This is my official May 2017 Net Worth Update. Below are my actual numbers for ALL my investments and liabilities as of 05/31/2017. 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: $510,063
Quick Summary and comments: -$3,847
Two negative months in a row. Man oh man this hurts! It’s the first time I have had two negative months consecutively since I started tracking my net worth exactly two years ago. Last month I had a negative month because my wife and I spent a ton of money travelling and because I also paid off my Mother’s credit card debt. This month it’s because I spent a ton on money again but this time all on house repairs for my primary house and some of my rental properties. My main water line on my primary house busted and I had to pay just over $4k to fix it. It was a nightmare situation and my wife and I are so happy that it’s now fixed. This was also the first month I had multiple repairs go down on multiple rental properties which totaled over $1300 in repairs as you will see in my property breakdown below. I guess when it rains it pours you know!? Oh actually my wife and I did take a weekend getaway out to Louisville, KY also and we didn’t hold back on spending. What can I say, we love to travel!!! 🙂
So if you do not know already, I am a very optimistic person and like to keep a good attitude always. Even though I had another negative month, I am happy that I was able to fix all my housing needs, keep my tenants happy with necessary repairs and do another weekend trip with my beautiful wife.
Real Estate Investing Update: I have now been on the search for over 2 months looking for my next rental property through wholesalers and even on the MLS. After submitting multiple offers, getting rejected and analyzing dozens of properties I finally have one under contract. I am excited about my next rental property. This one is going to be a fixer upper that I plan on buying in cash, fixing up and renting out. And it fits all my criteria which I love! It’s not 100% yet, at least not until I close on it. I will have more news for you later on for this new investment property.
Okay enough about that, lets jump into my net worth categories.
Assets: Explanations of each of my assets.
Don’t let this number fool you. The only reason this went up is because I cashed out again on some of my company stock options. I received close to $18k from the sale and I will need to put away $6k of that to pay taxes next year. Boo!!
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. Satisfied! (Sort of)
HSA account: +$135
Slight increase in my HSA account from my paycheck contributions. Nothing crazy.
My HSA deductible is $1300 for the year and I have close over $5k in this account so with that being said, since I am maxed out already with my yearly deductible, I don’t see a need right now for depositing more funds. I am only taking a very small amount out from my day job paycheck to fund this account. Any money after that deductible will just sit in that account not making me money. I know I can use the money that I don’t put in there to get better returns as long as I invest it in more real estate. This number should increase each month a tiny bit. Satisfied!
Company Stock Options: -$17,808
My company stock options never seem to stop amazing me. It reached another all time high and I had to sell! I’m really running low now on remaining stock options and although this is concerning to me, I sleep well at night knowing that I am making a ton of profit from these. And luckily, I still have over $20k worth. I just hope the stock price remains or continues to improve.
These are stock options from my day job. I am fully vested. Satisfied!
Stock Portfolio: +$574
My stock portfolio is built of precious metal mining stocks. It has been a roller coaster ride with these as expected. I finally saw a slight increase on it. It has been on a negative slope for a few months now. I’m not too worried about what these do in the short-term. I’m in it for the long haul on these as I think it’s just a matter of time before the precious metal sector takes off. Overall I am still profiting from these stocks as I bought them for dirt cheap.
I bought all my shares using tradeKing. Satisfied!
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 KNOW 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. Satisfied!
Property # 1 (Indianapolis, IN)
Ugh!! My main water line busted on me and I had to pay over $4000 to fix it. Luckily the super old pipe didn’t completely burst and destroy my basement. I caught the leak before it had a chance to do that so in a way I got lucky. The damage could have been a lot worse! The house I live in is in a historic neighborhood called Bates Hendricks and the house was built-in the early 1900s. The main water line that goes from the street to my house was still the original pipe. So yes it was over 100 years old. I’m shocked it lasted that long and now I have 100% new plumbing in the whole house and street.
My primary residence in Indianapolis. This was originally a turnkey property I bought back when I lived in Austin. I bought this house for $67k almost 2 years ago. Spent an additional $30 in renovations when I moved into this house. I love the location, the size of the house and because my mortgage on it is less than half of what I was paying when I was living in Austin, TX. Super Satisfied! Here are more details on when I originally bought this one as a rental property.
Property # 2 (Austin, TX)
Rent paid on time (early again actually) and no repair requests. The perfect tenants as far as I’m concerned. I screened them myself and I am proud. 🙂 This is the property I self manage in Austin. Even now that I live in Indy, I will continue self managing this one. I think I can do it from afar and if in the future I realize that I can not continue being my own property manager, then I will probably just find a PM to handle it. So far everything is going great. I have not heard a peep out of them and they locked in for a 2 year lease so I’m hoping this one is a cash cow for a long time.
This is my first rental property. It used to be my primary residence at one point. I expect gradual appreciation from this property because it is in the suburbs Austin which has been growing tremendously. Love me some HOT markets! Satisfied!
Property # 3 (Indianapolis, IN)
Rent paid on time and no repair requests made. And these tenants renewed the lease for another 2 years! My PM has a deal in which if they renew for 2 years, we knock off $25 from the monthly payment. It’s a great deal and a win win for everyone. The tenant gets a lower payment and I get an extra two years of no turnover and vacancy costs for a very small fee. These tenants in the past have been super picky and have requested more repairs than any of my other tenants, mostly really small stuff but at the end of the day, they are a good family and I am happy to keep them.
This is my first turnkey rental property I purchased out-of-state in Indianapolis. I do not expect much appreciation on this property. I purchased this for CASH FLOW purposes only. Satisfied!
Property # 4 (Indianapolis, IN)
Rent paid on time and I received two repair requests. A small plumbing leak in the kitchen and a broken garage door opener. Overall I had to pay over $300 to fix all this and I was not happy about that however it needed to be done. Plus this tenant has been very good to me in the past. Unfortunately the tenant informed me last month that he is looking for a house to purchase on his own. This tenant had recently renewed for his 3rd straight year however and now that he they will be buying a house, they want to break the lease. I have proposed to allow the tenant to break the lease as long as they keep paying the monthly bill up until I can find a new tenant. It is really putting myself as the owner and the tenant in a bad situation by doing this. We’ll have to see what happens but looks like I will having my first turn over on this property in over 2 years of owning it. Not too bad really. This property was the one that I fired my property manager from originally when I first bought it as a turnkey rental properly.
This my 2nd turnkey rental property in Indianapolis I do not expect much appreciation on this property. I purchased this for CASH FLOW purposes only. Satisfied!
Property # 5 (Austin, TX)
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. Satisfied!
Property # 6 (Independence, MO (KC))
Rent paid on time and no repairs on this one either. To date I have never had a repair call on this one and I have now had this property for about a year and a half. Its been a cash cow! This is the last turnkey rental property I purchased located in the Kansas City area. I bought this in late October 2015. I purchased this property also for CASH FLOW purposes only. I am not expecting appreciation gains on this one. Satisfied!
Property # 7 (Indianapolis, IN)
Rent paid on time and I had to pay $1k to fix a leaking chimney. The repair request came in April though but I paid for it in May. Fortunately, when I bought this house, it came with a tenant and I never had to make any repairs on it even though I purchased the house as a fixer upper. I’ve been waiting on the tenant to move out before I fixed it up but the tenant renewed the lease for their 2nd year. Cant complain there! 🙂 This one was the property I wanted to convert to an airBnb but since the tenant renewed lease, I will put the airbnb venture on hold. The tenant has been great so far and I don’t want to ruin that. Easy cash flow baby!!
I 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. The property needs some fixing up however I won’t mess with it until after the tenant moves out or submits repairs. This is the one I really want to convert to an AirBnB.
Property # 8
Rent paid on time and no repair requests. Life is good!
I bought this house from a wholesaler here in Indy for $65k in a very popular Indy neighborhood back in late October 2016. I finished the rehab on this one in late November/early December 2016 and got it rented out for $950 just in time for Christmas. December is not easy to find a qualified tenant. Not only did my property manager find a qualified tenant but the tenant signed an 18 month lease so that we both don’t have to deal with a vacancy/move in December again. Talk about a Christmas miracle!!!
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.
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 30 days net worth graph from Personal Capital
Although this month’s chart is boring and negative, I really do love this chart. It looks great and its nice and big. Good stuff!
If you want to set up and track your net worth online like I do, create a FREE account at Personal Capital.
There you have it folks! How was your month? Subscribe here if you would like to receive emails on future posts including more net worth updates.
Stay away from water! 🙂 You can call May your leaky month. Considering how bad potentially these damages/repairs could have been, sounds like they turned out okay. Let’s hope June is nice and quiet!
OMG yes I need June to be nice and calm! Ill keep my fingers crossed.
Can I ask why homeowner’s insurance didn’t cover it?
Because the pipe was over 100 years old and they said it was normal wear and tear. They would only cover if it broke from some kind of natural disaster. I did try though and was rejected.
Congrats on finding your next property, I’m excited to hear about it. Was this one through wholesalers?
When you are looking / monitoring – how much time do you spend a week? Just a couple if a deal comes your way that requires a closer look or diligently looking at the MLS every day?
Hey Brian! Whats up bud? Ill be writing a post about the new property after I close, fix it up and have it rented out. Im excited about for sure!
When I am looking, im analyzing deals sent to me by all the wholesalers here. I get deals just about every day. And when I have free time, i get on the MLS and check out what is going on there. Honestly Its probably only like 20 minutes a day worth of looking around unless I find one im really interested in then Ill put in an extra 10 minutes on it to run all the numbers.
Oh these water pipes… I like your rental portfolio, but I would be a little bit scared (even Russians can be scared) by not having emergency fund, but it’s probably me.
Hope your June will be better than May ?
Hey Friendly Russian!! 🙂 I make it an effort to always make sure I have emergency funds to handle situations like this. It will break you if you dont.
Agh, sorry to hear about the overall loss. But hey, I think it was very noble to pay off your mom’s credit card. 🙂 FIRE is also about helping people and you’re doing splendidly. 🙂
Thanks so much Mrs PP! The future looks bright especially if I can continue helping others and reaching FIRE at the same time.
Impressive, even if you faced a challenge with the water pipeline busting you still managed to take care of the situation.
Why do you keep so much cash on hand right now?
Thanks Alex! The main reason I keep cash is because I need to be ready to pull the trigger on another fixer upper (rental property) at any given notice. I also like to keep at least $3k per property on hand for emergency situations. Then on top of that, i like to have have at least 10k for personal emergency situations.
Do you outsource your note servicing or do you do it yourself? If you do it yourself, how do you handle end of year tax documents for the borrower?
I have a note servicing company that does it all. They send out monthly payments, keep track of everything pretty much and they send me a tax document at the end of the year with all the info I need. I then give that document to my CPA and she handles the rest. The servicer also sends out the required docs to the borrower.
Well actually on top of that, I also keep track an accrual of all the payments, interest, principal and escrow paid on it since I first originated the loan and I also give that to my CPA.
Hey Alex, first time here on your blog and really liking it. I’ve been looking to invest out of state in Indy as well. I really like the cash flow opportunities there. Initially, I was looking at San Antonio, but property taxes are killer there. Plus not as much cash flow.
I’ve noticed Marion County in Indy to have pretty high property taxes. Are you investing in Marion County or outside? Which property managers are you using, or have used? Any chance you have an recommendations, as well as realtors that are good with investors? Thanks!