January 2020 Net Worth Update

 

This is my official Net Worth Update for January of 2020. Below are my actual numbers for ALL my investments and liabilities as of 01/01/2020. Detailed explanations and a quick summary can be found below. If you would like to see my previous months net worth posts, please visit my Net Worth Tracker.  I have been tracking my net worth monthly since May 2015.  If you want to learn how to track net worth then check out how I am doing it.

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TOTAL NET WORTH: $970,716

 

Quick Summary and comments: +$77,373

Ladies and Gentlemen!  Im back!!  It has been about 6 months since I last wrote a post and I decided with the new year up ahead, its time to start tracking my finances again.  I am still very passionate about investing in real estate, growing my passive income, growing my net worth and eventually becoming financially free.  Financial Freedom baby! That’s been the name of the game since I first started this blog almost 5 years ago and I still am on that pursuit.

I’m sad to report that after all this time, I am still not even a millionaire although I am right on the cusp as you can see in my spreadsheet.  I see the light!!!   2020 will be the year I finally reach 1 million dollars in net worth.   Hopefully!!!

Personal Life Update:

I now have a 19 month old girl and a 6 week old boy.   My life is just so different now because of these kids.   They bring me so much joy and I am happy to report my wife and I are doing great!   We are tired from lack of sleep but our health is good, our kids are amazing and we still love living in Indianapolis.

Speaking of, we moved here (Indy) over 3 years ago when I decided to uproot my life to live in a lower cost of living city and build a real estate empire so I can live financially free.  You can read all about that here.  Anyhow,  recently my brother and his family moved here which means we finally have family here with us.  They have 4 kids of their own so it makes for a ton of fun when we get together.  The holidays were amazing because of this!!  So much fun!

Real Estate Investing Update:

A lot seems to have happened in the last 6 months regarding my real estate portfolio.

I sold properties #3 and #5 from the spreadsheet above.  These were both C class rental properties that just happened to go vacant around the same time.  I recently came to the conclusion that I would rather have my portfolio consist of higher class rental properties.  I only want rental properties that generate me at least $1k per month in rent.   These last two rentals were the only ones left which do not fit my new criteria.   Both were sold at a profit and both were good money makers to be honest but I think I will be better off in the long run because of this decision.   God forbid I pass away, I want to leave my wife in charge of some quality rentals with some quality tenants.

The carriage house I was building in my back yard of my downtown primary residence was finally completed and is now making me money on Airbnb.   We have it as a short term vacation/rental property and also keep it available to our family guests when we get visitors.   So far its going really well and it adds another income producing property to my portfolio.

I also had a house I was flipping (property #9) which was a huge nightmare because of contractor and city issues.  I am very pleased to say that it was finally completed and the property is currently listed for sale.  The bad news is on I am not getting any offers on it.  If it doesn’t sell by the end of January I am going to list the property for rent and try and sell again a year from now.

Okay enough about that, lets jump into my net worth categories.

Assets: Explanations of each of my assets.

Cash:   +$49,398.71

I am no longer bleeding cash because I no longer have a flip or carriage house being built taking all my money.  And after selling those two C class rental properties, I am seeing a nice little bump in my cash.  Eventually my plan is to purchase another rental property but I am back in savings mode for now.  At least until I can get rid of property #9.

My cash as noted above in the spreadsheet consists of my wife and I’s checking account and my REI (Real Estate Investing) checking account.

HSA account: +$439

Saw a small increase in my monthly HSA account.  Nothing special.

My HSA contributions are automatically deducted each paycheck from my dreaded W2 day job.

Company Stock Options: +$3,104

Decent increase in my company stock options.

These are stock options from my day job. I am fully vested.    

Stock Portfolio: +$1,091

I am down to just a couple of stocks left and they are in precious metals.  These are my last two and only two that didn’t make me profit.   I plan on holding out until these two are profitable and then just get rid of them.

I bought all my shares using Ally.

401K: +$776

I made an executive decision awhile back to take money out of my 401k and no longer contribute any more money to it. Mainly because I do not get matched contributions from the dreadful day job. But also because I think I can make better returns using that money on rental properties.    Any movement you see in this asset is only from market fluctuations.   I am not able to withdraw the remaining amount in here until I quit my job.   I really don’t like the idea of having an account that punishes me to take money out because of age.

Property # 1 (Indianapolis, IN)

All is good with my primary residence at this time.  We live in downtown Indianapolis and we love living here.  We have a carriage house that we built in the back which we list on Airbnb.  We anticipate making anywhere from $800 to $1000 per month with it.

My current primary residence in Indianapolis.

Property # 2 (Austin, TX)

Rent paid on time and there was 1 repair request submitted a few months ago for a plumbing leak.  Cost me about $150 to fix.  My current monthly mortgage payment on this one is $980.  It’s rented for $1300.

The lease on this one is up in April 2020 and I am highly debating selling this house.  If I sell, I will make around $100k in profit which I can use to get better cash flow here in Indianapolis.   This is a great low maintenance rental and all but I only make about $300 in cash flow each month.  If I sell and use that money to get a rental here in Indy, I think i can get more then double that cash flow.

I self manage this property from remote and will continue to do so until it makes sense to get a property manager.

This was my first rental property.  It’s actually the first house I ever purchased in general.  I bought it when I moved to Austin way back in the day and it was my primary residence for a long time.  I originally never had plans for it to become a rental property but when I discovered the beautiful world of real estate investing, I knew I would someday convert this one to a rental which is now.   I expect gradual appreciation from this property because it is in the suburbs Austin which has been growing tremendously.

Property # 3 (Indianapolis, IN)

After owning this C class rental for about 3 years and all with the same tenant, I finally decided to sell when the tenant vacated.    I sold it for $87k and purchased it for 50k 3 years ago.  Not bad!

This was my first turnkey rental property I purchased out-of-state in Indianapolis when I was living in Austin.

Property # 4 (Indianapolis, IN)

Tenants paying on time and no repairs made.  Currently a cash cow!  Monthly mortgage payment on this one is currently $409.  It’s rented for $1200.

This was the house I lived in when I first moved to Indianapolis.  It was a rental property, then my primary residence and now back to a rental properly.  It took me 1 week to find qualified tenants in February 2019 and this property is now being rented for a nice $1200 per month and leased for 2 years.  It’s a cash cow and I love this one a lot!

This was originally a turnkey property I bought back when I lived in Austin.     I bought this house for $67k back in June 2015 and cash flowed off it until I decided to move to Indy and move into it when we first came to Indy.   I spent an additional $30k in renovations when  I moved into this house to make it an awesome primary residence.  So I am all in for $100k.    Here are the details on when I originally bought this one as a turnkey rental property.

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Property # 5 (Indianapolis, IN)

This was a C class rental property I sold off.  I owned it for 3 years all with the same tenant (luckily).  It was actually a great little rental and cash cow but no longer fit my criteria of better quality rental properties.  I sold this property for $75k.  Original purchase price was $50k.

I originally bought this rental property from a wholesaler here in Indy after I moved here.  I paid this one in cash and it came with a properly screened and paying tenant which was great.

 

Property # 6 (Indianapolis, IN)

Rent paid on time.  One repair request was made for the furnace no longer working.  Cost me a few hundred to fix.  Other then that, no issues.  Current mortgage on this one is $0.  Paid for it all in cash!    Its currently rented at $1100 monthly.

This was the rental that I had converted it into an airbnb in late January 2018.  It actually did make more money as an airbnb then a traditinal rental but not that much more.  At the end of the day, it wasnt worth it to us to maintain and clean it was a new baby coming.  We just didnt have time and if we hired cleaners, it would have only left us with a few hundred more per month then a normal rental.   We decided to convert this back into a normal rental.

You can see how much money I made in the first two months of being on airbnb here.

I bought this house from a wholesaler here in Indy for $65k in a very popular Indy neighborhood back in late October 2016.   I put in about $20k getting it rent ready.    And an additional $10k to make it airbnb ready.  All in for about $100k.

 

Property # 7   (Indianapolis, IN)

Rent paid on time and one repair request made however I fixed it myself at no cost.  Current mortgage on this one is $0.  Paid for it all in cash!    Its currently rented at $1050 monthly.

These tenants have been great and this property has been a cash cow!

I bought this home as a foreclosure off the MLS.  Paid in cash, fixed it up and rented it out in 2017.  Check here for all the numbers and details of this property.

 

Property # 8  (Indianapolis, IN)

Mortgage paid on time. No issues. This is a note that I own from a house that I sold via owner finance in the Austin area.  If you notice though, the reason why this asset will continue to go down from the spreadsheet above is because it is a note and the principal balance on it goes down each month as the buyer pays me. Remember, I’m the lender on this one.

 

Property # 9  (Indianapolis, IN)

This property has been nothing but a problem child for me. I originally bought it to flip over a year and a half ago and it only just now recently completed.  Its currently listed for sale but its not selling.  I have lowered the price and it’s still not selling.  I cant lower it anymore as I will end up losing money and I should be able to avoid losing money on this one if I just hold out.   My plan is to rent it out if it doesn’t sell within the next month then try and relist it next year and recoup my money.  I’ll keep my fingers crossed.   The only bright side now is that I have learned so much from this property and feel so much more wiser about investing having gone through this.

This one is my first ever full gut flip project.  I bought this house in May 2018 from a distressed seller in a popular neighborhood in Indianapolis.  Purchased cash for $56k.  All in costs now that the rehab is complete is about $230k.   Currently listed at $250k but not selling.   Yes I know this was a bad investment.  One of my few bad ones.  Actually only my 2nd bad one but I still have the potential of not actually losing money on this.

 

 




Liabilities: These are self-explanatory so I wont dive too deep into these however I would like to include the items below for informational purposes.

Credit Card

I only use one credit card (rewards card) that I use to purchase my everyday expenses. I pay this off in full every month. I am receiving 1.5% cash back on this card and am very pleased with it. Satisfied!

 

Last 90 days net worth graph from Personal Capital

This month’s chart shows a big gap from when I used up cash to fund my carriage house up until slowly recovering that money back from adding equity to my primary residence.   I love this chart! It looks great and its nice and big.

 

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Cash Flow Diaries

3 Comments

  1. Thanks for the update! I’m trying to get out of consumer debt in order to start investing in turnkey properties. Would you ever recommend buying property 100% down? And have you ever worked with Memphis Invest?

    • Hi Jon! Do you mean 100% down as in pay for it in full cash? Or get 100% financing? Either way, yes if the numbers work and the property is good I would definitely entertain both of those. I have never worked with Memphis Invest. I only purchase properties in Indianapolis now as I have been very successful here so far.

      • Hi! Sorry for the late reply! Yep 100% down as in full cash, I’m becoming averse to debt since I’ve had trouble managing it, but I can see the power of leverage. And which Turnkey companies have you worked with in the past if any?

        Thanks!

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