Tag Archives: personal finance

December Equity Numbers

Numbers as of 12/01/2011

Total Cash $62,000.00

Total Real Estate $270,000.00 (140k Primary Residence, 60k Rental 1, 70k Rental 2)

Total Retirement $11,200.00 (Vanguard Roth IRA)

Total Mortgages $202,000.00 (Primary Residence, upside down 177k, Rental 1 35k)

Total Other Debt $15,700.00 (Student Loan)

Total Equity $125,500.00

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Rental Property Timeline

I’m excited. This morning I figured out a timeline for making us 70k in passive income in 2 years. It’s ambitious, but I think it can be done.

Basic information is that it costs 50k to buy a rental property that I’m comfortable with (this is the total including repairs, purchase price, and other costs). Paying 50k should yield 1k per month on average for a rental price. Subtract from that management fees, taxes and insurance and I net $700-$750 per property if I pay cash, minus any repairs that might come up.

I already own 2 which have nice tenants and have not caused any issues so far. I bought them for cash so there is no mortgage cost. I’ve been debating about taking out mortgages so I can buy more. I never used to believe in it, but if the mortgage on a 50k house is $250-$300 per month, and the rent is $1000, I really feel like I can’t go wrong.

Here’s the timeline: (each number represents one rental in the order I purchased/will purchase)

May 2010 – 1 – Cash

June 2011 – 2 – Cash

November 2011 – 3 – Mortgage 1

January 2012 – 4 – Mortgage 2

June 2012 – 5 – Cash

August 2012 – 6 – Mortgage 3

November 2012 – 7 – Mortgage 4

February 2013 – 8 – Cash

June 2013 – 9 – Mortgage 5

September 2013 – 10 – Mortgage 6

Because I can’t finance the new purchases I’ll mortgage the rented properties and pay cash for the new ones. Net $500 per mortgaged property after expenses, $750 per unmortgaged property after expenses = $6000 per month across 10 properties. Will there be expenses here and there? A new roof? Broken pipes? Electric problem? Water heater issue? Crappy tenant? Of course. I’m hoping to lower my risk by putting newer systems in the properties with my initial 50k investment and buy in nicer neighborhoods similar to where my current properties are.

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Mom Intro

I’m a new mom with a 6 month old daughter. We’ll call her B. I also have a wonderful husband who will be Dad. Although I’m a mom, being a mother is not the over-arching term that defines me. This is about my navigation of a world that’s obsessed with money but afraid to talk about it.

More importantly, it’s about my quest for $1,000,000.00 in equity. Right now I think I can do it in 10 years with real estate. I own 2 rental properties which I purchased for cash over the past 18 months.

Here is the breakdown of what Dad and I bring home:

Dad – 85k salary since June 2011
65k salary from May 2010 – May 2011
Grad school before that
Mom – Self employed real estate agent
– 2008 ~ 75k after expenses
– 2009 ~ 140k after expenses
– 2010 ~ 140k after expenses

We live in Atlanta, GA where cost of living is relatively low. We live on a budget, but the budget is high. I’ll be completely honest about our income and spending, what we spend on, where I think we’re messing up, and where I think we’re doing well. I’d love it if others would weigh in on how much they spend, how they are reaching their goals, etc.

Let’s open up an honest conversation about money and hoist ourselves out of this economy by our petards! I’m aware Dad and I make more money than most. I want to know what you’re doing within your means to plan for your future, spend, and enjoy your time now. Can’t wait!

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