December 2013 Net Worth Update

As we get set to close on Rental Property #5 in January 2014, I had to shuffle some money around this month to create the illusion of a “cash strong” position. You never know how much money the underwriter is looking for exactly, so I thought it would be safe to aim for $60,000 at closing.

I still have a ways to go, but don’t worry, when there’s a will there’s a way! Here’s how things stacked up at conclusion of December:

December_2013_Net_Worth

Net Worth

According to Mint, my net worth is currently $569,022.97. This represents an increase of 4.84% from last month ($542,725.46). I’m still using Zillow’s Zestimate to determine the value of my properties.

Cash

I currently have $48,329.27 in cash sitting in my primary checking account. As mentioned above, I’m getting set to close on Rental Property #5, so it’s imperative I build up this stash as much as possible. Since this is my fifth rental, the lender now expects that I have 30% available for the downpayment, which is 5% more than what I’m used to paying. Further, I need about $6000 in additional funds to cover closing costs (even if the seller will end up reimbursing me most of it).

Originally, I did not anticipate needing this much in funds, so getting to the $60,000 mark by the middle of next month will be a challenge. I’m about $12,000 short at the moment, but do have some tricks up my sleeve to help bridge the gap. For starters, I have some ESPP stock coming down the pipeline in early January. In addition, I’m ahead on all my mortgages, so I can transfer most of the rental income collected next month towards the downpayment. Further, I still have another two paychecks I can count on for more funds… and lastly, I should be collecting a few thousand dollars acquired through a side hustle gig earlier this month (real estate related). Yep, I’m cutting it close! But this should be doable…

After closing, I’m taking a “long” break from buying any more properties. I need to rebuild my cash reserves. 🙂

Loans

I owe the following loans:

Rental Property #1: $228,627.41
Rental Property #2: $228,499.05
Rental Property #3: $117,182.90

Total: $574,309.36

Investments

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

401k: $102,645.46
Roth IRA: $52,055.12
Brokerage: $4.65
Other Brokerage: $0.02

Total: $154,705.25

I sold the last remaining $25,000 I had in my “safe haven” index fund earlier this month. These funds have been transferred to my checking account and will be used to fund Rental Property #5. I left less than $5.00 in the account so my broker will stop e-mailing me, asking me to “please fund your account.”

Properties

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

Rental Property #1: $454,165.00
Rental Property #2: $364,485.00
Rental Property #3: $154,345.00
Rental Property #4: $77,953.00

Debt: $45,000
Rental Property #4: $64,337.38

Total: $941,610.62

Most of the rental properties are holding steady in value, but Rental Property #1 keeps on increasing in value, up another $17,000 or so this month ($436,874.00). I haven’t been keeping up with nearby comps, so I’m not sure how accurate these numbers really are.

Summary

The total value of all assets now checks in at $1,253,982.52, an increase of 1.88% from last month ($1,230,829.85). I also owe $684,959.55. Not too much to report this month, except that I’m getting ready to close on another property. Once closing is complete, I’m going to take some time off from buying any more properties… at least until I can replenish the cash flow reserves. Even though my short-term goal is still to get to $1 million in debt, I also do realize how important it is to have lots of cash on hand! So, no more living on the edge after Rental Property #5 closes… At least for awhile.

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Retire Before Dad
Guest

FIF,
You are hardcore man, I love these posts. It does sound like taking a breather will do you well after #5. Happy New Year.
-RBD

Martin
Guest

RBD, no he is crazy. As soon as he closes #5 he will go for #6. Believe me, I know him. But that’s what impresses me a lot and what makes me admire him. Hope he will do well. He is hardcore… 🙂

theFIREstarter
Guest

Ha ha, I wouldn’t bet against it Martin!

FI the only rep you are getting is of a total badass! Go man go!

writing2reality
Guest

Dang, RBD is right. Hardcore and kickin’ ass. Love the snapshot and the rapid accumulation of wealth given some wise leveraging. While it stinks to plow all that equity into a property, it will only serve to insulate you over time should there be any value challenges and you need to dump a property or two.

Keep up the good work and Happy New Year!

AJ
Guest
AJ

Good stuff man. Bet you aren’t too upset about low cashflow on rental #1 with appreciation doing nicely. So how about opening a HELOC on #1 to have some extra capital to tap if needed?

Martin
Guest

Looks like it’s time to calculate my net worth. I was avoiding it to avoid the truth…

JC @ Passive-Income-Pursuit
Guest

$1.2 M in assets is awesome. We’re still working on our first rental property but hopefully in another week or two we can put an offer in. I hate being out of town for work as it makes it extremely difficult to try and see properties. RP#1 sure is having some awesome appreciation, although given the area that shouldn’t be too surprising. Keep up the good work! My guess is that the “long break” lasts until early March.

Fast Weekly
Guest

Hardcore is right, but he’s kicking ass. They say fortune favors the bold……and this seems true of you my friend. Good work putting yourself out there
-Bryan

Brent @ All About Intrest
Guest

Talk about full throttle real estate investing. I love the pace you’re on of leveraging every cent into the real estate market. I really hope this pays off for you. My goal is to add a rental #3 this year. I don’t have the balls yet to go out of state. There’s no reward without taking some risk though. Keep it up!

Leigh
Guest

Haha, your shuffling money around for closing reminds me of when I realized I had more money than I thought I did and I could buy *a* place 🙂

How long is a “long” break? 😛 Two months??

I am with the other commenters – I’m not sure I could stomach the level of leverage you’re taking with how little cash reserves you have! Then again, I’m much more fiscally conservative than you!

The First Million is the Hardest
Guest

haha, you don’t see too many people saying they’re looking to reach $1mm in debt! 🙂 Great job so far, good luck with #5!

Integrator
Guest

Wow FIF….. That’s impressive stuff. We should be closing on a new home soon. That will give rise to rental property 1 once we moved in and we eventually rent out our current place. 5 of them I just can’t imagine. I love the big thinking though!

Brick By Brick Investing | Marvin
Guest

This is freaking awesome! I love it, one of these days I’m going to need to make the jump into real estate. I believe you will grow your fortune much faster in real estate than in stocks.

Trader
Guest

Great achievments!
FI is around the corner for you.
Keep going!

Evan
Guest

“Once closing is complete, I’m going to take some time off from buying any more properties… at least until I can replenish the cash flow reserves”
– Ever think about when you’ll deleverage? Pay off those debts and live off the income flow?

Liam Goble
Guest

FI Fighter, why is the lender requiring you to put the 30% down? As I have accumulated more RE, my lender has been allowing me lower down payments. Have you shopped your business around? Probably worth while.

I apologize if it’s in a post somewhere, but how did you get started with REI out of state? That would make for a good post…How to hire a PM, how to evaluate the property from afar, how to evaluate the market from afar…

Thanks. Liam

Jim
Guest

Fi Fighter, you appear to be in great shape financially for a 30 year old. Keep it up, and continue to teach and inspire as many folks as you can. 5 rentals is awesome!

Woman with a Plan
Guest

I also use Zillow to determine my property’s (hoping to make that properties’ soon) net worth. We bought our first rental almost 5 years ago, so I don’t know how accurate the Zestimate feature is anymore. Do you think it is fairly reliable based on your recent purchases? I’ve heard that it overestimates values.

Resman
Guest

Can I use this image in an article I am writing about risk ?https://www.fifighter.com/wp-content/uploads/2013/12/December_2013_Net_Worth1.png
Thanks
resman
It will be posted on : http://www.resilientman.com

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