2014 Year in Review

The end of the year is approaching so I figured I would throw out a quick update on how things have been going during these busy times.

Interest Paid:

Since the student loan is paid off and all mortgage payments completed for the year, I was able to calculate total interest paid for 2014. This year $7917.57 went to the banks in the form of interest, vs. $9060.63 last year.  This represents a significant 16.82% decrease!  Its a good feeling knowing that $1143 additional dollars went into the equity of the properties rather than the banks. 

Debt Levels:

Regularly paying extra on the Victorian House 1 mortgage has brought the debt levels down this year.  The beginning of the year I had 77.52% of original debt.  12 months later, I'm now at 68.79% of original debt, resulting in a 8.73% decrease.  With all things being equal, I would be debt free in about 8 years from now with a repeat of 2014.  But all things aren't equal.  Every mortgage payment contributes more to the principle balance than the previous, thus pushing that debt-reducing snowball faster down the mountain.


Dividends:
Aside from rental income, dividend payments are my favorite things to look forward to every month.  2013 ended with an average $141.43 dividends received monthly.  Right now its looking like an average of $184.96 will be collected now.  This represents a 30.77% increase in monthly dividends.  Very good news here.

Rental Income:
Rental Income has remained stable this year.  There may be a slight increase in gross rents in 2014.  Thats the wonderful thing about having rental properties.  I can set how much income I'm collect every month.  How many of us can go to our day jobs and tell our bosses that we will be increasing our paychecks going forward?  Probably none of us.


2015
Next year will be an exciting year.  The dividend portfolio will be reduced in favor of a greater cash position.  Then when the opportunity arises, a fourth rental property may be purchased with cash.

August 2014 Update

Its been a few months since I published my last post.  The daily job has been very demanding and time-consuming.  As you can see from my tomato garden above, I am behind on work around the house.

As a result of paying off my student loans and further reducing monthly expenses, I have initiated more positions in the stock market.  With the market being over-valued in general, I only plan to use these positions as a place to park cash until I purchase the next rental property.

Here is a monthly passive income snapshot:

Average Monthly Dividends = $184.71
Average Monthly Real Estate Cashflow = $613
Average Monthly Lending = $9
Total Monthly Income = $806.71

If things go as projected, I should be purchasing an additional rental house during 2015 with cash.  I expect average monthly dividends to drop by 80%, while increasing rental cashflow by about $400.  This will be the tipping point for my investing adventure, as this would represent the point where passive income will cover all monthly expenses, and then some!

Milestone Reached: Student Loan and Medical Debt paid Off!

Things have been slow and steady lately.  I've been focusing on paying off debt while I work on things around the house.  This month I finally made the last payment on my student loan and medical debts.  This is a huge accomplishment.  Saving me about 300 bucks a month!

I will now focus on paying off "Victorian House 1."  Luckily this has the lowest balance and highest interest rate.  I plan on having this done by mid 2015.  Whats exciting here is my passive income by then will outweigh my bills and I could retire if I choose.

As it stands, 89% of my monthly expenses are covered by passive investing activities.  This is a very good situation to be in my late 20s.

I appreciate everyone's support with this blog, and want to the everyone for following up on my comments that I throw on other blogs =P.  The online savvy investor community has been a great motivator for me, and a great way for me to engage other people with the common interest of being financially independent.  Most folks I run into on a daily basis don't have the same financial goals.

Trouble with adding to the Real Estate Portfolio.

I am interested in adding an additional Rental property to the portfolio.  This time though, I am wanting to to make a cash-only deal.  I figured this would be as simple as refinancing my victorian house 1 (since it has the lowest balance and highest interest rate) and pulling cash out to throw down on the new property.

Here is the problem, TEXAS.  When it comes down to it, the state of Texas is looking out for its homeowners to keep them from going over there heads in mortgage debt.  With this, I found out I cannot take a second or a home equity line of credit on an investment property.  I supposedly will get the 'evil eye' when I acquire a 4th mortgage too.  So at this point my hands are tied.

Before I found this out I looked into getting a mortgage for the property. I learned that with Obama's new 'predatory lending' laws, any house I try to purchase under $60,000 will be considered a predatory loan because the banks $4,000 origination fees will be above the 5% loan amount threshold....

The local housing market here has homes dropping in price for the short term, making entry points more desirable for the long term.  I have a few options here:  One would be to continue saving away and waiting until I have the funds readily available.  The second option would be to open up an unsecured line of credit.  The third option would be to wait and continue driving down my various debts.

I'm thinking too that a 4th option would be to diversify my real estate portfolio by getting a rental property in a different town or even state... but I do like having my properties near by in case of emergency repairs etc.

What are your thoughts?  What would you do in my situation?  Imagine having 15k cash onhand, one investment mortgage of ~30k, and about 15k in the stock market.



Disclaimer: I am not a financial planner, advisor, or accountant. The financial actions mentioned were only suited for my own risk tolerance, strategy, and ideas. Copying another's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.