If you want to apply the concepts Rich Dad Poor Dad, take all the money you would use to pay off your student loans, put it into real estate, and use the income from real estate to pay off your loans.
If you want to apply the concepts Rich Dad Poor Dad, take all the money you would use to pay off your student loans, put it into real estate, and use the income from real estate to pay off your loans.
San Diego, CA 路 Member since 2018 路 15 posts 路 12 votes
7y
@Shivam Patel
If you want to get started as soon as you can, I still advise you compare your loan rates to realistic expected returns. Go after whatever is higher. Maybe you have some high interest rate loan (I had one at 10+%) that would best be paid off asap. You can just make your normal payments on the 3% loans while investing.
@Suny Capezzuto
That's amazing! I just need to be more serious about it and actually move forward with the possibility of getting into real estate even with high student loans.
If you can pick up property 'subject-to', or wholesale something, I'd say yes. Other than that, I'd advise to pay down those loans. There is absolutely no doubt we are headed into a cycle change; the only unknown is WHEN. That top won't be known until after it's passed.
Should you be worried about it? Hell no.
But you should be aware and prepared.
An important lesson for investors: leverage is a two-edged sword. If you go into a recession loaded with debt, especially if that debt is financing non-performing 'assets' (student loans) you could easily get cut if you own property, have a few vacancies, mortgage/tax/insurance is due, and so is the non-forgivable student loans. THAT'S when you will worry.
Yes, I'm a bit more conservative than many fine folks here--you may be more or less aggressive in your real estate dealings. Just please keep in mind, real estate can be very fast paced at times, but it needs to be run like a marathon, not a sprint.
New Orleans, LA 路 Member since 2019 路 19 posts 路 4 votes
7y
Hey @Shivam Patel, It really depends on your loan % interest vs your expected ROI in real estate. Paying student loan, I am guaranteed a return , no matter what. You just have to weigh your options and know your risk tolerance.
I started out with 155k student loans at different rates of 5-8% interest. I refinanced to 3.93% and HUSTLED intensely to off more than 50% of that balance. The interest rate was KILLING me before I refinanced. I still have some loan but I am at a much more comfortable place to start investing while continue paying off my bad debt aka this student loan. 馃お
One thing that has helped me is budgeting and create realistic financial goals . If you want to pay off loan intensely but also want some cash reserves in the mean time so you鈥檙e not completely left empty once loan is done, set money aside. Goal of say.. 6k yearly? Ok I need 500$ monthly allotment straight from my check into a diff savings accnt where I鈥檓 not tempted to withdraw. I also moved back home with mom and saved 1k monthly in rent. If you are on your own, consider househacking method? Has some time, consider wholesaling OR side hustle? In the mean time, learn as much as you can about the real estate world. The worst is to acquire more debt because you didn鈥檛 do your homework thoroughly.
Everyone is different. I have friends that pay bare minimum on student loans and purchase homes , stocks etc. For me, I don鈥檛 like this golden handcuff, I want it gone. Only you can make the decision that you are most comfortable with and just remember you鈥檙e the only one that has to live with it . Wishing you much success and financial peace!
Real Estate Agent 路 Cleveland, OH 路 Member since 2019 路 359 posts 路 295 votes
7y
@Thao Nguyen I do not wholesale at all. I brrred, used rental income, and i also flipped. each time i set aside a portion from the income to pay off debt (student debt and credit cards because i was a very dumb 18 yr old lol)
Real Estate Agent 路 Cleveland, OH 路 Member since 2019 路 359 posts 路 295 votes
7y
@Thao Nguyen My 1st project i was broke and in college so my husband and i scraped together like $4K and did an FHA house hack im a duplex. from then on weve refinanced, pulled out money and then once i got my full time job it helped set off even more.