March 2014 Net Worth Update

by FI Fighter on April 1, 2014

in Net Worth

Now that Spring is here, the days are getting longer and I’m finding myself wanting to get away from the cubicle even more often than ever. March is typically a long month (no days off), but for whatever reason, it seems like this past month blazed by. We are already a quarter’s way into 2014, which I’m finding hard to believe. The good news is that I have a lot of exciting trips planned that are just around the corner, so there’s a lot to look forward to.

Here’s the net worth update for March:

Net Worth

According to Mint, my net worth is currently $598,435.05. This represents an increase of 7.04% from last month ($557,154.47). I’m still using Zillow’s Zestimate to determine the value of my properties.

March_2014_Net_Worth

Cash

I currently have $8,154.41 in cash sitting in my primary checking account. I’m working hard, trying to rebuild cash reserves that were depleted thanks to the purchase of Rental Property #5 in February.

The good news is that I paid off the ~$5,000 credit card loans I had from last month. As usual, I paid on time and made sure to avoid having to make any interest payments to the credit card companies. I have NEVER, and plan on NEVER having to pay any credit card interest. I like to make liberal use of credit cards, but I use them responsibly (to earn travel points). I haven’t yet gone hunting for the next round of Vanilla Reloads, but will probably start in early April. I’ll use some of the rental income from April to pay for those bills.

Once the checking account clears $10,000, I’ll probably start moving any excess funds back into my emergency fund account (not tracked on Mint). One of my goals for 2014 is to build a cash buffer of $40,000.

Loans

I owe the following loans:

Rental Property #1: $227,866.92
Rental Property #2: $227,847.32
Rental Property #3: $116,703.86

Total: $572,418.10

Investments

I currently own no individual stocks. My only investments are in 401k and Roth IRA.

401k: $107,356.14
Roth IRA: $53,656.96
Brokerage: $4.65
Other Brokerage: $0.03

Total: $161,017.78

Investments are more or less the same, and holding a constant value. Last month ended with investments valued at $160,950.75. I keep track of my retirement accounts, but the monthly variations, and overall performance mean very little at this point in time.

Properties

According to Zillow, here are the values of each property:

Rental Property #1: $485,779.00
Rental Property #2: $364,275.00
Rental Property #3: $149,293.00
Rental Property #4: $84,661.00
Rental Property #5: $152,764.00

Debt: $45,000
Rental Property #4: $64,091.04
Rental Property #5: $126,000.00

Total: $1,001,680.96

Rental Property #1 has been fluctuating quite a bit these past few months. This month, it’s up again (3.9%) at $485,779.00 and coming in much higher than last month’s value of $467,749.00. Rental Property #2 is also starting to rebound as well, up to $364,275.00 this month, an increase of 2.9% from last month’s value of $353,922.00. The other rentals are all up as well, but just slightly.

I made my first loan payment for Rental Property #5 this month, but haven’t gotten a confirmation notice yet. For now, I’ve decided to just leave the original loan amount in place at $126,000. I will update the new balance next month. The $45,000 debt is also attached to Rental Property #5, and I will start paying that down next month as well.

Wow, the Properties tab is now checking in at just over a cool $1,000,000. Thanks to Zestimate being up this month, I was able to clear the seven figure threshold for the first time. I realize this tab means nothing, since Mint is combining some of my mortgages into this section as opposed to placing them in the Loans tab, which would be the more appropriate location. Still, seeing seven figures for the first time on this tab is pretty cool. When you tally up the property value of each rental, it does clear $1 million… Kind of surreal, I must admit.

Summary

The total value of all assets now checks in at $1,405,944.19, an increase of 2.6% from last month ($1,370,600.69). I also owe $807,509.14. I will continue working hard to save up cash! I am still hopeful of being able to purchase one additional rental property this year, even though it seems a long ways off at the moment. I just have to remind myself to be patient and to stay the course. Buying more properties is always fun, but building up cash is the smart thing to do right now. It’s not as exciting, but a necessary move…

{ 21 comments… read them below or add one }

1 RobNo Gravatar April 1, 2014 at 5:31 am

Well done. I’m fighting now to get my cc balance down to zero…it sucks. I enjoy reading the blog, keep up the good work.

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2 BrandonNo Gravatar April 1, 2014 at 8:53 am

Keep at it!!! Killed a $6k loan and my $4k car note so far this year… now just have a bit of CC balance myself.

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3 FI FighterNo Gravatar April 1, 2014 at 7:29 pm

Brandon,

That’s awesome! Congrats on already making so much progress this year.

Take care!

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4 FI FighterNo Gravatar April 1, 2014 at 7:28 pm

Rob,

Thanks! Appreciate the support. Paying down debt does suck, but keep at it. Better days await! 🙂

Cheers!

Reply

5 writing2realityNo Gravatar April 1, 2014 at 6:31 am

Just a couple more properties (or one big one) and you’ll hit that $1MM mark of total loans. Not too shabby given the cash flow generated by that debt. It will be interesting to see how your overall financial situation changes between now and the end of the year given your properties will all be cash flowing and supplementing your day job’s income.

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6 FI FighterNo Gravatar April 1, 2014 at 7:30 pm

writing2reality,

Yeah, I’m pretty excited to clear the one million mark. I might be able to do that this year, otherwise sometime next year ought to do it.

I hope by the end of the year, I won’t need my job any longer. We shall see!

Thanks for stopping by!

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7 Tom @ Finance and Flip FlopsNo Gravatar April 1, 2014 at 6:36 am

That’s pretty awesome I would just be careful about using zillow as a guide to your properties net worth, especially on properties in areas that fluctuate quite a bit (I’m sure you already knew this). Just hope the tax man doesn’t start using zillow to estimate the value of your properties otherwise you may find yourself with more expenses if the values continue to rise!

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8 FI FighterNo Gravatar April 1, 2014 at 7:32 pm

Tom,

Yeah, I don’t take the Zillow estimates too seriously, but use them more for approximations. I’m mostly focused on cash flow, so the properties can swing all they want, for the most part. I would like to cash out on #1 soon though.

I’m hoping to use a 1031 exchange to avoid the tax man 🙂

Take care!

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9 JC @ Passive-Income-PursuitNo Gravatar April 1, 2014 at 8:22 am

Great job and that’s inspiring to see your properties over $1M. And you’re almost at $600k net worth which is fantastic. I’m working on getting my net worth up but without leverage it’s a bit more difficult to make really fast gains. I’m still on the lookout for rentals, it’s just so difficult working out of town and not being able to go check out properties whenever I want. Hopefully I can sit down with one of the turnkey companies in the Houston area one of the times I’m home because I think that’s going to be the best route. Even if cash flow suffers a bit. Keep up the good work!

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10 FI FighterNo Gravatar April 1, 2014 at 7:35 pm

JC,

Thanks! It is a pretty cool feeling seeing the total property value clearing $1M. Yeah, building up the net worth through leverage is probably the easiest way to do it. Of course, there are risks with leverage, but it’s difficult making the same type of progress if you have to earn every penny to fund your investments.

This is most apparent in a downmarket where leverage lets you gobble up a ton of assets. Buy low and sell high… I hope to do so soon.

Best of luck on the rental investment! If your time is scarce, turnkey may be the way to go for the immediate future.

All the best!

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11 Roadmap2RetireNo Gravatar April 1, 2014 at 9:04 am

Wow great job FIFighter!
Very inspirational. Hope to catch up to you soon 😉

Best wishes
R2R

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12 FI FighterNo Gravatar April 1, 2014 at 7:43 pm

R2R,

Thanks! Just keep at it and you’ll get there soon!

Cheers!

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13 EvanNo Gravatar April 1, 2014 at 9:36 am

Once you hit that one more (Or 3, 4 or 5 more)…any thought about deleveraging? or just going to keep it going steady? Just curious about future plans

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14 FI FighterNo Gravatar April 1, 2014 at 7:45 pm

Evan,

Yes, I definitely plan on deleveraging once I get to 10, or max out my loans. After that, I will work on paying down the loans one at a time.

Take care!

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15 Done by FortyNo Gravatar April 1, 2014 at 10:51 am

Whoo-hoo! Over a million on the properties is a great milestone. Hopefully we’ll join you there someday soon.

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16 FI FighterNo Gravatar April 1, 2014 at 7:45 pm

Done by Forty,

Thanks! It is a great feeling, and I’m sure you’ll get there soon yourself. Buying properties is pretty addicting 😉

Cheers!

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17 No Nonsense LandlordNo Gravatar April 1, 2014 at 2:49 pm

Keep building a reserve. You will need it if you have an eviction, or an extended vacancy. Assume a ‘normal’ vacancy will hit you for $5K, between what the PM charges and normal vacancy. Vacancy is an opportunity cost, which is real, but any fix up expenses are even more real, as they are out-of-pocket. A Chicago eviction will be a very bad deal and could take months.

I often have a smooth transition, with zero vancancy between tenants, but that is not always the case. I am also not 100% sure how motivated the PM is on your properties, vs. whatever else they have going on. With my properties, I am 100% motivated…

Keep up the great work. There will always be properties. There is no rush. A deal today will be a different deal tomorrow. Over stretch and get a major hiccup, and there will be no more deals, not for you anyway. Even travel hacking will be unavailable.

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18 FI FighterNo Gravatar April 1, 2014 at 7:47 pm

Eric,

Yeah, evictions definitely do scare me and I don’t want to take them lightly. It is important to build up the cash reserves, so I’m going to take your advice on that.

Over time, I’ll find out how good the PM is but yes, I would doubt that they would be as good as if I were to manage it myself. Like you pointed out, only YOU will have 100% interest in making sure everything goes through smoothly.

Great point on not rushing. One catastrophe and this game is over… No need for that. I’m learning myself and trying better to pace myself. Slow and steady wins the race.

All the best!

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19 kbNo Gravatar April 2, 2014 at 6:11 am

Wow – good work man. I am truly impressed to see the progress. This is one of the blogs I favor more than the others. I was curious – did you have any strategy on the paid off rental properties? Or did it just work out that way? If you’ve previously posted on this I apologize and would appreciate it if you could point me towards the answer.

I’ve finally shifted gears on my own life and now I’m just trying to aggressively save some cash so that I can begin purchasing rental properties.

Thanks!

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20 FI FighterNo Gravatar April 12, 2014 at 5:40 pm

kb,

Yes, the strategy is to try and get to 10 loans first. After that, I will work on paying down the debt (mortgages).

Best of luck on the savings. You can do it!

Cheers!

Reply

21 NunoNo Gravatar April 22, 2014 at 2:07 pm

It’s really amazing to follow your path to FI. Great job!

Reply

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