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Current status

October 8th, 2013 at 01:12 pm

Quick note on current status towards goals

Goals are numbered to the left. My whole plan is based on the idea of 'sow seed/sacrifice' now.. 'reap later'.

1. I have acquired 6 homes in Joliet a few months ago..they are on a 5 year amoritization. Pay off date 5/18. They would net $3500 if paid off now so I will assume they will net that amount then.
I close on a 2 3 units also in Joliet that are on a 7 year amoritization and with $60k will be paid off in full in 5 years. I plan to come up with the $60k 5 years from now to do this. They would net $2300 now if paid off and will assume they will net the same then.

Both sets are fully managed and have an associated budget. I can share that if folks are interested. Both will require between $300-700 cash outlay each month to meet the amortization. In other words. they are negative cash flow and may be through the entire 5 years though we are already raising rents on the 'joliet 6'

**these are the last buildings I will fully amortize over 5 years, though I plan to buy more because I am short of my $8000 target in 5 years. Note my plan is calling for no cash flow now.. all cash flow in 5 years

2. I have $83,000 cash. $45k will go towards the 3 units in 3-4 weeks

3. I have health insurance. Federal exchange

4. I am trying to work out a 'short refinance' on my own home right now w the bank. A 'short refinance' is a special sort of loan like a short sale except YOu keep the house. It wipes out all overages and allows you to buy the house at market rates, market value. House is prob worth $430k. We are negotiating at $350k right now. (fingers and toes crossed and prayers).. Note: this extra expense was not in the 5 year plan right now.. so still working out how to do this so as to not impact the rest. I need to 'plant seeds' now and not take on excessive monthly payments. I would buy the house however as I will have built in equity, it is really nice and it is 'known'. New roof, furnace etc and I know the house.

5. On the 2 sets of homes/buildings alone at current market value (price I paid) I will have $500k equity in 5 years

6. I have 2k in this fund and need $16k. I work on contract and was just extended til June 2014 so will work on this in the next 6 months. I can not take on the home (my own) without this fully funded by then

7. I have properly escrowed the 'Joliet6' as I call them w $6k cash and a monthly $500 allotment. Need to escrow $6k for 3 units by Dec 1. Monthly repair allotment already built in to 'budget'

8. 2008 Tahoe paid off. Genesis on track to pay off 8/2015 at doublepayments but I may delay that.. unclear??


This is the current status. I will update each month. Note if I extend out the 5 year plan..I am short on income (which will translate to that $300k savings) so any more real estate will be bought with the idea of cash flow now . I am also seeking ways to gain more income. I make $110k now at work and have $2k/month coming in from a rental (which I am going to let go.. and will likely lose between 6 months-2 years from now.. to the bank).. currently with an attorney who is attempting to delay the foreclosure suit as long as possible.


8 Responses to “Current status”

  1. TashaC. Says:
    1381238513

    Wow. I might need to read this 5-6 times to understand the picture. You have a lot going on. A lot of HUGE purchases in a short time frame. And you can pay them all off within the next 5 years? If that's the case then I understand the negative cash flow perspective. I know the market up there is depressed...is Joliet also very very depressed? My husband has been there to play ind. pbaseball and said its kind of rough-but that was a long time ago. Are you leaving yourself any money in the event of a LARGE expense on your primary or with these properties? Sorry so many questions. I'm just very curious about moves as aggressive as yours and all the ins and outs.

  2. Rachael777 Says:
    1381240536

    Tasha.. not sure if I respond here or in an entry (let me know. I am a blog newbie). Joliet is a working class area with some parts not so good.. some parts very nice working class and a small part w nice luxury homes. Overall though it is known as a working class town. Rents do not vary as much as housing prices across towns. so a working class (stable) area is usually a good place to invest as rents cover the mortgage more. The homes in Joliet and 2 3 units are in moderate working class areas out there so should be solid.

    And your point about having money for emergencies and large purchases is a good one. I am tight with that right now but not in trouble. 'Joliet6'-- I researched large cost outlay possibilities (roofs, water heater etc) and came up with a $6k cushion (not to be touched) and $500 month escrow (all funded in budget). The 3 units will have the same (will have $6k by Dec 1). I have $2k for me right now and need to build that to $16k but am saving each month. Cars have full warranty. I have a new roof, furnace and ac and insurance..so trying to cut risks but definately need more cash in the bank. I expect 3 months of 'settling/smoothing out' after the 3 units come on board and if I buy this house.. so just working through it.

  3. momcents Says:
    1381246005


    Is the pending foreclosure on the primary residence that you are trying to refinance? Is the primary residence also in Will County? I agree that Joliet is certainly a mixed bag when it comes to neighborhoods. We've been to the Cathedral of St. Raymond and like the historic homes in that area. Outer areas, intersection of 355 and I-80, very scary ...

  4. Rachael777 Says:
    1381247872

    Pending foreclosure on my 2 flat in Naperville/Dupage County. I am likely just letting it go though I will try for a balance reduction but current loan balance does not allow for net profit at the market rates.

    My home is also in Naperville and I am trying a 'short refinance' (praying and Excited for.. hopeful!) Smile

  5. momcents Says:
    1381248147


    Is the short refinance similar to a loan re-modification?

    I'm in DuPage Co. as well (primary and rental are in Downers Grove) and I'm happy with the rate of increase in home values here, but probably not enough to hold onto the rental for much longer.

  6. Rachael777 Says:
    1381249431

    I just got off w my attorney (on 2 flat) and he wants me to pursue HAMP and balance reduction (Justice Dept settlement) w Citi and the short refinance for the 2 flat.Short refinance is not a loan modification. It is true specialty mortgage firms (certain type of loan)and allows you to buy the house at market value and market rates (if bank agrees). You go back and forth w the bank though like in a short sale. I would keep the 2 flat with the balance reduction

  7. momcents Says:
    1381250055


    From what I (limited) know, Citi is willing to deal with individual homeowners rather than face foreclosure. A friend had a first and HELOC with Citi on a condo in Lisle with greatly deflated values. She was able to write the HELOC in her Chapter 7 bankruptcy based on the most recent property appraisal.

    Good luck to you!

  8. TashaC. Says:
    1381268551

    I had not heard of short refinance before. A new trend hitting the banking world. Keep us updated!

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