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:
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.
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. 🙂
I owe the following loans:
Rental Property #1: $228,627.41
Rental Property #2: $228,499.05
Rental Property #3: $117,182.90
I currently own no individual stocks. My only investments are in 401k and Roth IRA.
Roth IRA: $52,055.12
Other Brokerage: $0.02
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.”
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
Rental Property #4: $64,337.38
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.
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.