Looking to change my life.

Starting Out
9yFollow

Looking to change my life.

Joshua A.
Kihei, HI · Member since 2017 · 12 posts · 2 votes

Aloha all,


I am in an interesting situation and really want to move towards my dream of renovating/flipping homes.

I am currently a project engineer for a GC. I was recently (2 months ago) relocated to Maui, bought a condo with a USDA 0 down loan and have been working here since. I moved here believing that someone special in my life was coming with me but that "unfortunately" fell through.

I say "unfortunately" because it really woke me up. What am I doing with my life?? I know what I want to do yet I'm not doing it, why? I've been intimidated and crippled by money my whole life and I'm making a change now.

Here is my situation:
- I no longer want to work for my current employer; the position is not challenging in the ways I want it to be and it is eating up almost all of my time
- I bought a 2bd/1.5ba condo for 280k, which is about average in the market right now.
- I am soon to be 30 but have no retirement funds, no savings and significant debt (10k personal loan, 8k car loan, 10k CC debt) this hurts me to write because I feel so stupid about my financial past but I need to be honest with myself.

My employer pays me well but between the mortgage and debt obligations and life costs, I live paycheck to paycheck.

I love Maui, but I want to move back to the mainland early next year - I am from California and am looking to move back to Southern California.

I have worked in the construction industry for years and love managing the building process, helping design, and getting my hands dirty from time to time. The whole process of breathing new life into and old home or creating something from scratch gives me such fulfillment, it's what I want to do with my life.

But I need help with my finances - how can I make my dreams possible when I'm struggling to pay down debt and am barely able to save anything? I have the condo but it doesn't seem like renting it out would be viable - most around me rent out for what I pay in mortgage+HOA costs. I feel trapped and helpless.

I want a plan. I want to work with other people's money (purely cause I don't have my own) to make us both profits. I want to build a strong future for myself, be able to provide for my parents that provided so much for me, and provide amazing housing for the people who need it.

Thank you for getting this far in my long message, I appreciate any and all help/guidance you can provide.

Mahalo,
J

1Reply
76 views

Most Popular Reply

Alexander FelicePro Member
Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
9y

I started in a very similar situation.

track your finances like a freak

educate at every moment you can (audio books in the car, reading at night)

save capital, cut everything but bare necessities

network until the only people who spend time with are more successful than you are

This is how I changed my life, it's slow and sacrificial but it 100% works. You go from these small steps to buying houses before you know it. Education leads to action.

[email protected]Podcast Guest on Show #301
5Reply
See this reply in the discussion

27 Replies

Jump to latestLatest
  • Alexander FelicePro Member
    Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
    9y

    I started in a very similar situation.

    track your finances like a freak

    educate at every moment you can (audio books in the car, reading at night)

    save capital, cut everything but bare necessities

    network until the only people who spend time with are more successful than you are

    This is how I changed my life, it's slow and sacrificial but it 100% works. You go from these small steps to buying houses before you know it. Education leads to action.

    [email protected]Podcast Guest on Show #301
    5Reply
  • Joe J.
    Investor · Los Angeles, CA · Member since 2017 · 95 posts · 52 votes
    9y

    @Joshua A. Sorry for the unfortunate circumstances but congratulations on wanting to make a positive change.  Have you thought about additional sources of income to pay down debt/purchase future investments/bolster savings?  I would tackle that debt aggressively as I'm assuming those have killer interest rates (starting from the highest rate debt first).

    I don't know logistics in Maui but have you thought about doing any/all of the following for additional side income sources?:

    1) Uber/Lyft

    2) Side contracting/handyman work

    3) Airbnb spare room?

    Also, if you do decide to relocate to SoCal and rent from a standard 1 year lease isn't enough to cover your expenses, maybe you could Airbnb your condo for increased rental potential (and additional effort)

    I understand these ideas may not be ideal or convenient but digging yourself out of debt is never easy.  Best of luck.

    3Reply
  • Jim D.
    Investor · United States · Member since 2015 · 415 posts · 487 votes
    9y

    Sorry to hear you're in a rough spot. You're only 30 and if you are committed to a financial change, you have tons of time to build wealth. For expense reduction, the first place I'd look is buying a much less expensive car. Save everything you can and pay that credit card off aggressively. If you don't eliminate it quickly it will become a monster.

    Once you get your expenses down, it sounds like the primary problem is income. Everyone loves talking about passive income in real estate, but in reality before that can happen you have to first at least get out of bad debt and have some savings. If you can get rid of at least your CC debt and personal loan, and then save up a 5% down payment on a house, then you can make some magic happen by renting out rooms or units of your house.

    You sound like a perfect candidate for a Dave Ramsey money makeover... get a copy of his book immediately if you haven't yet. 

    1Reply
  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y

    @Joshua A. I think you need to work through your life plan and your dreams at the same time.  If you have a chunk o' credit card debt and need to save to flip homes that's a tough place to start.  As others have said, it's far from insurmountable but that $10K credit card debt (with the extra fun interest rates) is just going to eat you alive.  But once you get past that temporary challenge you'll run into another: your chosen market.  Setting aside the cost of living in SoCal the cost of entry for homes to flip is extremely high compared to...well...maybe 95% of the country?  That doesn't mean you can't do it, it just means you'll have to partner up and/or wait a lot longer to start.  I'm guessing both.  Buying and renovative a $800K home might not be achingly more difficult than an $80K home but downpayment, holding costs, etc. are astronomically higher.  So, unless you're moving in with mom and dad, are you sure you want to come back to SoCal if your dream is the flip and renovate homes? 

    0Reply
  • Joshua A.
    OP
    Kihei, HI · Member since 2017 · 12 posts · 2 votes
    9y
    Originally posted by @Alexander Felice:

    I started in a very similar situation.

    track your finances like a freak

    educate at every moment you can (audio books in the car, reading at night)

    save capital, cut everything but bare necessities

    network until the only people who spend time with are more successful than you are

    This is how I changed my life, it's slow and sacrificial but it 100% works. You go from these small steps to buying houses before you know it. Education leads to action.

    Glad to hear another has made it out. Thank you for the advice and confidence. I listen to audiobooks a lot and read at night. I am (now) very diligent with my spending and am looking for ways to take in extra income.

    0Reply
  • Joshua A.
    OP
    Kihei, HI · Member since 2017 · 12 posts · 2 votes
    9y
    Originally posted by @Joe J.:

    @Joshua A. Sorry for the unfortunate circumstances but congratulations on wanting to make a positive change.  Have you thought about additional sources of income to pay down debt/purchase future investments/bolster savings?  I would tackle that debt aggressively as I'm assuming those have killer interest rates (starting from the highest rate debt first).

    I don't know logistics in Maui but have you thought about doing any/all of the following for additional side income sources?:

    1) Uber/Lyft

    2) Side contracting/handyman work

    3) Airbnb spare room?

    Also, if you do decide to relocate to SoCal and rent from a standard 1 year lease isn't enough to cover your expenses, maybe you could Airbnb your condo for increased rental potential (and additional effort)

    I understand these ideas may not be ideal or convenient but digging yourself out of debt is never easy.  Best of luck.

     Hi Joe, thank you for the tips. I am going to sell my car to try to alleviate that cost, but until it sells I will jump back in the Lyft game, thank you for the reminder. I am looking for side work (photography is a hobby of mine and I can do handyman work as well). Unfortunately, my condo complex does not allow short term rentals (6 month rental minimum) or else I would jump on the AirBnB too.

    0Reply
  • Joshua A.
    OP
    Kihei, HI · Member since 2017 · 12 posts · 2 votes
    9y
    Originally posted by @Jim D.:

    Sorry to hear you're in a rough spot. You're only 30 and if you are committed to a financial change, you have tons of time to build wealth. For expense reduction, the first place I'd look is buying a much less expensive car. Save everything you can and pay that credit card off aggressively. If you don't eliminate it quickly it will become a monster.

    Once you get your expenses down, it sounds like the primary problem is income. Everyone loves talking about passive income in real estate, but in reality before that can happen you have to first at least get out of bad debt and have some savings. If you can get rid of at least your CC debt and personal loan, and then save up a 5% down payment on a house, then you can make some magic happen by renting out rooms or units of your house.

    You sound like a perfect candidate for a Dave Ramsey money makeover... get a copy of his book immediately if you haven't yet. 

     I just downloaded the Dave Ramsey audiobook and will be listening to that on my commutes, thanks for the tip. I am also looking to sell my car for something much cheaper and that I can pay for flat out. I am going hard at my Credit Card debt, thank you for all the tips.

    0Reply
  • Joshua A.
    OP
    Kihei, HI · Member since 2017 · 12 posts · 2 votes
    9y
    Originally posted by @Andrew Johnson:

    @Joshua A. I think you need to work through your life plan and your dreams at the same time.  If you have a chunk o' credit card debt and need to save to flip homes that's a tough place to start.  As others have said, it's far from insurmountable but that $10K credit card debt (with the extra fun interest rates) is just going to eat you alive.  But once you get past that temporary challenge you'll run into another: your chosen market.  Setting aside the cost of living in SoCal the cost of entry for homes to flip is extremely high compared to...well...maybe 95% of the country?  That doesn't mean you can't do it, it just means you'll have to partner up and/or wait a lot longer to start.  I'm guessing both.  Buying and renovative a $800K home might not be achingly more difficult than an $80K home but downpayment, holding costs, etc. are astronomically higher.  So, unless you're moving in with mom and dad, are you sure you want to come back to SoCal if your dream is the flip and renovate homes? 

     Aloha Andrew. I understand what you mean, SoCal is a very pricey place to try and do this kind of work. It is the market I want to stay in and the people that I want to help. I imagine that my construction management skills are valuable and that I would be able to build up a solid base of partners to work with; that is my goal.

    0Reply
  • Matt LeonardPro Member
    Londonderry, NH · Member since 2015 · 98 posts · 89 votes
    9y

    @Joshua A. sounds like your hair is on fire.  I think your first order of business should be getting that debt eliminated, and optimizing your finances.  Dave Ramsay is a good starting point, but if you really want to hit the gas pedal, check out the Choose FI podcast/website, Mr. Money Mustache, JL Collins NH, and The Mad Fientist, among others.  Taking the time to read all the blog posts (yes, ALL) should take a while and give you a tremendous foundation to build on.  I assume you've already listed to all the Bigger Pockets podcasts and read all the blogs.

    Quitting your job, selling a property, and moving seems like it would rack up a TON of additional expenses.  You might want to suck it up for a couple years at your current job until you have your finances squared away and have built up a war chest.  Maybe try to find a better paying job in your current location/field.   You live in freakin Hawaii, things could be much worse.

    2Reply
  • Victor S.
    WorldWide · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    Nothing really to add that wasn't said above. Consolidate the cc and personal loan into one. Is your score high enough to open a no-interest cc and transfer those debts? (look for 18-24 months 0% apr and do this again in the future if, there's not enough time) Start looking for ways to maximize income as well. Look for other W2 opps, if this one is not working out monetarily. Network, also. 

    Good luck, man. If there's a will, there's a way.

    0Reply
  • Victor Evans
    Investor · Frederick, MD · Member since 2015 · 48 posts · 26 votes
    9y

    @Joshua A.  Have you thought about house hacking your condo? Live in the smaller of the two rooms and pay off that 10k cc and car loan asap..  Also, as you've mentioned you are paid quite well as a project engineer... what life cost has you living paycheck to paycheck?!

    0Reply
  • Account Closed
    Investor · Vallejo, CA · Member since 2016 · 42 posts · 19 votes
    9y

    @Joshua A. You should go network with a local REI club. Based on the last meetup's discussion, construction-related experience is a big plus on the island. Their next meetup is this Thursday coming up. You'll meet some fantastic folks. Big shoutout to @Christian Cramer for organizing these!

    0Reply
  • Kyle McCorkel
    Rental Property Investor · Hummelstown, PA · Member since 2015 · 638 posts · 653 votes
    9y
    Joshua A. Congratulations on experiencing the major life wake-up call! In five or ten years you will look back on this moment fondly as the time your life changed for the better. I would strongly advise getting your personal finances in order before jumping into investing too deeply. I would say to try and house hack but might be tough considering you've already just bought a primary residence. Getting your personal finances in order will take less time (since your full time job eats up most of it) and will build a foundation allowing you to be more tolerant to risk once you start investing. I think Scott Trench's book "Set for Life" would be absolutely perfect for you! It is written from a personal finance AND real estate investors view.
    0Reply
  • Matthew Moore
    Colorado Springs, CO · Member since 2016 · 84 posts · 48 votes
    9y
    Joshua A. The most difficult step has already been taken. You realize you have a problem, I'm in the same situation with about the same misc. debt. The next step is going to be very difficult and will require sticking to the required life changes. Stick to YOUR goal and pay off those debts one at a time and eventually you'll be out of you situation! Remember stick to your goal it will be worth it! -Matt Moore
    0Reply
  • Martha Chavarria
    Investor · New York City Metro area, NY · Member since 2013 · 39 posts · 12 votes
    9y

    @Joshua A.  I totally agree with Victor E. You have window of opportunity to house hack your condo. That would alleviate some of the burden. As far as your credit cards, which can be of the highest interest rates,  if you can transfer this debt to a new card with 0% interest for a minimum of 12 months, this can help paying down your cc debt faster. If that's not an option, consider paying them down significantly, where your income to debt ratio is 25-30%. (This helps with your credit score). With your car payment, instead of sending one payment due a month, split it down the middle and make payments bi-weekly, taking note to apply it towards your principle, lowering your interest. 

    Personally, I have gone through my share and as I'm sure many members in Biggerpockets as well. You are definitely not alone. But what this fine group, the vision is clear. "The rat race is not part of the plan". Its taking me a couple of years but now, for the first time ever I've preapproved and in the process of buying my income property, practically debt free!! 

    You got this! 

    1Reply
  • Joshua A.
    OP
    Kihei, HI · Member since 2017 · 12 posts · 2 votes
    9y
    Originally posted by @Matt Leonard:

    @Joshua A. sounds like your hair is on fire.  I think your first order of business should be getting that debt eliminated, and optimizing your finances.  Dave Ramsay is a good starting point, but if you really want to hit the gas pedal, check out the Choose FI podcast/website, Mr. Money Mustache, JL Collins NH, and The Mad Fientist, among others.  Taking the time to read all the blog posts (yes, ALL) should take a while and give you a tremendous foundation to build on.  I assume you've already listed to all the Bigger Pockets podcasts and read all the blogs.

    Quitting your job, selling a property, and moving seems like it would rack up a TON of additional expenses.  You might want to suck it up for a couple years at your current job until you have your finances squared away and have built up a war chest.  Maybe try to find a better paying job in your current location/field.   You live in freakin Hawaii, things could be much worse.

     Hair on fire is an accurate description but I have learned to accept the flaming head and walk through the fire.

    Thank you for the wealth of information; I have been reading a lot for the last few months and plan on kicking that up a notch now (and kicking up the action notch too, reading must correspond to action as well)

    Quitting my job, selling a property and moving would rack up expenses. I am already setting plans in motion to relieve all of this debt and I may have to stay with this job longer than I care to. The mentality of "suck it up for a couple years" is what has gotten me to this state in the first place, I am done with jobs that are just a paycheck. Same with the mentality of "things could be much worse"; not saying this to be rude but that is a useless statement to me. It can be applied to anyone in any situation. Yes, Hawaii has beautiful landscape and beautiful weather - if I were to make a list of important aspects of my life, weather and landscape would be about 5% of that list.

    1Reply
  • Joshua A.
    OP
    Kihei, HI · Member since 2017 · 12 posts · 2 votes
    9y
    Originally posted by @Victor S.:

    Nothing really to add that wasn't said above. Consolidate the cc and personal loan into one. Is your score high enough to open a no-interest cc and transfer those debts? (look for 18-24 months 0% apr and do this again in the future if, there's not enough time) Start looking for ways to maximize income as well. Look for other W2 opps, if this one is not working out monetarily. Network, also. 

    Good luck, man. If there's a will, there's a way.

     Aloha Victor, thank you for the input. I will keep an eye out for a good credit card. I am a bit wary of opening another as I have several credit cards already and I just bought a condo so the hard inquires on my account are pretty damaging. But, if it can help me get out of debt faster it may be worth it.

    0Reply
  • Joshua A.
    OP
    Kihei, HI · Member since 2017 · 12 posts · 2 votes
    9y
    Originally posted by @Victor Evans:

    @Joshua A.  Have you thought about house hacking your condo? Live in the smaller of the two rooms and pay off that 10k cc and car loan asap..  Also, as you've mentioned you are paid quite well as a project engineer... what life cost has you living paycheck to paycheck?!

    I have thought about this and am considering it. I have a lot of family and friends that want to come visit me but I may have to kick them to the couch and add a roommate.

    Mortgage + personal loan + credit cards + car payment adds up to a lot, I have a budget spreadsheet and pay attention to all of my purchases. I am not "struggling to get by" but I am struggling to pay down debt AND get by.

    0Reply
  • Joshua A.
    OP
    Kihei, HI · Member since 2017 · 12 posts · 2 votes
    9y
    Originally posted by @Account Closed:

    @Joshua A. You should go network with a local REI club. Based on the last meetup's discussion, construction-related experience is a big plus on the island. Their next meetup is this Thursday coming up. You'll meet some fantastic folks. Big shoutout to @Christian Cramer for organizing these!

     Thanks for the heads up Diana! I have signed up for that meetup and will be attending this Thursday :) I was a member of that Meetup already but am glad that you pushed me to check it again!

    0Reply
  • Joshua A.
    OP
    Kihei, HI · Member since 2017 · 12 posts · 2 votes
    9y
    Originally posted by @Kyle McCorkel:

    Joshua A.
    Congratulations on experiencing the major life wake-up call! In five or ten years you will look back on this moment fondly as the time your life changed for the better.

    I would strongly advise getting your personal finances in order before jumping into investing too deeply. I would say to try and house hack but might be tough considering you've already just bought a primary residence. Getting your personal finances in order will take less time (since your full time job eats up most of it) and will build a foundation allowing you to be more tolerant to risk once you start investing.

    I think Scott Trench's book "Set for Life" would be absolutely perfect for you! It is written from a personal finance AND real estate investors view.

     Thanks Kyle! Personal finances is step one and I have already started. I will definitely check out Set for Life :)

    0Reply
  • Joshua A.
    OP
    Kihei, HI · Member since 2017 · 12 posts · 2 votes
    9y
    Originally posted by @Matthew Moore:

    Joshua A. The most difficult step has already been taken. You realize you have a problem, I'm in the same situation with about the same misc. debt. The next step is going to be very difficult and will require sticking to the required life changes. Stick to YOUR goal and pay off those debts one at a time and eventually you'll be out of you situation! Remember stick to your goal it will be worth it!
    -Matt Moore

     Thank you for the encouragement and the reminders Matt, I wish you the best in your adventure too! I know that it will be so worth it, I have to release the attachment to the idea of where I THINK I should be right now, that is what bogs me down. I am where I am and I am making positive progress in a great direction!

    0Reply
  • Joshua A.
    OP
    Kihei, HI · Member since 2017 · 12 posts · 2 votes
    9y
    Originally posted by @Martha Chavarria:

    @Joshua A.  I totally agree with Victor E. You have window of opportunity to house hack your condo. That would alleviate some of the burden. As far as your credit cards, which can be of the highest interest rates,  if you can transfer this debt to a new card with 0% interest for a minimum of 12 months, this can help paying down your cc debt faster. If that's not an option, consider paying them down significantly, where your income to debt ratio is 25-30%. (This helps with your credit score). With your car payment, instead of sending one payment due a month, split it down the middle and make payments bi-weekly, taking note to apply it towards your principle, lowering your interest. 

    Personally, I have gone through my share and as I'm sure many members in Biggerpockets as well. You are definitely not alone. But what this fine group, the vision is clear. "The rat race is not part of the plan". Its taking me a couple of years but now, for the first time ever I've preapproved and in the process of buying my income property, practically debt free!! 

    You got this! 

     Thanks for the encouragement Martha! :) I am exploring ALL options at this point and will definitely look in to the ones you suggested. My car loan interest rate is not TOO bad, so I think that putting that extra payment toward a credit card would be more beneficial at this moment. 

    I have been exploring getting rid of my car but I don't think it is a viable option. I used to drive A LOT so the mileage on my vehicle is very high and the value of the car is less than what I owe on it.

    Congrats on getting preapproved!! Excited for you :) 

    0Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    9y
    Joshua A. You have to move to the main land. Hawaii is 10% more expensive however 30% less pay for similar jobs in comparison to other expensive markets like seattle or cali. The only way to make it work is to move in with mom and dad.
    0Reply
  • Justin Young
    Investor · Honolulu, HI · Member since 2016 · 362 posts · 93 votes
    9y

    @Joshua A.

    Not having read the other comments here so this may have been repeated. My initial thought is you are going to need a side hustle or ask your employer to work more hours. With having very little time, a side hustle would be tough but the question comes back to, "how bad do you really want to get out of your current situation?" Asking your employer for more hours would help create a nice cushion for you to pay down your debt.

    Sometimes, what we think is the problem (the "obvious" thing" isn't really the problem. Its just a mind shift. Are there any opportunities for you to take your expertise elsewhere for more pay? For what its worth, my wife is a stay at home mother taking care of our 3 children. Being that I'm the only source of income, I am very diligent on our finances. On top of that, I'm trying the best I can to make real estate my main source of income so I can spend more time with my kids. My "why" is much stronger than not loving my job. I will show up everyday at my job, even if I don't love it, so that it can help me get where I want to get to. Hope this helps.

    0Reply
  • Spencer Keables
    Hailey, ID · Member since 2015 · 30 posts · 5 votes
    8y

    @Joshua A., 

    Props for taking the time to recognize what things you need to change and for having the courage to admit it here on the bigger pockets forums. Looks like you have recieved a ton of great advice. 

    I agree totally with @Alexander Felice that education leads to action. Continue to read, listen to podcast and educate yourself in every way possible and if you do that you will find the motivation 

    that your looking for. 

    Also also agree with the multiple people who have said you should start by getting rid of that debt. The Dave Ramsey book Money Makeover is a great place to start. 

    Another book that i would recommend to really light your fire and open your eyes is "Rich Dad Poor Dad". 

    Sounds to me Joshua that you are already on the right track, keep up the good work and good luck moving forward. 

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free