Back in June 2013 I went bankrupt, and it sure did throw a spanner in the works of my life. (The story on that is here: What I’m learning from bankruptcy). But here we are, 3 years later, and I’m now a ‘discharged bankrupt’. While I’ve still got bad credit for another 4 years, at least it’s not as bad as being bankrupt.
Last year my wife received some money as a gift from her father, which allowed her to buy something for us to live in. What was fantastic about this was that it was enough for an 80% deposit, so that she could get a mortgage in her name only, despite her low income. We bought and moved into an apartment near where we both work (in the same building!), which was both convenient and prudent. It’s in an excellent area and the apartment is of high enough quality that it was likely to nicely appreciate in value over time, and would be a good investment for when we move on to something else.
This is a a picture of our apartment building. It’s got two towers, and we’re in the one on the right (background).
The apartment building even has its own website.
We’re on the 12th floor and this is a photo of a nice sunset as seen from from the balcony outside our lounge room window:
This is the view from inside the lounge room, and was taken when we purchased it last year (before the furniture arrived):
My wife was also able to put down deposits on a couple of ‘off the plan’ developments. They’re due to be settled in a few months, and now that I’m no longer bankrupt I can be involved in the process.
As a result, this past few weeks has seen me busy with organising for my name to be added to the contracts, but the seller rejected that and countered with an offer to cancel the contracts and redo them in my name instead. After further queries from me (via my solicitor), they agreed to cancel the contracts and redo them in a trust. So I’ve managed to set up a discretionary trust last week which the properties will go into. Mortgages for the properties will be in my name (thankfully there’ll be enough money available for a lender’s requirement of 30% minimum deposit to be considered for a mortgage because of my bad credit rating), but the trust will own the properties and we’ll be beneficiaries of the trust.
It’s all very exciting how it’s all coming together. I’ve already started looking into buying a house next year, which is part of our plan moving forward. I’m considering selling one of the three apartments to free up cash to use as a deposit for the house, with the balance going towards the remaining two apartments to increase cash-flow, but I’m still exploring the options to work out what will be best for us.
I’ve been into property investment for a long time, close to 15 years, but never had the money to do anything about it. With assistance from my father in law, I’m now able to do something about it.
Tracking net worth
Back in 2007, as a result of my interest in improving and monitoring my financial situation, I started keeping track of my net worth (asset value minus debt value). It was important for me to understand how much I owed compared to the value of the assets I had. I last kept track in 2009, and didn’t bother while I was bankrupt from 2013 through to today, 2016. But now that I’m no longer bankrupt and can start investing and appropriating assets again, I’m going to get right back into it.
For the purposes of tracking, I’m tracking what both my wife and I own, and including all assets, savings and debts.
2009:
Assets in Mar 09 are: $95,504
Liabilities in Mar 09 are: $65,928
Net worth is: $29,575
2016:
Assets in Jul 16 are: $959,500
Liabilities in Jul 16 are: $191,427
Net worth is: $768,073
In a couple months when the new apartments settle, I expect this to change to:
Assets: $2,261,500
Liabilities: $1,102,827
Net worth: $1,158,673
I have a spreadsheet that I’ll be tracking asset appreciation, savings increases, and debt reduction. Property appreciation or depreciation will be calculated according to median value for the area, while other depreciating assets (like cars) will be adjusted according to average prices online.
So exciting!
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