Net worth update.
Still tryiing to stabilize.. hoping to hear from bank next week on if they accepted my offer of $260,000 for the house and then I need to get the money. Once I stabilize w the house my goal is going to be saving and investing as much as I can.. kick my advisoring part time work into high gear. I am VERY light on retirement savings and this morning kicking myself major big time because of it but still proud I am back in the game (restarted 401k, roth this year) and other savings but really where would I have been had I not done that (wiht encouragement from this group). Was I am in la la land or what. Seeing that networthiq website really motivated me (and made me feel sortof bad) .. LOTS of people with $500k= in retirement accounts. I figured it out last night.
At 20%, $500k turns into over a million in 5 years.. but starting with $10ok (no contributions) i t takes 15 .
"this too shall pass"
PRAYING to stabilize and figure out this house thing or not.. very stressful to not know.
Networth attached. No big change which I guess is 'good' becaause I spent $12k + in extras and still managed to stay almost even but need more LIQUID cash!!
Archive for November, 2013
Net worth update.
Thanks to a tip by 'Jenn' (and check out her blog.. very neat stuff). I went to networth.iq and WOW.. what a wealth of information. advice and tips.
I suggest you look at it your self.. you can see others networth by age, income, all sorts of stuff .. see 'where' their net worth is.. VERY INTERESTING STUFF
What popped out at me (Miss making real estate income my main goal) is that I was more impressed w folks who had the bulk of their networth in saviings and investments vs equity in homes or rentals. I feel the same way even though my net worth is lopsided that way right now.
What was motivating was some people who had $375k net worth (again these were primarily stock/investment/retirement plan based networth folks) kicked it up to OVER a million in 5-6 years..so the time frame does not have to be long.. just keep learning and chipping away
After this house (my own) settles in some way I will focus primarily on stock based investing. already have a strategy.. so building up ROTH/IRA and general cash and investments is the goal once the house settles in some way.. either I buy or whatever... still $12k short on my emergency fund but feeling in general good today. Need to kick my side job into gear hear at some point.
This forum has HELPED SO MUCH keep me accountable and moving forward. Hope it has helped you guys as much as me. I have increased my savings, cut costs, started 401k, and roth just this year (after the 'downfall'.. haha)
About to save $1600/year on insurance costs among the 6 homes, 3 units by switching to Allstate. WOW!
I feel I am on the UP hill swing again.
Have a good day guys.. keep saving.. whittling away debt but invest too..
I am 43 and make $110k
Median net worth for my age $53k
Not out of the wood yet and PRAYING to stabilize.
1. got a good prospective tenant for the house.. should know today or tomorrow if Section 8 approved
2. Foundation guy did SHOCKINGLY awesome work.. house looks strong stable.. very pleased ($12k worth of pleased)
1. tree is off the roof ($500) + $1000 worth of damage.. upsetting but done! I have room here to raise rents and it runs very well.. just a hiccup.. I like my property manager!
SHORT REFINANCE-sad news
1. short refinance for $302k fell through. new FHA laws say there is a 3 year waiting period to refinance after a foreclosure... EVEN if you bankrupted out of the homes.. (why did the loan people not tell me this upfront) one of my past homes is still in forclosure and has no sold yet. Expected sale within 6 months. Loan cancelled
2. potential good news. bank agreed via phone (will have in writing next week) that they will STILL take $265k for the house (house worth $400)
3. The difference between my loan from the refi firm ($302k) and the banks acceptance reflects the upfront profit the refi firm was going to take. So if I can get the funds I will actually come out ahead! WAY AHEAD
Now I can (once bank puts acceptance in writing) buy the house for $265k but (due to above) can not get a bank loan (FHA or conventional). I have made several calls and hard money in Illinois on owner occupied residences is hard to get.. very hard.. have not and will not give up.. once acceptance is in writing will approach creative lenders and friends
I CAN buy within a year of the last sale and already fit (credit score etc) the criteria for an FHA loan expect the waiting period. Talked to brokers already
My 2 flat in foreclosure (owned w ex) I can get rid of within 6 months
I am able to pay 2 points and 5-8 percent for a loan for up to 2 years
If you have idea for hard money lenders or finance firms.. let me know.
House worth $400k (firesale), 700 credit score.. can prove income.
I want the home because it is a good deal and I want to settle long term
Put $1500 in the Roth IRA today!
Took entire $12k out of savings so savings down.. but retained entire homes/units emergency fund
PRAYERS the house rents this week!
Been reading Rich Dad Poor Dad and getting more ideas
I need to invest more, get the 6 homes/3 units cash flowing more and cut unnece expenses and make more money
I am 43 and want to be able to quit work in 5 years!
I am struggling here.
1. house foundation work will be complete tomorrow (that was the update Saturday) we just had a massive storm though.. PRAYING HOUSE IS OK
2. looking good for a renter in this place next week
3. also looks good to rent the garage separately.. means an extra #100 a month
4.short refinance is looking better.. not for sure yet but looking better.. (scary times). appraisal Thursday (should pass) and then I have to pay 3 trial payments in a lump sum(see below bad news) and then it goes to the underwriter for final approval and close date
BAD NEWS (keeps coming)
**I am feeling INCREDIBLY SHORT OF MONEY**
1. still have to come up with the $6k (rest of payment) for the foundation work
2. short refinance requires 3 trial payments.. 2 upfront $6k and one certified check brought to close
3.short refinance also rquires $11k 'buyer contribution'
4. a TREE fell across the 3 units. I have owned them less than 3 weeks and a tree falls on them?? crazy...They are insured but my deductible is $5k (more standard on rental polices).. looks like that
did not pay off.. so more money but talking to the manager and looks like here are the costs (1) remove tree (2) check roof and fix small crack in drywall (hoping there is no major roof damage!!.. roof new as of 2008). I am seeing the damage tomorrow..
Just keeps coming. I need to have these extra costs stop! and get some extra income and stabilize..
Too much money to have to come up with in such a short time frame... essentially $26k.. if you look I have only $30k savings....scary.. need to stop the bleeding
talked to my accountant yesterday (pre-tree falling) and I was feeling stressed then with the short refinance money requirements and he said (paraphrasing) you are trying to set yourself up in 5 years to retire.. it is going to be hard and you are going to be short.. just hang in there.
Vote of confidence felt good but SCARY TIME right now
need the rental filld and no more large expenses and to 'settle' and start saving again.
A friend owes me $5750.. hopig praying he comes through soon
Someone else owes me $5k.. asking for that too
and with the closing of the not for profit business.. I should get $8-11k..
Prayers!.. (looking around for stuff to sell now)
1. Do I do the short refinance on my house or let it go? All responses welcomed.
1. I can do a short refinance on my house for $302k, initial rate of 6.75%, payment $3200. $11,000 down
2. I can immediately refinance this (already checked) to 3.65%, $2400 a month
4. house worth $400-$410k
5. I have already filed for BK Chapter7 years ago so the house is off my credit report. If I 'let it go' it will be sold by the bank but have no impact on my credit. I have 2 years for that to occur but it will be stressful on me.
PROS of SHORT REFINANCE
1. no stress of not knowing how long I have the house
2. good deal on house
3. I need to live somewhere. I am not going to find somewhere for this much in the area I live in and rates may go up and I will have to have a significant down payment
4. house has been well maintained .. new roof, furnace etc and is 'known'
5. maybe get some house value appreciation as homes go up again
6. excitement of being able to 'live in the house' again. I feel like a boarder now and do not do much to fix it up etc. I guess thinking of having 'a' house or 'this house' fills me with excitmeent and joy. I have lived with instability for so long
1. I will significantly cut into my ability to save with picking up a house payment now if I do not increase my income to make up for this extra expense. I had not planned for one for 2 years more
2. Cut into savings now with the $11,000
3. I have a LOT in the air and things are stressful right now (one house not rented, just put $12k into a rental and =the 6 homes and 3 units are new to me still,though fully managed)
Mitigating factors. I can likely pick up extra cash with my side work to offset part of the cost. $1-2k). I expect an uptick in energy etc and joy witih being 'settled'
My heart goes with the house (and my accountant says it makes sense). My fear is that I am feeling unstable now.. though we have 4 showings for the house this week. If hte house was rented and I have more savings I would feel much more at ease
I think it is going to be fun to read back on this all (later)..so writing whenever I can to document the journey.
VERY BAD NEWS.
The excitement I felt with filling my vacancy?? VERY short lived.. an hour. Section 8 came out.. inspected and said the they would not take the house into the program. This is after the house being in the program for the past 10+ years. Guy said the walls were bowing in on one side. The house in on a hill. I drove out the next day to look and they were. I was told there were water issues and some bowing on the purchase but was also told they were stabilized (cringing.. pls no 'I told you so' or negative comments). Anyway.. turns out they were not stabilized. I got some quotes.. talked to several people and in short it will cost $12,000 to rebuild half a wall and put inside walls for the other two walls, put new center piers and regrade the whole yard and regrade the house next door (which I own). The house next door will cost $5100 to put an inside wall in there. I iwll do that next year or so. All this will be guaranteed by a long time contractor so I feel good it will be fixed for good and not come up again.
So...(stressed look).. the works starts Thursday..should be done by Friday next week. Have a potential renter we are screening now (non section 8). If she works great. if not we will open it up to Section 8 and non Section 8 after the fix. I need it filled asap. Bad time of year to rent property.. Upsetting!
Expensive lesson. GET a GOOD INSPECTOR!!! and evaluate all potential water/foundational issues thoroughly!
That said, I am relieved this is just to the 'expense category' now. but a large one
I am also relieved I had my $8,000 large expense, 6 homes fund which I will fully use up with this and need to rebuild ASAP
So. I need to come up with $4,000 in the next week (after the $8k) and it will come out of savings
**I did check the rest of the homes and the 3 units and no looming foundational/water issues**
POTENTIAL GOOD NEWS
Bank accepted the offer for the 'short refinance'. I have to formally apply for the loan now (will happen today) but if my income is as I said it was on the phone and everything else is hte same (and it is) the loan should go through. But will be nervous until it is 'approved' (week or so?0
I need to come up with $11,000 'buyer contribution' in 30 days and the INTEREST RATE IS 6.75!! I can refinance (and will) but will have at least 1 month or two (maybe more) of large payments at that rate. I will look into refinances after I am approved (but before I close) so the new refinance to lower rate can go as quickly as possible.
However.. loan appears to be low enough that I will already have 20% in. This is a niche loan and only one company does them so they dictate rates, feees, how it works but again no prepay penalty so I can refinance and need too. Payment is HIGH>
So. all in all this year is one of 'closing doors' and 'reopening others' and getting my financial house stabilized and on the right track. I am also closing my not for profit in these next 60 days.
Those who have read some know that I have had a rough 4-5 years prior and am just coming out of that to rebuild. I have a 5 year plan that is more risky up front but less as it gets further along. I am 6 months into that and hitting a BIG hiccup right now.
My plan right now is to 'gather this $20+k' for the foundation and short refinance, establish a tighter plan for the rentals ( I meet with both managers this week, save and EARN as much as I can and rebuild that savings immediately. I can not go with out a fully funded emergency fund and large expense fund across the homes and 3 units. I want to STABILIZE right now and get things under control.. too many balls in the air.
More later.. just unloading and catching folks up.
Thanks for reading.