NW Update – May 2021

Another month and another Net Worth update! May 2021 was the month of real estate. We had 3 closings this month. After spending months trying to find any deals in real estate and falling flat I finally found the key to success in our current market. Purchase properties from investors that come with leases. Retail buyers don’t even consider these properties that they wouldn’t be able to take possession of for up to 2 years based on a lease.

Our net worth got a large injection by becoming vested in my public employee pension and then 50% of the bump came from investment returns. Who knows when this insane bull market will end, but with 4 rental properties I feel sufficiently more prepared for any downturn than I ever have before.

I’m still toying with the idea of including our vacation cabin in our net worth calculations. It’s a small enough % of our total NW that I really don’t think it matters either way.

Assets
Real EstateValueMonthly Income
IA Rental 3818$130,000$1,050
CO Duplex 1060$580,000$1,000
IA Rental 55th$125,000$1,200
IA Rental 15th$155,000$1,200
Cabin$55,000N/A
Real Estate Total$990,000$4,450
Tax Advantaged AccountsValue
457$77,800
401k$64,300
IRA$77,200
ROTH IRA$58,200
Spousal IRA$37,000
529$16,500
Pension$55,700$20k change from becoming vested!
Tax Advantage Total$386,700$500,000 goal
InvestmentsValue
Brokerage Vanguard$74,000
Brokerage WeBull$12,100
Crypto$46,000
Retail Business$415,000
Total Investments$547,100
Cash/SavingsValue
Checking$12,000
Real Estate Checking$7,000
Sold business note$17,000
Total Cash/Savings$36,000Spent over $100,000 on real estate this month!
Total Assets$2,014,800
LiabilitesTypeAmount
Mortgage CO DuplexMortgage$399,000
Business buyout loanBusiness$93,000
Mortgage IA 55thMortgage$95,000
Mortgage IA 15thMortgage$95,000
Total Liabilities$682,000
Total NW May 2021$1,332,800

Increase/Decrease single month
$64,000

May 2021 Goals and reflections

  • Set ourselves up to max the 529 each year for the next three years. (already done for 2021)
  • $2,000,000 NW by April 2024 – May21 update- Consider moving goal posts to quit F/T job. Other avenues to get health insurance to cut 1-2 years off. Rental property income is strong and won’t make the NW goal as important.
  • Closed on 2 rental properties in May 2021. I am not actively shopping for investment properties. The market is not great for remote buyers.
  • Invest $50,000 additional into CO Duplex in improvements to create a better income property by April 2023.
  • Invest $25,000 in cabin by April 2023.
  • Continue to max 457 and 401k until April 2023 – get pre tax to $500,000

Things to note for the coming months of 2021.

  • I’ve already achieved a June 2022 goal related to rental properties. I’m going to slow down and think through next steps. With the current real estate market and us having $1mil in real estate; building up cash to purchase aggressively in the event of a turn down might be a better play. If the market continues to rise then we are still doing well with a large real estate portfolio and if the market takes a dump then we have the cash to buy up entire city blocks.
  • Look into a Solo 401k or SEP IRA for my business income. I’m finding the rules extremely complicated with our situation – Single earner, many sources of income. The IRS has lots of avenues to tax shelter massive amounts of money and now is the time to put energy into that.

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