Wednesday, July 5, 2017

Goal Update: End of June 2017

At the end of each month, I post an update of my goals, including a brief discussion of any notable events that might have occurred during the month. The latest month's figures can always be found under the Featured menu in the menu bar at the top of the blog.

Last updated: End of June, 2017
Current value: $32,282
Change from last month: +$697
Percent of Goal:  29.69%

Note that the funds in this account are invested in stock, so there will be fluctuations in value that are outside my control. I never withdraw money from this account, so any dips are purely due to stock price changes.

Events Of Note Last Month:

I saw an increase of $697 this month. Net income from my online courses was $100.50. My hard money loan generated $177.17 in income, which is a bit more than normal. See below for details. I received a check for $8.51 from a class action lawsuit settlement. I received $50 in gifts and I turned in a bunch of change for $58.45.

My hard money load was paid off, which means I got my principal back, plus some partial month interest for June. Normally, I would just leave this money with my partner and he would roll it into another loan. However, our biggest borrower has semi-retired, so we don't have as many requests for loans these days. My partner, who also works with other investors, has about $1.5 million in cash waiting to be loaned out and, as a result, he opted to return people's principal when this loan closed because he has no use for it right now. Business has shifted from lots of little loans on properties in not-so-great areas (the ones our biggest borrower specialized in) to fewer but larger loans on properties in nicer neighborhoods.

So now I'm looking for a place to deploy my funds. I still like the money lending business and I am looking at RealtyShares as a possible alternative. A couple of other bloggers I follow, Financial Samurai and Financially Alert, have invested with them. Their initial reports were positive, but I emailed them asking for a follow up to see if their opinions have changed.

One of the things I am concerned about is preservation of capital. If an investment goes south, I'm OK with getting a zero percent overall return as long as all my principal is returned. My hard money lending partner is also very concerned about this and the loans he makes are always at 75% loan-to-value or lower, so if the borrower does stop paying, we can foreclose, sell the property, and still get all our original investment back. I've got a 15 year track record with him. Investing with someone else brings a new set of risks and unknowns. How confident am I with their borrower screening process? With their property valuation methods?

Relocation Update

My house has finally sold! The official close of escrow is August 3rd. The contract was just accepted, so we still have to get through the home inspection. My buyer is pretty solid, so I'm not worried about him not getting a loan. He's pre-qualified for a $250,000 VA loan, but he's making a large down payment and will only need a loan of about $100,000. He put up $10,000 in earnest money, which is a large amount. His offer is also not contingent upon him selling another property. So basically, once we get through the home inspection and come to terms with whatever it finds, the sale should be pretty much a sure thing.

Net Worth Update 

For June, our net worth dropped by $7,788. This is the first time it has dropped since October 2016 and only the second time it has dropped since I've been tracking it.

May 2017June 2017
Note: categorizes our HELOC as a credit card debt, not a loan, hence the apparently high credit card balance.

It's hard to determine where the drop occurred from just these numbers because I'm in the process of moving money around. Because my hard money loan ended and my principal was returned, that money moved from the Property category to the Cash category. From my examination, it looks like the drop has mainly come from a decrease in the value of my house.

My net worth is going to jump around a lot the next couple of months. I'll be selling my current house, which will cause it to jump way up. Then, a little bit later, we'll be buying a new house in Washington, which will cause it to drop quite a bit as we take on a much larger mortgage. It's going to be a bumpy ride!

If you have any questions or suggestions for topics, please drop me a line in the comments section!

1 comment:

  1. Thanks for the update. It's unfortunate that you net worth dropped, but things ebb and flow so it'll be back in no time!