is my flip project and is in full-blown rehab mode right now.  It is a full down to the studs rehab so will take a while to complete it.  I bought this house in May 2018 from a distressed seller in a popular neighborhood in Indianapolis.  Purchased cash for $56k.   This one will be my first intentional flip. My initial numbers are:

Purchase Price: $56k
Rehab Price:  $110k

Sale Price:  $230k (hopefully!)

Property # 11  (Indianapolis, IN)

This is a run down house in a good neighborhood that I purchased for $40k with the original intention to wholesale it off to another investor and make a quick profit.   Long story short, my plan didn’t work out and I am currently stuck with this one for now until I can either sell it off to another investor, hold on to it and sell later, possibly rehab it myself or tear it down and hold on to the lot so that I can sell it in the future for profit.

Not sure what will happen with this one yet but I will do all that I can to prevent losing money on it.   This is going to end up being the worst investment I have made to date and it really isn’t all that bad considering I can still possibly prevent losing money on it.


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Liabilities: These are self-explanatory so I wont dive too deep into these however I would like to include the items below for informational purposes.

Credit Card

I only use one credit card (rewards card) that I use to purchase my everyday expenses. I pay this off in full every month. I am receiving 1.5% cash back on this card and am very pleased with it. Satisfied!

 

Last 30 days net worth graph from Personal Capital

This month’s chart shows a big gap increase again because it’s when I spent the $40 to purchase property #11 and then an increase at the end when I adjust for the new values on two of my properties.   I love this chart! It looks great and its nice and big.

 

If you want to set up and track your net worth online like I do, create a FREE account at Personal Capital.

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