Our wealth goals, journey, and targets - Page 14
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Thread: Our wealth goals, journey, and targets

  1. #131
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    Quote Originally Posted by nobleea View Post
    We ended up making an offer 10% under list (or 20% under list when they first listed it). A bunch of back and forth countering but couldn't come to an agreement. Still interested in it, but they'll have to adjust their expectations. I give it a 60% chance that we get it.
    We did not get that one, but have just about finalized an agreement on a purchase from a FSBO in the same neighbourhood.

    In the meantime, I have a bit of cleanup and finish work to do on the suite, but I think it's ready enough to post. I'll update the pics as it's truly finished, but this should give you an idea.
    http://www.kijiji.ca/v-1-bedroom-apa...ay1/1250203284
    We already have a couple solid leads through word of mouth.


  2. #132
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    If it's metered separately for power, why don't you have the tenant sign up for their own account with the power company instead of you charging them something different every month? Just seems like that would be easier to manage.

  3. #133
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    Quote Originally Posted by Spudd View Post
    If it's metered separately for power, why don't you have the tenant sign up for their own account with the power company instead of you charging them something different every month? Just seems like that would be easier to manage.
    Because it's not an official Epcor (utility) meter. Costs quite a bit to get a second one installed. I purchased an inexpensive meter that clamps on to their main breaker line that can provide day by day consumption.
    http://www.ekmmetering.com/ekm-meter...wh-meters.html
    I'll just prorate my bill based on their consumption. They're getting a deal out of it by not having to pay the full fixed fees.
    That company has gas and water meters as well that you can monitor through the same package, but gas and water are cheap.

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  5. #134
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    Oh, that's cool, I had no idea that exists!

  6. #135
    The place looks great, and based on the number of hits for the ad you'll have no problem finding a tenant
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  7. #136
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    An update on goals for last year and the list so far of goals for 2017. Right on time considering we're in April already...

    2016 Goals:

    Increase Net Worth to 840K - Completed in late April
    Move in to new house and sell old one for 475K net or more - Completed, sold for $485K minus legal fees, July
    Finish landscaping on new house - Completed, sod, rocks, concrete edging, trees and shrubs all in
    Spend 5hrs/week on new hobbies and gym time - Incomplete. Didn't even come close
    Read 16 books - Incomplete. I didn't keep track, but it was probably 6-8 books
    Wife signed up for life insurance - Incomplete.
    Start and use family calendar on Google Docs - Complete. What a difference having a shared calendar that we can both access anywhere.
    Track utility consumption in new house and reduce consumption to 4GJ/mo gas, 450kWh/mo power, 12m3/mo water - Utility tracking is complete. Consumptions did not meet goals. Gas is well above at about 9.6gJ/mo. That includes a heated garage and garage suite, plus a much larger house. Aside from adding a gas sub meter, I can't think of a way to remove the garage suite consumption. Power is averaging 575kWh/mo. I thought this would be lower. I think I can get it under 500 once I get the suite submeter in place. Water consumption is well below our goal. Averaging 8.6m3/mo which is almost half of the average household consumption in Edmonton. Since the majority of our consumption is in the summer, I think I can lower it even more. A tenant in the garage suite will bump it back up. As it is, all our utility consumptions are below the household averages for Edmonton, so I am happy with that.
    Start weekly meal planning and try out 3 new recipes/month - Very spotty. Achieved maybe 50% of this before the new kid showed up.
    Create household budget, track on a monthly basis, look for opportunities for savings - Complete. Tracked expenses for a year.

    Overall, I give us a 60% success rate.


    2017 Goals:
    Increase Net Worth to 1 Million
    Start Spec Residential Infill project or put money against mortgage
    Get wife signed up for additional life insurance
    Finish and rent out garage suite, cashflowing at least $500/mo
    Max out yearly RESP contributions for both kids and get CESG grants
    Reduce average monthly power consumption to 500 kWh or less
    Complete gardening and enjoy yard
    Increase non-meat/vegetarian/vegan meals to 2/week or more
    Last edited by nobleea; 2017-04-05 at 01:02 PM.

  8. #137
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    April 2017 Update

    Progress continues on many fronts, which makes me feel good about everything.

    The garage suite is effectively finished and I've had about 8 people come through to look at it. At least 3 of them are solid options. One is looking for May 1, but most are June 1. For the right tenant, the wait is worth it. The unit shows very well. I specifically didn't state the square footage in the ad, and no one has asked about it as the unit feels far more spacious than it actually is. If I advertised that it was 645 sq ft, some might get scared away as that seems pretty small. The application form is detailed and I will be inquiring with references. Plus they will apply for a credit report and send me a copy (I'll reimburse them for the report fee). After thinking about it, I would have been much better off had I paid someone to finish the suite for me. It could have easily been done for Sep 1 last year and I'd have collected 8-9 months rent at 1050 per. Someone could have finished it for 5-6K (over and above the parts/supplies which I purchased anyways) and I'd have had a lot more spare time. I was optimistic, as many are, about how much time it was going to take and how much free time I would actually have to do the work.

    On the spec infill development front, we made some moves during March. Early in the month, we made an offer on a nice pie lot that was split-able. List price was 485K (down from 550) and we offered 435K. Various counters and we stood at 440 and them at 450 so the deal didn't happen. It eventually sold for 450, which in hindsight would've still been a good investment given the size of the lot. So I continued with the plan, which was to target desirable lots which were in poor condition, find the owners through land titles, and submit unsolicited offers. I have 20+ lots identified in the neighbourhoods I'm interested in and sent letters off to the first 3. Surprisingly, 2 of the 3 actually got back to me. One said they were interested, but my price was too low, and the other we managed to strike a deal at 440K. It's still a conditional offer, but I'm 90% positive it's going to go through. It's a corner lot with a south facing backyard. Nice street with several million+ homes either up or going up. A good friend who has done spec development successfully many times before will be partnering with me if necessary to build the second house as we won't be able to afford two builds. Ideally we'd start the build in mid-Sept but that might be a stretch. The hold up is usually land titles in registering the new split lots. That can take a few months. Goal would be to get concrete in before freeze and have houses ready to list in April for busy spring selling season. I'm sticking with my original estimate of a before tax profit of 50-95K per house. Profits would go in to RRSPs (we have 80K+ of available room), so taxes are deferred.

    Other than that, got about 18.5K back in tax refunds this month and 2.4K worth of company shares vested from an old bonus program. Our company stock is finally doing well, up 34% on the year. The snow is all gone here and the garden centres will be opening soon. I've still got a few plants and shrubs to plant but I'm really looking forward to that. Plus the Oilers are in the playoffs in a good position, so everything seems to be going right.

    Assets:

    House - $1,130,000 (N/C)
    SUV - $17,200 (-1.0%)
    Car - $9,000 (-1.8%)
    Work DC Pension (mine) - $172,242 (+2.3%)
    DB Pension (wife) - $219,000 N/C)
    RRSPs - $50,529 (+0.1%)
    Non-Reg - $76,044 (+27%)
    House Maintenance Account: $2,048 (+34%)
    Cash - $3,382
    Miscellaneous assets - $17,500

    Total Assets $1,696,945

    Liabilities:


    Mortgage - $749,126 (-0.3%)
    Credit cards - $4,785 (this is not a balance, but the amount due. We pay off every month, but a true snapshot must include this)

    Total Liabilities $753,911


    Net Worth: $943,034 (+2.7%, +$24,644 month over month, +14% year over year, +$116K year over year)

  9. #138
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    May 2017 Update

    The garage suite is now rented. We were happy with the applicants, but personally knew the references of one of the applicants and coincidentally it was the applicant I felt most comfortable with. Young female, PhD student at the university. Rented at $1050 for a year and moves in in a couple weeks.

    Our deal on the spec infill is finalized with deposit paid to the lawyers. It closes May 31. Financing is approved on a HELOC as a bare lot - I managed to get 65% LTV at Prime+0.5%. It's a great neighbourhood - lots of infill and new builds going up. Our friends live on the same street and about 1/4 of the Oilers roster lives in the neighbourhood. I have a partner who will be buying one of the split lots off me once it is formally split - likely in August. Price will be whatever the max is that he can get it appraised at. I would guess somewhere between 270-300K. We will be building the homes at the same time, same builder, designer and realtor. Profits (or losses) will be split 50/50 after all expenses are repaid. I have added a line item in the NW tracker for Infill equity.

    Been spending a lot of money and time filling out our backyard. Mulch, gravel, dirt, shrubs, perennials, lattice, firepit, sprinkler control, etc etc. I still have some work to do, but it looks fantastic. The big CC amount this month is due to that.

    RRSP's are doing great right now and after looking at ads, I think our monthly depreciation on our vehicles is a bit high. I won't change it, but when we do sell the vehicles there would be a positive variance between 'book' value and sell price. Kids' RESPs are valued at $16K combined. They are not included in the numbers below.

    Oilers playoff run continues, so even though everyone is usually cheery and happy in spring, it's way more this year. I can't justify playoff tickets ($400 ea min), but we did go to one of the watch parties. That's where they sell out the arena to watch an away game on the big screen. Cheap ($5) and the crowd is just as loud during anthems, goals, as it would be during a home game. No yelling and swearing at the non-existent refs and players, so it's a little more family friendly.

    If I want to meet my target of partial retirement at 46 or so, I think I'm going to need to do the following:
    Get the mortgage down to an amount that my wife can qualify for it on her salary alone, on a 10-ish yr term.
    Have 400K saved up to draw down as necessary during the period from 46-66, when I will start drawing on my main work RRSP.
    Have 200K saved up in seed money for any business I want to start.

    So my estimates are that I need about 950-1000K over the next 7.5 yrs over and above our normal mortgage payments. I'm confident I can save up 30K a year no problem just from cash flow (but likely more). If our spec infill project works out as planned, then I would need to do about 2 houses a year to meet my goal.

    Assets:

    House - $1,130,000 (N/C)
    Infill Equity - $20,000 (new)
    SUV - $17,025 (-1.0%)
    Car - $8,825 (-1.8%)
    Work DC Pension (mine) - $176,615 (+2.5%)
    DB Pension (wife) - $219,000 N/C)
    RRSPs - $51,792 (+2.5%)
    Non-Reg - $57,685 (-24%)
    House Maintenance Account: $2,354 (+15%)
    Cash - $1,394
    Miscellaneous assets - $17,000

    Total Assets $1,701,828

    Liabilities:


    Mortgage - $747,166 (-0.3%)
    Credit cards - $47,960 (this is not a balance, but the amount due. We pay off every month, but a true snapshot must include this)

    Total Liabilities $755,126


    Net Worth: $946,702 (+0.4%, +$3,668 month over month, +10% year over year, +$86K year over year)

  10. #139
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    Quote Originally Posted by nobleea View Post
    ... I have a partner who will be buying one of the split lots off me once it is formally split - likely in August. Price will be whatever the max is that he can get it appraised at. I would guess somewhere between 270-300K. We will be building the homes at the same time, same builder, designer and realtor. Profits (or losses) will be split 50/50 after all expenses are repaid.
    Make sure your counsel papers this appropriately (even if it costs a few bucks). You'd be surprised how often these type of arrangements 'go sideways' where people thought they would not, or were too 'frugal' to document things appropriately. They end up paying the price in such a situation.

    Not saying it will end up that way, but better safe than sorry.

  11. #140
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    Couldn't agree more Sm5.

    @nobleea, you're doing great and have lots of things on the go. Amazing stuff. "If I want to meet my target of partial retirement at 46 or so, I think I'm going to need to do the following:
    Get the mortgage down to an amount that my wife can qualify for it on her salary alone, on a 10-ish yr term."

    Totally agree with this one. While your assets are great, if something happens to your job (hopefully not) or your wife's ability to earn an income (hopefully not), your plans are severely compromised. I would definitely now start aggressively killing debt. That's a big pile. With your assets, and growing pensions, in 10 years you are set. But, debt will hold you back if it's not under control.

    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

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