February 2015 Net Worth Update

It’s been a busy month with a lot more spending than usual. Once again, I’m involved in another rehab project, working on getting Rental Property SH #3 up to my turnkey standards. It’s costing me more than I had originally budgeted for, and as a consequence, the Net Worth is going to have to take a step back in the short-term.

Read on and see how things went in February!

Net Worth

According to Mint, my net worth is currently $771,405.52. This represents a decrease of 1.83% from last month ($785,811.26). I’m still using Zillow’s Zestimate to determine the value of my properties.

Screen Shot 2015-03-15 at 8.07.00 PM

Cash

I currently have $13,377.41 stashed away in my checking account ($12,532.08 previously). Cash appears to have stayed flat this month, but the reality is I dug deeply into my cash out refi funds to support the rehab costs.

When we first started the project, I anticipated spending $10,000 in total for both labor and materials. As we progressed, I decided to go ahead and upgrade both bathrooms, which added an additional $5,000 in expenses. Further, my investment partner is in the middle of another real estate transaction, so for now, I’m covering him on all the expenses on this project.

So, the immediate hit to my free cash has been pretty intense!

Loans

I owe the following loans:

Rental Property #3: $114,732.98

Total: $114,732.98

Rental Property #1 was eliminated from the ‘Loans’ section this month. Since I haven’t yet registered my account through Mint, for this month, I am accounting for the new Rental Property #1 loan under the ‘Properties’ tab.

Similarly, last month Rental Property #2 disappeared from this list. That loan also hasn’t been cleared for online access, so in the short-term, both loans will appear in the ‘Properties’ tab.

I apologize for the inconvenience; in a perfect world, both loans would be accounted for in the ‘Loans’ tab, where they belong.

Investments

I currently own stocks in my taxable brokerage account. My other investments are in 401k and Roth IRA.

Current 401k: $4,758.54
401k: $128,486.74
Roth IRA: $59,931.03
Brokerage: $90,399.34

Total: $283,575.65

Investments are up significantly this month since I started purchasing individual stocks again. I’ve injected about $60,000 of fresh capital, as I attempt to rebuild my dividend portfolio.

My 401k is static (starting this month), since I am no longer qualified to contribute to it while on my leave of absence.

Properties

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

Rental Property #1: $490,824.00
Rental Property #2: $481,243.00
Rental Property #3: $114,238.00
Rental Property #4: $86,983.00
Rental Property #5: $106,889.00

To keep track of my side hustle deals, I am simply inputing the downpayment amount. Rather than having to keep track of each property value and dividing out my ownership stake, I’m going to keep this simple and uncomplicated. However, these deals were made with the idea of future appreciation in mind, so ultimately their property values do matter!

Rental Property Side Hustle #1: $24,500.00
Rental Property Side Hustle #2: $32,562.00
Rental Property Side Hustle #3: $35,000.00

The following debts should be listed under the Loans tab, but unfortunately Mint forces manually inputted loans to show up under the Properties tab.

Rental Property #1: $326,250.00
Rental Property #2: $330,000.00
Rental Property #5: $124,447.58

Total: $591,541.42

Rental properties experienced only slight movement this month. The local properties are up again this month, and the out of state ones are mostly flat.

Again, the loans on Rental Property #1 and Rental Property #2 are being accounted for in this section, even though this is not where they should be; Mint is putting manual loans in this section by default. Once my lender grants online access to my loans, I will move them back to the appropriate ‘Loans’ section.

Summary

The total value of all assets now checks in at $1,669,192.06, an increase from last month ($1,579,311.13). I also owe $897,786.54.

Thanks to the refi on Rental Property #1 this month, my total assets now check in at over $1.6MM! Wow, that’s pretty exciting, and I’m getting increasingly closer to $2.0MM!

To me, the total value of assets you control as an investor are far more important than your Net Worth figure, especially when you are young and have many years of investing ahead. If you structure your deals correctly, your assets will only increase in value over time, while the debt gets significantly reduced.

As readers of this blog are aware of, I’m not the most conservative of investors. I believe that leverage can be a great tool in helping a financial freedom fighter achieve their goals in a relatively short amount of time. Of course, there’s more risk using this approach, so it’s always important to stash cash and to have multiple exit strategies. In my case, I’m trying to be a bit more conservative with my investments, and that’s one of the reasons why I’ve been so focused on investing in large cap blue chip dividend stocks. Over time, though, I truly believe that accumulating as many assets as reasonably possible is how you build substantial wealth.

Although the Net Worth is down this month, I’m not worried about that at all. Sometimes you have to take a step back before you take take two steps forward. In this case, I’m very confident that the decision to fully rehab Rental Property SH #3 was the correct one, and I’m optimistic it will pay off in the long run. In any case, it feels especially good to have locked down another Bay Area property, which are getting tougher and tougher to win these days!

As I always like to emphasize, I’m a long-term investor! If I can secure the assets that I want today, it’ll only be a matter of time before I start to reap the rewards. So, I’m going to keep ignoring the noise, and I’ll keep on pressing on…

 

Fight On!

 

2015 Net Worth Summary:

February 2015: $771,405.52

January 2015: $785,811.26

 

2014 Net Worth Summary:

December 2014: $781,996.44

November 2014: $763,680.73

October 2014: $716,124.37

September 2014: $702,618.90

August 2014: $724,476.61

July 2014: $718,780.24

June 2014: $693,514.01

May 2014: $665,115.97

April 2014: $633,456.43

March 2014: $598,435.05

February 2014: $557,154.47

January 2014: $586,137.08

 

2013 Net Worth Summary:

December 2013: $569,022.97

November 2013: $542,725.46

October 2013: $527,010.49

September 2013: $444,860.79

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Stefanie @ The Broke and Beautiful Life
Guest

Wow, I don’t know how you stay organized with all those properties. I have zero and my spreadsheets are already overwhelming 😉

Elroy
Guest

I don’t trust Zillow (and have a post coming up on it). I posted my networth for Feb, and I don’t believe the appraisal I got from my refi. Either way, both put me over the million dollar mark, but I don’t use them.

Nice work on the networth though!

Tawcan
Guest

Very impressive that you can keep a good record of all the properties. I like to use Spreadsheet to track our net worth, don’t trust these online programs…

Gen Y Finance Guy
Guest

Hey FI Fighter,

I am a little unclear what the side hustle deals are? How are these different from your rental properties. Sorry, I may have missed a post.

Just curious.

BTW, awesome progress. You Net Worth increased 38% since last February. I can appreciate that the bigger the number becomes the harder it is to put up those kinds of gains.

Cheers!

Brandon
Guest
Brandon

You can go back through the posts and see them labeled as “SH # 1” etc.,.

The side hustles are real estate rental deals he went in on with other people, vs. only himself.

The Money Spot
Guest

Do any of your side hustles involve helping other individuals become more organized? Very impressive how great of records you keep of all your properties.
Thanks for sharing, I always enjoy these posts.

No Nonsense Landlord
Guest

Do not worry about property values from Zillow. Use a constant value, like the tax value, or a multiplier of it, or similar. It will stay the same for a year. I just use tax value, even though my properties would be worth considerably more based on almost every other indicator. The latest sale or appraisal would add 10%+

Work on cash in the bank, cash flow, and investment reserves.

Jason
Guest
Jason

Impressive, FI, but I do agree with many that net worth is not a useful indicator. These days, all I watch is cash-on-cash return and total monthly cashflow. If I can grow that, I figure everything else will be fine.

I’m surprised that you’re still working deals in the Bay Area. I abandoned California for investing awhile ago – the prices are just too high to make it worth it. I have been selling here and have only one of my CA rentals left.

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