Retiring with nothing

[April McCartney]

I am 50 years old and would like to retire asap. 

I only have $28,000 in retirement savings on an income of $46,000. 

I own a house that is valued at $84,000 and owe $29,000 with a 2.5% interest rate. I have it rented for $750/month. After renting it out several times I have learned from the experience. The house I live in I purchased at a foreclosure sale. It currently values at $166,000 and needs work. No mortgage. 

I have been talking to lenders about a HELOC loans, regular home loans, and DSCR about duplexes to start long term rentals. I have even looked at a few houses. The houses seem to be either out of my budget or built in the early 1900s and are distressed.

I have no other debt and a credit score of 762. Unfortunately, I also need a new car.

I could use advice on how to get started and build a portfolio to have "passive income" so I can get to retirement as soon as possible. 

[Henry Clark]

OP what does ASAP mean?  Your time frame will determine the action plans.

1.  If you plan to retire tomorrow, then you need to sale both properties as an example.  Use the $250k capital gain allowance on your primary house.  Then due to health insurance and cost of living, you need to move to another country, buy a $30,000 home and live low cost.

2.  If you mean by the time your 60 then a different set of actions:

a.  Reduce your cost of living.  Except for personal undergarments, buy all your clothes at thrift stores on their 50% off sale dates.  No more eating out, even for a hamburger.  Buy in bulk rice, beans, 20-pound ham, 10-pound chicken packages, food banks, 50-pound bags of potatoes- white or russet costs less than red, ask your local grocer for a deal, 50 pounds of onions, 50 pounds of carrots, etc.  Electric- your heating cost is the highest.  On your phone get an app or buy a temperature gauge, check your house and seal as necessary, lower the temp in the winter, use a space heater for your main living space,   This should get you about $10,000 to $15,000 per year more in savings.

b.  What is the configuration of your home?  You pick the small room and bathroom.  Rent out the larger space.  Do this at either of the houses you own.

c.  Your 50 and in good health?  Get another job at nights and on weekends.  This will give you another $20,000 per year of savings.  Try for a job that is close by so less car expenses and where you can catch a free meal.

d.  Passive Income is not Passive.  Determine what you want to live off, then back into your Passive number and return needed.  Example:  You want to live off $50,000 per year.  Assuming a return of 8%, tax adjusted to 6%; then adjusted for 3% inflation= $555,000 of savings or assets earning tax adjusted return of 9% to stay up with inflation.

e.  Time frame.  Then the $555,000 when will you get to it?  If you do the above items, you should be able to reach that by the time your 60.  But you still have to cover Health insurance for say $12,000 per year.  So, you still might have to move overseas, or offgrid in the US with zero living costs other than health insurance.  Which means you would need to train yourself.

Key issue is to figure out why at 50 this is your starting point. Then adjust from there. "Congratulations" on the two RE investments though. Take a hard look though at your Capital repairs or CAPEX that is needed. Anything is possible, but you need to know the time frame and then come up with a path.

Example:  We do self-Storage.  I would sale both properties.  Either buy or build a location that is possible with the sale proceeds.  Make sure you can live on site in a manager's office.  This will cut out your rental, utilities, etc.