Thursday, July 5, 2007

Second Quarter Net Worth Update

I've updated my net worth on NetworthIQ which is shown in the sidebar. Looking at it, it is very discouraging (especially after watching all the Flip That House shows claiming these first time flippers making 6 figure profits, while my wife and I busted our butts rehabbing a house all quarter). My net worth for the quarter increased by only $1k despite one of the best quarters I have ever had in my 401k.

Some of the reasons:
  1. My cash is depleting rapidly as I have a negative cash flow of $3k per month holding costs
  2. I didn't assume any increase in value of my homes. I based this on the current uncertainty in the real estate market due to changes in interest rates and increased foreclosures.
  3. I increased the value of my flip by only the amount that I actually spent. Many articles about home improvement talk about how certain improvements return less than 100% of the cost of the improvement. Although I am hoping that we increased value by more than the cost (especially since we did most of the work ourselves), until I have a contract in hand, I don't have any real profit.
  4. My auto value decreased since I put a few dents in it with my trailer

No comments: