Sunday, 19 April 2015

$2,998,158 My Net Worth Update April 19, 2015

My Net Worth Update April 2015


    April 19 / 2015  : Updated every mid month

    ASSETS

 -Primary Home
 2015 assessed value  $1,253,000
  $500,000 mortgage at 3.35%                    Equity Total:               $753,000
 
-New Buliding Lot for new home 
Purchased for $560,000
6000 sqft building lot 2015 assessed value           Total:                $648,700

-Commercial Rental Property
Warehouse 2300 sqft Income Property 2015 assessed value
                                                         
                                                                               Total:                 $319,000
 -Residential Rental Property
Rental Home 3200 sqft Income property 2015 assessed value
                                                                               Total:                 $667,000

-Start Up Company
Brewery start up share value
                                                                               Total:                   $85,000

-Equity Investments
Tax free saving account TFSA -                 $42,649
Retirement saving plan RSP -                  $141,272
Canadian margin account -                      $134,832
US margin account ( Ex Rate 1.222)-      $192,567
                                        
                                                                   Equity   Total:                 $511,320


-Cash                  
Checking account                                         $2,306
Business account                                        $11,832
     
                                                                               Total:                   $14,138

                                                                  

                        
                         January 2015 Grand Total Net Worth:      $2,998,158



                                                Gain/loss from last month +$104,860
 

Mar.   2015  :$2,893,298 Details Link      -$3,307
Feb.   2015  : $2,896,605 Details Link +$725,060
Jan.    2015  : $2,171,545 Details Link   +$44,214

Dec.   2014  : $2,127,331 Details Link    -$33,547
Nov.   2014  : $2,160,878 Details Link  +$49,867
Oct.     2014 : $2,111,011 Details Link  - $28,473
Sept.   2014 : $2,139,484 Details Link + $13,390
Aug.    2014: $2,126,094 Details Link  + $14,613
July    2014  : $2,111,481 Details Link   + $5,584
June    2014 : $2,105,897 Details Link   + $3,165
May    2014 : $2,102,732 Details Link





In Summary-



  Lots going on this month. First and foremost I have purchased a new home. It is an old 1930,s home that's 2 bedroom and one bath. Its in rough shape and prime for a tear down for a new home build in which I am in the process of doing. This month has been monster with a $104,860 gain. $88,700 has been from this new home purchase as I bought it far under value. the rest of the $16,160 has been from portfolio increases, stock dividends , options premiums and rental income. So close to breaking 3 million which I did not realize it. Maybe next month.

I was house hunting for quite a while and this place kind of fell on my lap. My friend secured the lot last year and was going to build but certain issues came up for him and he couldn't close on the place and he offered it to me as he owes me a few favors as I have lent him money in the past interest free. We did a handshake deal at that was that. Closing costs (taxes, lawyer) were a smidge under 10k so basically I am all in for 560k. At 560k the place is a steal as assessed value is 648k and probably real current market value at about 620-635k. I could flip the place right now and clear 40-50k after selling costs. That of course would be subject to capital gains.

Now I am in a conundrum. I am holding too much real estate 2.38 million worth to be exact. I actually hate real estate. I hate dealing with the hassle. To tell you the truth I rather just hold REITS (Real Estate Investment Trusts) instead. So the plan now is to fix up my home a little bit and put it on the market in next couple months. Also I will be putting up my 2300 sqft warehouse for sale in the next few weeks but I am worried the market is very slow for it as I had it listed two separate times with no bites. My final residential 3200 sft rental property I plan on getting rid of too but not until next year.
 

Reason for selling everything but my primary is that I like to be liquid. I rather have a monster income equity portfolio worth 1.7 million filled with Reits, MLP,s , preferred shares and high yielding stocks yielding an average of 6% that will rake in $102k or $8500/month before taxes that is far more tax efficient than investment hard real estate income and much more worry free. Also it will be a much safe diversified choice.

I should also walk away with a pretty penny after my home sells. I expect to walk away with $1,325,000-1,375,000 once it sells as I have been studying the market for quite some time. The new home cost me $560,000 plus building costs which I have estimated to be around $540,000-$590,000 at the most which puts total cost at about $1,100,000-$1,150,000. So I should be walking away with about $175,000-$275,000. Also the new home value once completed will be worth based on new home comparables in the area of around $1,475,000-$1,575,000. A potential 350k profit is something I don't mind moving my family around for lol.

If all goes to plan I will live in this new home for a couple years and sell it to cash in and start the process over again. I used fairly conservative numbers as I know nothing in real estate usually goes according to the plan. I did not take in account carrying costs of any kind or dips in the market. Very possible I could be carrying close to a million dollars in loans before my current home sells which would equate to 30k a year which will eat into profits. Yes huge profits (20-30%returns) are to be made developing homes for sale but they also carry many risks.

To finance the new build of 540-590k I have to come up with some money. I have a few options right now.

1. Sell all my stock.  I really don't want to do as I am getting good money from the dividends and options premiums. I will be using some of my margin equity out of my stocks but I have to be careful especially if I am playing options.

2. Sell some property. I am going to list my home and warehouse soon so hopefully I can time it right. Downfall is that I might have to rent a new place for a few months which I hate the idea of especially for the kids sake.

3. Private Loans. I have a few people that offered money at certain interest rates 4-6%. Right now its a good option but I dont know if I can get more than 300k from them.

4. Get more conventional loans. This is my last resort right now. The amount of hoops I had to jump through to get my current 500k loan was such a headache that I never want to go through it again. Plus their rates are only slightly better than private loans. Also you have to worry about closing costs on mortgages that boost their total costs even more.

I will probably wind up doing a combination of most of these options going forward. Right now I got 200k lined up in a private loan for the start of construction.


                  Here is me working on one of the many revision sketches of the upstairs floor plan

In other news

The brewery hit a few snags with the equipment not working properly and is in the process of getting fixed. It has pushed opening date back a month to May. I haven't been to involved lately with it but I will more so going forward.

In family news my nephew that is staying with us is doing alright. He struggles with homework, school, puberty but we are doing are best. Its a challenge and has increased stress at home accordingly. His mom seems to be getting some help with her drug addiction and seems to be going in the right direction but you never know with these things. Still no definite on how long we will care for him. Until then we treat him like one of our own.


I know my posts have slowed quite a bit but I have just been so busy lately but worry not I will continue updating things. Till the next post. Good day and Grind on!


30 comments:

  1. Being liquid is a beautiful thing, I heard. But why would you sell your commercial property? It's cashflowing probably better than any REIT, no?

    ReplyDelete
    Replies
    1. rate of return after tax,strata is 4.48%. Thats when everything goes smooth too. Doesnt account for repairs( which are minimal, turnover, some maintenance). I can find great Reits that yield 5% plus, Plus it would be more diversified real estate as well.

      Delete
  2. Wow! Over $100K increase in net worth in a month?! Thats mind blowing...I can see how the things compound and each $100K, or a $1M gets easier over time.

    R2R

    ReplyDelete
    Replies
    1. Hopefully we see 100k gains on the regular. Lol one day!

      Delete
  3. Hey AG. Awesome bud. Glad to hear everythings going good. You're doing awesome! I like the sound of that 1.5 Million dollar portfolio shooting out hella Dividends. SWEET! We know your busy so worry about the family and life first. Posts and blog is your hobby and do it when you can. It's all good. Take it easy bud. Glad to hear you hustling hard. I Love it!

    ReplyDelete
    Replies
    1. Thanks for the support buddy. I will catch up on things soon enough. Good to see your blog still going strong!

      Delete
  4. Hey AG. I nominated you for the Liebster Award. http://dividendhustler.com/liebster-award-nomination/
    Hope you can share with us some questions when you are free one day. :) cheers!

    ReplyDelete
    Replies
    1. Thanks buddy , will answer the questions today

      Delete
  5. Nice looking floor plan. That master bedroom is a decent size. :) I have the same dilemma about being overexposed to property, especially with 2014 being another great year for Canadian real estate and farmland. One option I see other people do is to use a HELOC to finance long term investments. It's kind of like what you're already doing with your margin trading account. This way they don't have to divest their current holdings, but still raise capital. However on the other hand, who knows when interest rates will rise, so this strategy is a little more risky.

    ReplyDelete
    Replies
    1. I initially tried for a Heloc but rates were over 4% for me :( The banks dont like the grinder lol. They dont like being told what to do. I feel like a slave borrowing money as they serve as masters. Oh well thats how life goes. You either the hammer or the nail !

      Delete
  6. That's a nice looking floor plan. Over $100k increase is very impressive, you're definitely rolling when it comes to net worth. Keep up the good work.

    ReplyDelete
    Replies
    1. You not doin too shabby either. Especially with your monster portfolio!

      Delete
  7. Wow, these numbers are truly amazing. How did you get to starting up the brewery? I am really interested in getting into real estate and opening up my own business. I am still young, and I'm in school and I'll be in debt for a long time after. But, I do invest my money in div stocks, and I plan on buying a house before I am 25. I've been following your blog for a while now! I'd really appreciate any advice!

    Thanks,
    D2R

    ReplyDelete
    Replies
    1. The brewery was kind of just luck really. I took some business classes at a local college and there was a guy in their doing the same. Turns out he was working on his business plan and I told him I will take a look. I looked into it and did my due diligence and it all checked out. I met all the people involved and I was comfortable with the investment. I decided to throw my hat into the pool as well so we will see how it turns out.

      You are still very young and no need to rush things. When the time is right it will happen. Dont be afraid to take risks in life. Dont be one of those guys that say shoulda,coulda, woulda. Go out there and try and hit a homerun. Challenge yourself financially and makes things happen. Best of luck buddy.

      Delete
  8. I find it very refreshing to read that you hate real estate and the hassle associated with it. Quite frankly, I happen to agree with you in that respect. Too often you read about how RE is so passive, buy a rental property, rent it out and enjoy your time on the beach. I know it's not like that as I have owned many homes in the past and fully agree that if you want real estate exposure theer are more than enough REITs out there to suit whatever taste you are seeking. Apartments, storage, healthcare, commercial, industrial, timber even! In any case, you had a busy month and your progress is great and financial diversity too. When can we taste a brew sample by the way?

    ReplyDelete
  9. Nice floor plan. Did you hire a building company or are you overseeing the project yourself? How big is the total square footage of your custom build house? $540-$590k for custom build house seems a little on the steep side, I guess you're using really good quality materials. I'm interested as we're thinking of tearing the old house and building a new one. Don't really know where to start and just looking for the best lowest cost options.

    ReplyDelete
  10. Holy Cow. You are hitting $3M. Wow Keep up the great work. I got lots of catch up to do!

    Cheers!

    BeSmartRich

    ReplyDelete
  11. Damn AG!

    Isn't making money easy when you've already got a big stash to start with? Thats a powerful position to be in and hope to join you at that level in the near future!

    Congrast on the new home purchase! Keep us updated on how you like it!

    ReplyDelete
  12. Congrats on the new house! And it seems that you still have a lot planned out to add your own touch to it. Real estate is always a great place to start, as there are a lot of things you can do to make it a home that you can be proud of, which also ends up increasing its value over time. Though it can be quite fluid, you can more or less get the grasp of it, the more you familiarize yourself with things. Anyway, good luck with the constructions!

    Emily Cassolato

    ReplyDelete
  13. AG,
    you're definitely the ruler of all net asset grinders. I'm looking forward to your may statement. My bet is - you're making another million since last may. Unbelievable and very inspiring!! Thank you for sharing!
    And I have to agree with DivHut - it's relieving to read, that owning real estates are not worth the hassle as a "passive" income. This convinces me even more to invest and diversify into REITs.

    Best of luck to you!

    ReplyDelete
  14. AG,

    Glad to hear everything is going great over there, although things seem to be really busy!
    As you know, I'd love to read more about the brewery, so I'm looking forward to your opening.

    Cheers,
    NMW

    ReplyDelete
  15. Impressive portfolio. Definitely real estate heavy, hopefully your brewery goes well and you see some big returns on that.

    ReplyDelete
  16. Love the portfolio AG, great stuff. I was chatting to a buddy the other day who has a million dollar house ( and a million dollar mortgage to boot ) - he said, i'm done with it, gonna buy some REITs instead as he was sick of the fees, strata, maintenance etc...kinda smiled when i read your comments on it. I've owned some REITS for a couple of years now, couple of them did turn out shakey unfortunately but most are pretty solid...still gotta do some work but i have never owned a home, i don't think i ever will unless i end up with too many $$...first world problems. cheers T

    ReplyDelete
  17. Congrats on your purchase. Thanks for laying out the budget breakdown for this purchase clearly, so that we'll have numbers with which to base our own personal calculations with. It really is advisable to be able to truly scrutinize a house purchase and to look at all their aspects and attributes.

    Naomi Walters @ Chicora

    ReplyDelete
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