Radical Cost Cutting to buy more Rental Properties
My wife and I embarked on a new experiment in 2015, radical cost cutting in our personal expenses in order to invest more quickly in cash flowing rental properties. When I say "new", I simply mean new to us as this strategy is older than Henry David Thoreau. First, we sold our very large two story live in flip to a hedge fund investment firm. Mortgage gone, HOA gone, water bill gone, CDD fees gone, long commute gone, property taxes reduced, electric bill reduced, etc. You get the picture. We moved into a small 1,200 square foot live in rehab we bought for $62K. A concrete block bunker with a well, septic tank, and no HOA. This neighborhood doesn't even know what "CDD fee" means. Next came the vehicles. Wife's SUV traded for a Prius, cash deal. My new extended cab V8 pickup and monthly payment traded for a '04 Honda CRV, cash deal, comp & collision insurance canceled. I now live close enough to work to ride a bicycle in about 15 minutes. Let's call it a free workout with no gym fee. Next, canceled cable TV....best decision ever. More time to spend on BP, exercising, talking to my wife, or anything!! WIFI provides all the pay on demand entertainment any sane person could ever want. Next, Iphone and contract with AT&T gone. Hello Republic Wireless for $31.00 a month all fees included. While we still earn a respectable W2 income along with passive net cash flow from rental portfolio, the reduction in consumption has proven powerful in increasing our rental investment potential. Three new cash flowing SFR's so far in 2015. Best part, we're happier and healthier now than when we were uber consuming and out spending the Jones. YTD with 6 months down, we've held spending to just over $16K. The last half of 2015 may prove more challenging with a planned 2 week vagabonding vacation in Italy and the holidays.
We'd love to receive ideas, advice, and shared stories of other frugal BP investors!!