Rental Property #4 closed in mid-November, so I was finally able to clear this off the books! This depleted a good chunk of my cash, and I’m now working diligently on building back up some reserves prior to closing Rental Property #5. Rental Property #1 continues to rise sharply in value ($30,000 gain this month), which is kind of surprising since the Fall season usually marks a slow down in local real estate activity (price movement). Rental Property #2 is holding steady in value.
Also, Mint is currently having issues connecting with my brokerage account, hence the yellow exclamation mark you see below:
According to Mint, my net worth is currently $542,725.46. This represents an increase of 2.98% from last month ($527,010.49). I’m still using Zillow’s Zestimate to determine the value of my properties.
I currently have about $15,000 in cash sitting in my primary checking account. All of the funds are there to close on Rental Property #5, and I still need more to create the illusion of a cash buffer (to appease the underwriter). Last month, I needed funds to close on Rental Property #4. This month, we are focusing on Rental Property #5.
Although it might not look like I have much cash in savings right now, that’s actually because I’m a few months ahead in my loan repayments. To rapidly build up cash for closing, I’m going to skip loan payments in December and January for all of my rentals. Paying well in advance (three or four months), is my preferred method, as opposed to parking extra funds inside an emergency fund. I prefer to pay off the mortgages in advance since I do worry about Vanilla Reloads getting shut down for good one of these days. Finally, when closing gets closer, I will liquidate what’s left of the index fund and transfer the funds over to my checking account.
I owe the following loans:
Rental Property #1: $228,823.14
Rental Property #2: $229,005.88
Rental Property #3: $117,182.90
I currently own no individual stocks. My only investments are in 401k, Roth IRA and a safe haven index fund:
Roth IRA: $51,032.15
Index Fund: $25,141.99
I sold $5000 from the index fund to buy more Vanilla Cards while I was in Chicago earlier this month. These funds were used to make mortgage and property tax payments for the properties. Again, the remaining funds will be liquidated when I start closing on Rental Property #5.
According to Zillow, here are the values of each property:
Rental Property #1: $436,874.00
Rental Property #2: $370,756.00
Rental Property #3: $155,703.00
Rental Property #4: $75,149.00
Rental Property #4: $68,000.00
This section is starting to get a bit screwed up. The debt ($45,000 line of credit needed to close Rental Property #5) and Rental Property #4 loan really belong in the ‘Loans’ section, not the ‘Properties’ section. However, I haven’t figured out a way to add manual debt (that’s not supported in Mint) into the ‘Loans’ section. It seems if you want to add your own debt, Mint will just automatically move it into the ‘Properties’ section, no matter what you select using their menu system. I’ve read some posts from other users complaining about this issue, but it doesn’t seem like Mint has a resolution at this time…
For now, my two additional loans will show up in the ‘Properties’ section of the Net Worth report until Mint gets this issue fixed. Sorry for the confusion everyone.
The total value of all assets now checks in at $1,230,829.85, an increase of 7.21% from last month ($1,148,039.00). I also owe $688,104.39. Am I worried that the debt is ballooning every month (last month’s debt was “only” $621,028.51)? Not really, because I truly believe that, “what you owe today is what you’ll be worth tomorrow.”
Again, I’m the type of investor who plans on making it rich through the use of leverage. My goal is to get to $1,000,000 in debt before all is said and done. As long as the cash flow is going up at a rapid rate, you won’t hear me complaining.