November Portfolio Allocation

When I posted my November Net Worth Index update, I did not include my total portfolio allocation. I wanted to follow-up and run through this as part of my monthly update. It is always a good idea to do an overview of how your entire net worth is allocated to ensure that you aren’t exposing yourself to too much, or not enough, risk.

I’ve read a lot lately about people taking money out of stocks and moving it to cash and bonds. But is that really a good idea?

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Buying Another Rental Property: Finally Closed!

I finally closed on my rental property this past Friday. It was a very smooth experience. I was only at about 80% confidence that the deal would close.

My experience with real estate is that you never know what is going to come up. People get lost on the way to the title company, the financing get’s pulled at the last-minute on a technicality, or the seller can get cold feet.

But thankfully, this time none of that happened!

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October Net Worth Index Update

It’s that time again, time for another Net Worth index update.  This should get more and more interesting as time goes on and there is more data to chart. Over the coming months I am sure a story will develop. Because I am a proponent of extreme investing, I believe that these updates will be very interesting at some point. That is just a function of the leverage that I’m using. Hopefully, the leverage will work for me in a positive way and not a negative one!

This month there is a lot going on even though the index value is fairly stable.

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100% Financing

This month I’m trying to buy another rental property.  I’ve been thinking through how to do this with 100% financing but I haven’t made the effort to look for private funding yet.

Private funding is when you get a loan from someone you know rather than getting a loan from a bank. The good thing about it is that you don’t have to deal with a bank and the stringent lending standards most banks follow.  This lets you and the person lending you the money work out the details of the loan and the interest rate.

Private funding is great for the lender as that person is able to get a high interest rate on the money they lend.  For instance, lending to a real estate investor at 8% interest is much better than having that money in a checking, savings, or certificate of deposit account.

But since I haven’t done the work to build up a list of people willing to invest with me, I am working on trying another method.

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Preparing for Another Rental

I have been working towards buying another investment property for some time now. I want to buy one by 2017 and I think I’m about to succeed in the month of October (or maybe November). I’ve written about the two houses that I didn’t get when I was using a real estate agent. I also wrote about my adventure on memorial day where I spent a lot of time researching a house offered by a wholesaler. But I think this one is going to work out!

One of the things I have been learning at work lately is how beneficial it is to plan ahead and to have a backup plan if the situation changes on you suddenly. So I’m writing out some of the steps I’m taking to plan for adding another investment property to my portfolio. Maybe some of my readers can offer improvements on these as well! I’m always open to suggestions.

So here are some of my thoughts.  Continue reading “Preparing for Another Rental”

New Tenant!

As I have written before, I have a rental property about an hour from my house. It isn’t the best investment but since I used to live there with my wife, I decided not to sell it and let a tenant pay off the mortgage.

I use a property manager for this rental, partly because of the distance to my house, and partly because I don’t enjoy working on houses. You really should read my story about the 10 reasons you should use a property manager! It’s pretty funny and hopefully it will keep you from  trying to manage a property from a long distance.

When I first got a property manager they were able to find a tenant within one month. Finding a tenant that fast was really a good result considering we had previously had months of vacancies.  But this past month our tenant left so we were left with another vacancy!

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Allocation Shift

I wanted to give a quick update on some things I discussed in the post where I discussed my net worth goal. If you remember, I didn’t reveal the dollar amount of my net worth goal but rather created an index to measure the change in my net worth. This will allow me to share my goal and progress without having to reveal the details of the actual dollar amounts.

I also discussed in that post my net worth allocation. I don’t always see other net worth posts reveal this so hopefully that will be an interesting thing to read about as well. Looking forward to the feedback on that.

I wanted to talk about the allocation in today’s post.

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The House I Did Not Buy Monday

This is the story of how I spent six hours on Monday deciding not to buy a property advertised on Craigslist. It was quite an adventure but I ultimately had to pass on it. It all started on Saturday night when I was browsing some properties and noticed a townhouse advertised as two separate units with separate utilities and addresses. I thought, “Wow – this multi-unit could be a major rent producer.”

Here’s what happened.

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Vacation Rental Property

Right now I am in North Topsail Beach on Topsail Island.  Check out the picture farther below.  This place is beautiful.

One of the things that I’ve noticed while running this morning and this afternoon (this place is great for running) is that there are several beach houses for sale as well as lots. Some of the buildings for sale contain three or four houses and the whole building is being offered. It makes me wonder if there is a problem with this part of the Island or if there is just frequent turnover? I can’t imagine anything wrong with living here as the weather has been beautiful and the beach is absolutely pristine. It could be that sellers list their houses in the spring before the summer rental season. Continue reading “Vacation Rental Property”

Asking for Money

I’ve been thinking about this topic a lot recently.  Asking for money. Private Funding for real estate is what I am interested in. I’ve done some reading about the topic and it sounds like a really good way to get financing without the drawbacks and absurdities of using a bank.

The great thing about this option for me is that I do happen to have some connections who may be interested in lending me money for real estate purchases.

I wanted to lay out some thoughts on what are some of the best ways to basically approach someone and ask, “hey, would you be interested in lending me $100,000 or so?”

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