My main goal* was to build an investment and cash portfolio of $1,120,000* in 1500 days**, starting from 1/1/2013 and ending in February of 2017. I made my goal in 2016, my 1500 Days are over, and I’ve left my job. In the interest of openness, I’ll continue to share my numbers.
Last December, I wrote about how Mrs. 1500 and I bought a trailer park. It’s time for an update…
Trailer Park Troubles
When I first wrote about our new investment, a reader mentioned that the term “trailer park” doesn’t go over well with some folks:
I was scolded by a Council Member one time for calling it a trailer park. It is definitely a mobile home park…never forget.
The term “trailer park” has bad connotations. These living arrangements have attracted some unsavory people who do unsavory things. Our trailer park has been mostly drama free. Mostly…
The Pseudo Prostitute
Over the summer, someone called the manager of our park with some interesting news. The call went something like this:
I can’t go to the police for reasons that will soon be obvious, but I thought you should know about what happened to me. I responded to an ad on craigslist for adult favors at your trailer park. When I entered the trailer, the woman’s husband appeared and robbed me.
I got screwed, but not in the way I expected.
That hasn’t been the end of the trouble:
- We have a rule prohibiting dogs over a certain size. Tenants have figured out they can get around this by way of the emotional support animal.
- In one of the units that had been recently vacated, a pipe burst which ran up a water bill of $3,000 before we figured out what was going on.
- Some of the trailers are in rough condition, so we’ve had to rehab them. Finding contractors who do quality work isn’t easy. Hell, finding contractors who show up isn’t easy.
- We’ve had to evict some tenants who stopped paying.
Financially, we planned for most of this. We knew that the park was in rough shape when we bought it and barely paid more than the land was worth because of it. The partners agreed that we’d reinvest all money back into the park for the first year to stabilize it.
After a tumultuous year, things are now looking up. The Pseudo Prostitute is gone. The emotional support pit bulls haven’t eaten anyone. We have rehabbed all of the bad units and are on the hunt for used ones to fill the empty lots. We have sold almost all of the park-owned units to occupants. We’ll start drawing money from the park early in 2019.
October Performance Update
Our net worth started at $2,171,793 and ended at $2,107,627 for a loss of $64,166:
The markets were down in October, but I was down more. This was mainly due to my tech stocks which got whacked silly:
One of the first things I’ll do in 2019 will be to put in a sell order for some of my tech stocks. I’m waiting until 2019 so that I can sell them with little or no tax hit. The good thing about not making a lot of money anymore is that it’s easy to come in under the capital gains threshold.
2018 (as of 11/1/2018)
- Days elapsed: 305
- Investment portfolio gains: $64,926 (including 401(k) contributions**** of $32,918)
- Net worth gains: $114,926 (investment portfolio gain of $64,926 + home appreciation of $50,000)
Since the start (1/1/2013)
- Days elapsed: 2129
- Investment portfolio and cash: $1,592,627
- Gains since 1/1/2013: $1,009,584
- Needed to quit work ($1,120,000 in investments): Mission accomplished!
Portfolio Breakdown
We have a diverse portfolio that includes real estate:
- mobile home park (elevated home living to the easily offended and politically ultra-correct)
- private loan (only one outstanding)
- syndication deals
And stock market holdings:
- individual stocks (old thinking)
- index funds (most money goes here now)
Both sides of our portfolio saw a decline again. Regarding the real estate side, all deals (trailer park, syndications, private loan) are performing as expected, but the Vanguard REIT got taken down hard in October leading to a small loss.
- Stock market: $823,553
- Monthly gain: –$64,146
- 2018 gain: $33,765
- Real estate: $749,074
- Monthly gain: –$20
- 2018 gain: $31,159
- Cash reserve: $20,000
Next?
Mrs. 1500 and I have been looking at another interesting real estate investment. This one is much different than the trailer park and I didn’t see it coming until very recently. If we decide to invest, we’ll be working directly with others to help build something cool in my town. I’ll spill the beans when I have the beans to spill.
In the meantime, don’t seek “love” on Craigslist…
*My goal wasn’t to have $1,120,000 at the end of 1500 days, but at any time before the day count was up. Why? It all goes back to the 4% Rule. Remember that our little friend, Mr. 4%, is nothing more than the most conservative safe withdrawal rate. So, if I were to quit my job now, I could spend about $60,000 in my first year of retirement.
**My original goal was $1,000,000 and no debt, I later raised the goal by $120,000 to $1,120,000 because I will have debt in the form of a mortgage and I firmly believe in not paying it off. My compromise is to have enough money put away to cover the mortgage at the time of retirement. So, to retire today, I would need about $1,120,000.
***This is an affiliate link. If you sign up, the blog (me) makes some cold, hard, beautiful, cash. Personal Capital is a totally free and awesome way to keep watch over your investments. It’s worth it for the fee analyzer alone. I would never recommend anything that I don’t personally use and completely believe in, so give it a try. If you’ve already signed up through the link, please know that you are a fine person of above-average intelligence.
****My 401(k) contributions include my own, Mrs. 15oo’s, and the contributions from my corporation. Self-employment with a solo 401(k) is a very powerful savings tool. I should have done this years ago.
Join the 10s who have signed up already!
Subscribing will improve your life in incredible ways*.
*Only if your life is pretty bad to begin with.
Ha, your ‘elevated home living’ troubles remind me too much of my childhood, so I don’t think I could own an investment like that for fear of feeling like I’m traveling back to where I came from. I escaped and I ain’t looking back!!!
Don’t ever go back home!
That’s way too much excitement for me. I want my investment to be boring. My life is hectic enough already. 🙂
Our net worth is down too. I don’t think you can escape it if you’re an investor. The tech stock got hit pretty hard and they keep going down. Good luck!
Hi,
There is the path encountered by all who reach FIRE. I guess that the best approach is to stay cool and go about doing the things which one likes, on own term. The market will eventually adjust and reward those who remain invested throughout the entire cycle.
WTK
Yep. Long-term is where it’s at.
Ouch, those aren’t problems I envy having to deal with! Glad to hear it seems to have turned a corner though. 2019 seems like its stacking up to be a good year with the cash flow beggining and potentially something new on the horizon!
Yeah, I think 2019 will be the year our real estate deals really start paying. We shall see…
Sounds like you’re turning the corner on the mobile home park. Many may not want to deal with those problems but with some work and your skill set as a backstop, this project could be very financially rewarding.
Congratulations on an up year so far in stocks when the indexes are down for the year!
Yeah, you have to have some fortitude to deal with real estate, especially this class.
And yeah, I should be thankful that I’m still up. Tech is down lately, but over the long term, the sector has been very good to me.
Ohhhh yes. I love those trailer park stories! We used to live in one and it seemed like the drama was never-ending. I hope it gets less interesting very soon!
Yeah! I like a little drama in life, but just a little…
Great update on the mobile home park, I was curious about how that was going. I guess pseudo prostitution and pitbulls are par for the course when it comes to mobile home parks.
Interested to see what kind of returns you’ll realize from it over the long term.
Mr. Tako recently posted…No New Post Today
I’m very interested in the returns too. So far, I’m ahead*!
*We’ve earned $0 while the S&P 500 is negative…
my tech stocks got hammered too. much like yours they have been so good to me so far that it’s hard to cry about it. a little 20% haircut seems a pittance when you consider multi-baggers.
hooray for fake hookers. i knew a one armed hooker who would get down on all 3’s for 75 bucks.
freddy smidlap recently posted…Not All Time Is Created Equal
Presumably the going rate is $100 for all 4s? Thus the 25% discount?
My index funds have just been general broad index funds, so not too bad compared with tech heavy stuff. But you dont know, and tech was going fantastically until this year.
Cathleen recently posted…Tritip roast with trimmings in pictures
Nothing wrong with good old index funds. At some point in my life, I hope that all of my stock market investing is indexing…
Oh man, I really want to meet you in person some day. Your comments are hugely entertaining.
You enjoyed coming up with that title, didn’t you?
🙂
OMG. It’s like you know exactly who I am! 🙂 Really, I think I put 2x more effort into the title than I did the post!
When you come to visit, we can trade tenant stories. We have one that is at least on par with your pseudo sex worker tale.
Glad to hear that the worst may be behind you on the investment. Here’s to hoping that 2019 brings nothing but on-time rent checks and renewals from all your best tenants.
Done by Forty recently posted…40 Thousand to Freedom
We will swap stories. See you in March.
Seems like trailer pa…..I mean “mobile home parks” or “elevated living enclaves” are popular now for real estate investment. That and storage facilities….or “tiny rented enclosures”, transitioning away from multi-family commercial units for those that are beyond the single family/ house hacking. (I am in no way anywhere with anything at all, just been binging on bigger pockets for the last 2 years). I am supposing that by the time you work up to commercial level things, you should already be expecting some drama and problems. Trailer par….I mean mobile home parks isn’t something I’d imagine people just starting out in real estate investment get into right off. How do you determine whether to keep all the lots as rentals vs. lease-option, vs full on-sale?
Cathleen recently posted…Black Friday frugal style (because, I still like stuff)
“How do you determine whether to keep all the lots as rentals vs. lease-option, vs full on-sale?”
That one is easy! We want to sell all of them off ASAP! The issue is that they only rent for like $350/month. So, if you need to replace a furnace or do major rehab work, there goes a full year’s rent.
Holy crap! That’s not much at all! No wonder you want to get rid of them asap. I would too. of course I don’t invest in real estate (yet)- HCOL makes the 1% rule more like the 0.10% rule.
FYI I did not rob the man. I simply suggested that I bet his wife would love to know why he was over at my trailer at 11:30PM on a Tuesday and he offered to make a donation to my 503(c) pizza fund.
Haha, nice one.
1500 days, I have been reading your blog for a long time. My advice is to just stop! Catch your breath! Why anyone at your level of wealth is messing around with trailer parks and over-exposed to FAANG stocks is terrible!! You have won the game. Be cool.
Cheers, Delivery Boy.
Haha, I can’t argue with what you say…
But, but, but… You’re not going to like my next couple of acts. 🙂
You certainly have some interesting investments 🙂 And some great stories to tell the (grand) kids later on!
Team CF recently posted…Cheesy Finance in the Media
Haha, I hope they don’t get too interesting!
I have to say I’m jealous. If you take out the money you added to the pile and the guestimate on home appreciation your assets are up 1.5%. Especially considering your individual Tech stocks that have taking a beating. I’m every so slightly negative for the year as November winds down which isn’t a big deal, but sucks none the less.
Yep, techs have been beaten silly, but most are still up for the year. Long-term baby.
Great story and overall a solid return on investments compared to the population at large…I had some funny trailer park analogies but nothing that compares to Smidlap’s comment and Cathleen’s response, so I’ll save ’em for a future post. I’m up 4.1% this year but that’s primarily due to my home value increasing (up 2.7% for non-house assets) and replenishing my cash reserves after depleting them last year while eliminating all of my debt. I’ll be throwing more money back into the market in December, as well as continuing to look for real estate opportunities myself. Keep up the great work. It’s great motivation for me.
JRobi recently posted…Giving Back and Creating Passive Income….
Thanks!
You should read “Evicted” by Matthew Desmond. Part of it takes place in a mobile home park. It was really eye opening. https://www.goodreads.com/book/show/25852784-evicted
Dunno if I want to read it. Maybe after we sell the park!
Man, mobile home parks are dramatic but that cash flow sure is sweet.
Our biggest problem is drug dealers. It’s hard to get rid of them and it seems for every one evicted two more pop up. Drug dealers and abandoned cars. Where we live it is very expensive to get your vehicle scrapped so people just ditch them at our park. Such a hassle. We caught a few tenants doing it and slapped them with large tow bills so that has calmed the problem a bit.
Agreed with ditching park owned homes! The cash flow from the pad rents is where it’s at. No having to deal with broken fridges and patching up drywall.
Drug dealers! I hadn’t even thought about that, but maybe we’ll get to deal with that next! That would explain the vicious dogs. Drug dealer support animals…
Investment in a real estate investment trust may alleviate the management and bookeeping headaches of physical property ownership. A REIT gets you a share of ownership in top notch retail and industrial tenant income and asset appreciation. Realty Income Company ( symbol O ) has been leasing retail space and property to such tenants as Walgreens, 7-Eleven, FedEx, Dollar General, LA Fitness, Dollar Tree / Family Dollar, Walmart / Sam’s Club, Circle K (Couche-Tard), CVS Pharmacy, Kroger, etc. for more than 20+ years. By combining this with investment in an ETF representative of quality dividend growth companies ( Schwab SCHD for example ) and an infrequent tactical allocation * into defensive intermediate treasuries during economic contraction and market downtrend periods, both high % income withdrawal and asset growth has been achieved historically.
For example, a 75% allocation into O ** and a 25% allocation in SCHD ** ( and a 37.5% allocation into O / 12.5% allocation into SCHD / and 50% allocation into VUSTX during “defensive” periods ), has sustained an 9% annual income withdrawal accompanied by an average 9+ % compound annual growth rate in asset balance ( here https://tinyurl.com/y7mc29at ).
* tactical variables in strategy 3 chapter 4 https://tinyurl.com/y6w4ca8b
** portfolio of dividend aristocrats simulating SCHD stock attributes used prior to 2012
FRESX used 1991 – 1996
James recently posted…Welcome . . .
Interesting times. I’m impressed you’ve eeked out a stock investment gain in 2018. I’m down for the year. It has been a difficult environment.
Financial Velociraptor recently posted…Financial Transparency as of 30NOV2018