Success Journal - The journey to actualising one's potential

[Lynx nkaf]

Congratulations. From what I hear Dave Ramsey is great for getting out of debt and pulling together a basic budget.

Yes my income jumped up due to a new contract but only temporarily. It will be back to its "normal" level in June.

Working for yourself means you can make high income one month and zero the next but so far its been overwhelming positive from a financial standpoint.

I wonder if I can do my "9 to 5" AND work for myself. Its challenging to think of and thanks for approving of Dave Ramsey.
I tried other methods but his way works the best.
I like him too.

 

[Lynx nkaf]

Current renovation is coming to an end with the expectations that all structural developments will be completed by the end of this month. Meeting with a reputable agency that deals with foreign school I have connections with on Tuesday. Students from rich arab families mainly. They want to visit the accommodation and see if it is adequate to house their students. Likely to see c. $900 per student but costs would be higher than if I housed other tenants - e.g. expectations include one cooked meal a day, regular cleaning, bills inclusive, etc. Still a fantastic yield.

In summary: Purchased a foreclosed residential from a government housing association for $150,000 (£1=$1.25). Derelict and required significant work. Total cost will be c. $20,000. Some of the changes made include:

• full roof repaired,
• wet rot removed,
• chimney stacks and breasts taken down,
• wall and ceiling replastered,
• lounge knocked through and closed up
• dining room converted to bedroom (total 4 bedrooms) and an ensuite built in
• total rewiring,
• radiators (most) removed and flushed,
• leaks in the heating system repaired,
• eight double sockets put in,
• light pendants changed
• fresh piping run through the entire house

Manager has also arranged a meeting with an estate agent to get an idea of valuation and has advised landscaping on the garden and other cosmetic changes to maximise the selling price. Manager expects a selling price as high as $225,000, which would represent profit of $55,000 on a $30,000 investment (5% deposit and refurb costs). i.e a return of over 100%. Unlikely to sell if I can keep the tenants in, as yield is fantastic and I don't need the capital.

Still issues with the units being developed, which I've paid the reservation fee for. Sent a formal request for the return of my fee. Will keep fighting and try and be as much of a nuisance as possible but accepted that it may have to be a write off as I don't intend to spend any additional funds on lawyers to pursue it.

I have eyes and ears in regional cities seeking the next deal to replicate the above process. Funds ready to go.

Have kept up with reading the Greatest Salesman in the World. Missed maybe two or three readings, but going forward I'll endeavour to ensure I don't miss anymore.

Haven't found much time for the guitar or Spanish at all. Also haven't read any of HTMFIP. That needs to change. Intending to wake up earlier so I can fit in my morning read of TGSITW and then read HTMFIP after. Try and get as much out the way before work.

Have been reading the Intelligent Investor. Haven't really considered equities or bonds but after I've gotten one more real estate deal under my belt I need to really think about portfolio allocation. Ideally looking at:

• Real estate - 60%
• Equities - 20%
• Bonds - 10%
• Cash - 5%
• Speculative investments - 3%
• Gold - 2%

IF this deal does end up providing the value that is projected then it will see me hitting a six figure net worth...crazy when you think that in January 2015 I was living in my overdraft and had about $20,000 worth of debt. It's so easy to forget how far one has come. Hard work and self belief are the cornerstone.

You were succeeding back in early 2017 and still are...good job, keep up the grind.

 

[Lynx nkaf]

Summary of latest project

Phase 1 – Renovation and Refurbishment

Status: Finished.

Majority of structural and cosmetic work now complete. The only thing remaining is the landscaping of the garden and the en suite in the downstairs bedroom.

The house was unoccupied while planning began and work was being performed from the beginning of January till the end of May.

Summary of costs

• Purchase price ( c. $155k)
• Banking, mortgage, legal and surveying fees (c. $4k)
• Mortgage interest payable during unoccupied period (c. $2.5k)
• Other bills e.g. council tax, electricity, etc during unoccupied period (c. $1.2k)
• Refurb costs, including salary to builders and material costs (c. $20k)

Total cost: c. $182,000

NB Have not included the capital repayment of the mortgage, nor the deposit as these are not technically expenses

As a point of comparison, a similar property on the road sold recently for $220k so this is the benchmark. A similar sales price would represent a profit of c. $38k and a profit margin of over 20%. Had this been a conventional buy to rent with a 75% LTV the return on investment (ROI) would be nearly 60%. Compare that to an savings account where your yearly interest is 1% if you’re lucky. The nature of my financing means the actual ROI was closer to 250%, as I used very little of “my own” money. But this creative financing is more complex and requires a decent credit score and some financial planning. If you want to know more just ask.


Phase 2 – Hold

Status: Ongoing

Despite the increased valuation there are no plans to sell. Instead, the intention is to rent out the property. The gain, albeit unrealised, isn’t going anywhere. A lot of research was carried out to determine the strength of this area (ask for details), including looking at:

• Location and proximity to major transport links including trams and popular bus routes
• Likely rental demand – visited several letting agents to determine supply and demand for rentals framing the interactions as if we were prospective tenants. Many of them had zero properties available. In their own words "as soon as a property for let comes on the market it gets rented out immediately".
• Establishing and solidifying relationships with key organisations able to supply regular tenants (ask for more details)

In terms of numbers:

• Furniture costs (c. $4k)
• Expected income ($2,000 pcm) based on three large bedrooms and one single room at full occupancy at discounted fees. Note that the three large rooms can be rented out for $650 pcm so these expectations understate the true rental value when fully occupied (over $2,400 pcm)
• Expected costs, including mortgage interest but not including capital repayments ($1,000 pcm)
• Expected profit (£$1,000 pcm)

The property has been on the rental market for a week and has already secured $2,300 pcm for the month of June, despite not being fully occupied broken down as

1. Tenant from Air bnb paying $920 for 28 days from 2nd June
2. Student moving in from the 13th June for seven weeks paying $170 per week ($340)
3. Long term contract at $515 pcm from 1st June
4. Student moving in from 1st June for 2 weeks paying $170 per week ($340)
5. Two people sharing a room for 2 nights due to Park Life festival from 10th June ($155)

In summary, this has been a successful investment that has and will be replicated in the future. I have a team in place, ready to go for the next investment who can:

• Utilise market knowledge and experience to source undervalued property investment opportunities in the Manchester and surrounding area
• Manage the entire lifecycle of small to large scale renovation and refurbishment projects
• Ensure a solid flow of tenants

Next steps

Complete on the purchase of my next investment, which is next door to the property above and get started on the relatively minor cosmetic work required to bring it to rental standards.

I have accelerated my ambitions. My aim is now to be a millionaire by 35

You will easily accomplish this. A pleasure to read of your journey.

 

[BeTheChange]

You will easily accomplish this. A pleasure to read of your journey.

Thank you brother. My ambitions have gotten even more aggressive. My aim is to be a dollar millionaire by next Christmas at the age of 32! Of course all the dominoes have to fall in the correct order to achieve this!

Had some interesting, positive events take place in the last couple of weeks. Will provide an update at the end of the month.

 

[BeTheChange]

Rounding the accounts off early this month so I can enjoy my weekend.

I bought an ownership stake in a consulting firm previously owned and operated by one man. He was billing about $125k a year on his own. A combination of personal issues, combined with Covid meant his revenue dried up compltely and he needed bailing out. I think with his knowledge of the industry, industriousness and sales book this could easily be a $500k turnover business in the next 3 - 5 years.

Especially in combination with my business and finance experience providing a steady hand to his more dynamic way of working. Long term EBITDA margins look healthy; 30 - 40%.

My net worth this month is $550k, if we assume my stake in this company is worth nil, and $650k if you assume I'm correct in what I believe my stake is worth based on my valuation model. Either way I'm not thinking about it as "real" until the business recovers to pre- Covid levels.

Another good month of business. Made about $25k from all revenue streams but lost a client due to work I had to outsource not being up to scratch. My fault, but didn't physically have the hours to do all the work on my plate. Two projects is about all I can cope with on my own anyway, even with the full time PA I hired this month. Three was way too much. I was doing 12 - 15 hour days and losing the will to live.

Feels good now. Manageable work load and the pipeline looking great until the end of the summer.

Put offers down on two properties both of which have been accepted so just a waiting game for the lawyers and bankers to do their thing.

Need to start preping for going back to uni for a masters come September and hopefully try and enjoy at least some of the summer before then.

 

[Lynx nkaf]

Rounding the accounts off early this month so I can enjoy my weekend.

I bought an ownership stake in a consulting firm previously owned and operated by one man. He was billing about $125k a year on his own. A combination of personal issues, combined with Covid meant his revenue dried up compltely and he needed bailing out. I think with his knowledge of the industry, industriousness and sales book this could easily be a $500k turnover business in the next 3 - 5 years.

Especially in combination with my business and finance experience providing a steady hand to his more dynamic way of working. Long term EBITDA margins look healthy; 30 - 40%.

My net worth this month is $550k, if we assume my stake in this company is worth nil, and $650k if you assume I'm correct in what I believe my stake is worth based on my valuation model. Either way I'm not thinking about it as "real" until the business recovers to pre- Covid levels.

Another good month of business. Made about $25k from all revenue streams but lost a client due to work I had to outsource not being up to scratch. My fault, but didn't physically have the hours to do all the work on my plate. Two projects is about all I can cope with on my own anyway, even with the full time PA I hired this month. Three was way too much. I was doing 12 - 15 hour days and losing the will to live.

Feels good now. Manageable work load and the pipeline looking great until the end of the summer.

Put offers down on two properties both of which have been accepted so just a waiting game for the lawyers and bankers to do their thing.

Need to start preping for going back to uni for a masters come September and hopefully try and enjoy at least some of the summer before then.

Congrats on the consulting firm and 2 properties being approved.
I get a buzz from reading your purposeful posts.
Not exposed to this ambition in my daily life.
Well done.

 

[BeTheChange]

Quick one for August. Started Friday with 3 client contracts and due to a set of spectacularly unfortunate events could finish the month with zero. I still have atleast a month of work in the pipeline but then I may need to go back out into the market to find my next contract. We kill what we eat.

Net worth now sits at $625k at book value and $675k based on latest DCF model of my private business. We are now a six person business and move into offices in two weeks. Exciting times ahead. Rest of the year is going to be grind.

 

[Lynx nkaf]

Quick one for August. Started Friday with 3 client contracts and due to a set of spectacularly unfortunate events could finish the month with zero. I still have atleast a month of work in the pipeline but then I may need to go back out into the market to find my next contract. We kill what we eat.

Net worth now sits at $625k at book value and $675k based on latest DCF model of my private business. We are now a six person business and move into offices in two weeks. Exciting times ahead. Rest of the year is going to be grind.

Congratulations to you all.
Once again I get a little buzz reading about your journey, thanks for sharing your high energy.

I like your combo of 'spectacularly' and 'unfortunate' to describe events that happen that make me go 'really? again?''bad luck's not finished yet?'

Looking back I cherish those challenges because I can recall the moment my character/my identity tightened up.

 

[BeTheChange]

Congratulations to you all.
Once again I get a little buzz reading about your journey, thanks for sharing your high energy.

I like your combo of 'spectacularly' and 'unfortunate' to describe events that happen that make me go 'really? again?''bad luck's not finished yet?'

Looking back I cherish those challenges because I can recall the moment my character/my identity tightened up.

Yes indeed. Hard times, make the man.

 

[BeTheChange]

I did end up losing one of my three contracts but it wasn't the end of the world and ultimately I didn't have the capacity to take it on anyway.

One of my two contracts finishes next week, the other runs to the end of the year with a view to extend into 2021. I start university next week - studying a part time masters in Computer Science so it's probably best I only work on a single project. Why am I going back to uni in my 30s?

• I want the technical knowledge that would better enable me to understand some of the more esoteric tech investments I'm interested in
• To develop the foundational skills necessary to build and develop something of my own - whether its a mobile app, software or website. As someone with an entrepreneurial streak I view this as vital for my development
• I love to learn

Net worth sits at $645k. I am still aiming to finish the year with a NW of $800k. I expect only a very small amount of that shortfall to be made up by my earnings and the vast majority to come from unrealised gains on a widescale group of refurbishment projects I am performing on my current and future portfolio.

Work will start next month and I expect builders and tradesman to be working on between five and nine properties simultaneously. I currently own five investment properties with two to be purchased very soon and another two in the pipeline by year end. In short, need to have a BIG final quarter. Let's goooo!

 

[Von]

I did end up losing one of my three contracts but it wasn't the end of the world and ultimately I didn't have the capacity to take it on anyway.

One of my two contracts finishes next week, the other runs to the end of the year with a view to extend into 2021. I start university next week - studying a part time masters in Computer Science so it's probably best I only work on a single project. Why am I going back to uni in my 30s?

• I want the technical knowledge that would better enable me to understand some of the more esoteric tech investments I'm interested in
• To develop the foundational skills necessary to build and develop something of my own - whether its a mobile app, software or website. As someone with an entrepreneurial streak I view this as vital for my development
• I love to learn

Net worth sits at $645k. I am still aiming to finish the year with a NW of $800k. I expect only a very small amount of that shortfall to be made up by my earnings and the vast majority to come from unrealised gains on a widescale group of refurbishment projects I am performing on my current and future portfolio.

Work will start next month and I expect builders and tradesman to be working on between five and nine properties simultaneously. I currently own five investment properties with two to be purchased very soon and another two in the pipeline by year end. In short, need to have a BIG final quarter. Let's goooo!

Dude, I just did the same for the same reasons!

 

[BeTheChange]

Dude, I just did the same for the same reasons!

Going back to uni?

 

[Von]

Going back to uni?

I going back to university to get a Business Intelligence degree, with as much coding class as possible (python, excel, c#, html, css)... I want to combine my finance background with my love of technology and innovations. Also, I am working on making some youtube videos for fun.

I've bought a property.

And free time, I learn coding, for contracts in finance.

My personality is social, creative, strategic, intuitive and geared to the futur. I want to develop my technical skills and problem solving abilities to fix my weakness, and synergies.. so one day I build a beautiful empire and be a strong product manager / systems optimizer

 

[BeTheChange]

NW at $655k. Business took a hit and given the high fixed costs base we ended up making a loss. Strong pipeline means we should recover next month.

Wasn't able to gain government funding for a number of property refurbishments I was looking to do so the scope and scale have now been drastically reduced..

Unfortunately won't be able to acquire as much real estate as was hoping for either. All in all not the best month but in the grander scheme of things not a herrendous performance either.

Now looking to finish the year with seven rather than nine properties due to the slow speed transactions are being completed. Still aiming to finish the year above $700k NW, which would mean I made on paper $300k in a global pandemic. Could be worse!

 

[BeTheChange]

I going back to university to get a Business Intelligence degree, with as much coding class as possible (python, excel, c#, html, css)... I want to combine my finance background with my love of technology and innovations. Also, I am working on making some youtube videos for fun.

I've bought a property.

And free time, I learn coding, for contracts in finance.

My personality is social, creative, strategic, intuitive and geared to the futur. I want to develop my technical skills and problem solving abilities to fix my weakness, and synergies.. so one day I build a beautiful empire and be a strong product manager / systems optimizer

How are you finding your degree so far?

Computer Science has been bloody difficult!!

Coding in python isn't as easy as you'd think - matrices, linked lists, sets, dictionaries, etc - so much to learn. But one month in and already seeing the multitude of use cases for my interests in utilising data.

 

[CAPSLOCK BANDIT]

NW at $655k. Business took a hit and given the high fixed costs base we ended up making a loss. Strong pipeline means we should recover next month.

Wasn't able to gain government funding for a number of property refurbishments I was looking to do so the scope and scale have now been drastically reduced..

Unfortunately won't be able to acquire as much real estate as was hoping for either. All in all not the best month but in the grander scheme of things not a herrendous performance either.

Now looking to finish the year with seven rather than nine properties due to the slow speed transactions are being completed. Still aiming to finish the year above $700k NW, which would mean I made on paper $300k in a global pandemic. Could be worse!

This is a common story and will become more common as time goes on, this isn't about making ends meet or getting ahead, this has become a game of survival, restructure while you can.

 

[CAPSLOCK BANDIT]

March 2021, people will begin to realize the future

 

[Von]

How are you finding your degree so far?

Computer Science has been bloody difficult!!

Coding in python isn't as easy as you'd think - matrices, linked lists, sets, dictionaries, etc - so much to learn. But one month in and already seeing the multitude of use cases for my interests in utilising data.

Challenging but its fun to see the instant feedback of your creation. I plan on mixing Technology and Finance.

I believe with these 2 degrees, i;ll cover the education <credibility> than up to me to make my business.

Also, i bought 1 rental revenu property, plan on adding 1 per year as I study.

Also, I have a youtube channel idea, I am slowly building each monday...

 

[BeTheChange]

Challenging but its fun to see the instant feedback of your creation. I plan on mixing Technology and Finance.

I believe with these 2 degrees, i;ll cover the education <credibility> than up to me to make my business.

Also, i bought 1 rental revenu property, plan on adding 1 per year as I study.

Also, I have a youtube channel idea, I am slowly building each monday...

Congrats man. First rental is the hardest to acquire.

Tech/finance is a good play. You see a lot of computer science grads doing their MBA after to get that well rounded business experience so obtaining the mix you described sounds like a similar process.

I'm a chartered accountant with a masters in Economics and now studying a masters in Computer Science so I kind of did things the opposite way but hopefully my previous life will have some relevance to any future roles I look into within Tech.

 

[BeTheChange]

How it started: 1 Jan 2020 NW @ $400k. Passive income of $20k p.a.
How it ended: 31 Dec 2020 NW @ $780k. Passive income of $60k p.a.

Haven't shared these figures with anyone in real life but damn what a crazy year.

Almost doubled my net worth in the midst of a global pandemic.

Got lucky with contracts and continued investing in hard assets - real estate mainly - which has had a marked rise this year.

Missed the crypto rally as only had a couple of thousand in btc/eth.

Now sitting on seven rentals, some equity, crypto and cash, and an ownership stake in a small cash generating consulting firm (held at book value)

For 2021 the focus is on a number of things:

• Winning one more contract
• Investing the cash from that contract into one new venture and six more property purchases
• Managing portfolio expansion, while keeping occupancy rates high which should be enough to secure complete financial independence by the end of the year
• Refurbishing the majority of my property portfolio utilising government schemes where possible
• Completing the first year of my Comp Science masters degree and making a solid start to the second
• Learning to code comfortably in Python, Java and C#
• Beginning the transition from finance to tech by securing a full time gig (or internship/placement year) as a quant/developer/engineer
• Exploring opportunities in the Venture Capital and crypto space
• Reaching out to companies/trusts and demonstrating how I can add value in a Non - Executive Director role
• Helping grow the consultancy I have an ownership stake in
• Beginning the process of diversifying away from property into equities and crypto
• Building my network and reconnecting with friends if/when we actually get out of lockdown!

2020 was ironically the year that made me believe financial independence was a legitimate and achievable short term goal. 2021 is the year that I'll make it happen.

I am aiming to finish 2021 with a NW of $1.2M and passive income (income from property and employee run side businesses) of $100k+ Let's do this!