Illinois Firefighter trying to build a RE Portfolio
New to Real Estate · Canton, IL · Member since 2020 · 6 posts · 3 votes
1. My wife is super against REI and I've tried to get her to look into it but she has not been persuaded. What's the best way to persuade?
2. I have some deals that I’ve been looking at in the town I live in and think they’d be a good opportunity but I don’t have the capital and tried find a private money lender but no luck yet. I can’t put 20% (~ $17,000) down what is the best way to do this deal, barring I talk my wife into it?
@Jake Chenoweth, welcome to BP bud and thank you for what you do. There are a lot of threads on things to do when your wife is not on board with investing. I have been investing in rentals over 25 years. My wife has a college degree, is very intelligent, and I love her very much. That being said she believes you should put your money in CDs, period. She has literally opposed every single rental I have ever purchased. I believe I have over 40 units now. I am an attorney, but have also been a volunteer fireman for over 30 years as well. My first pure rentals, bought not to live in was with a partner and that made it much easier. There were 2 of us to take care of things, come up with down payments, and to fix properties up. I bought that partner out about 7 year ago for about 20x more than the cost of out first rental house, and at least 10x his yearly salary he was making when we met. (To be fair we were pretty broke back then) My wife and I had a few arguments, and even a few tears, but I pushed ahead. I have never expected my wife to only take the career path I chose and only invest as I choose, so she must respect me enough to let me invest as I choose. It is a rare occasion that she approved of what I did except for selling a house for a nice profit. With my main job being an attorney it pays decently, but not massive as I mostly did government work as a prosecuting attorney. Still my rentals are worth more than double what all of my accumulated assets I paid for by being an attorney. That is a level of security I never hoped to achieve. In fairness I put every penny back into the real estate and lived off of my attorney salary. We simply started slow and worked up. If I retire before age 65 it will only be because real estate made it possible. I am in a different state than you, but feel free to chat with me if you want. Investing is harder with your spouse not on board, but not impossible. How fair is she with you in allowing you to have your own mind and make your own decisions for the financial future of your family. My wife still objects to every rental I buy, but it just made buying her dream home possible. We literally just moved into it this year. Without real estate that dream would have never happened.
Jake I sure hope you get your wife on board with the idea, but she may want to see proof of concept ha. So in your town do you know anyone through friends, family, someone at the fire house that knows someone that has rentals or a property that they are tired of owning. Reason why I am asking this, is maybe you get them to do seller finance terms.
Sine you have some money but not $100,000s sitting around, that would be a great way to get started.
Well my other big dilemma is we just bought hopefully our “forever home.” So a little of our capital went to it. So there’s not a whole lot money to go into the RE portfolio currently.
Jake,
You have more than one option when it comes to buying an investment home. Especially with $17,000.00 as a DP amount and possibly additional cash funds from your primary. If you have lived in the home for over 6 months you could also tap into the primary and take out some cash while rates are so low. You also do not need 20% you could buy a second home and only need 10% down. Second homes can be used as a short term rental 6 months out of the year and eventually can covert to a full time rental.
Your wife may be interested in a second home/vacation home idea that pays for itself over time. She may want to take a break from the day to day monotony and utilize the new vacation home. If your on a tight budget a condo or town home can help reduce the burden of annual taxes and home owners insurance. since they are generally cheaper on both but just shop for a low HOA that makes sense.
@Jake Chenoweth, welcome to BP bud and thank you for what you do. There are a lot of threads on things to do when your wife is not on board with investing. I have been investing in rentals over 25 years. My wife has a college degree, is very intelligent, and I love her very much. That being said she believes you should put your money in CDs, period. She has literally opposed every single rental I have ever purchased. I believe I have over 40 units now. I am an attorney, but have also been a volunteer fireman for over 30 years as well. My first pure rentals, bought not to live in was with a partner and that made it much easier. There were 2 of us to take care of things, come up with down payments, and to fix properties up. I bought that partner out about 7 year ago for about 20x more than the cost of out first rental house, and at least 10x his yearly salary he was making when we met. (To be fair we were pretty broke back then) My wife and I had a few arguments, and even a few tears, but I pushed ahead. I have never expected my wife to only take the career path I chose and only invest as I choose, so she must respect me enough to let me invest as I choose. It is a rare occasion that she approved of what I did except for selling a house for a nice profit. With my main job being an attorney it pays decently, but not massive as I mostly did government work as a prosecuting attorney. Still my rentals are worth more than double what all of my accumulated assets I paid for by being an attorney. That is a level of security I never hoped to achieve. In fairness I put every penny back into the real estate and lived off of my attorney salary. We simply started slow and worked up. If I retire before age 65 it will only be because real estate made it possible. I am in a different state than you, but feel free to chat with me if you want. Investing is harder with your spouse not on board, but not impossible. How fair is she with you in allowing you to have your own mind and make your own decisions for the financial future of your family. My wife still objects to every rental I buy, but it just made buying her dream home possible. We literally just moved into it this year. Without real estate that dream would have never happened.
Jerry,
That's the best response to that question I've read in the 8 years I've been on this forum. Great advice 👍
Clint
@Jake Chenoweth - My suggestion is to align on the future you and your wife want and lay out a plan to get there, work backwards and show how real estate is one of the most powerful ways. Ultimately, if she's not on board, then don't invest. Put your marriage first.
Real estate is sometimes a roller coaster with ups and downs, I guarantee you if you're not both on board, when things are rough, it will be that much harder. When you're both in agreement and support each other, it goes much easier on the hard days.
@Jerry W. Thanks Jerry! I think if I got into it and if the first one failed she would pull the “I told you so” out. However, if it ended up working out I think it would spark her interest and she would want to learn more and keep gaining properties. We’re both supportive of one another but our views on money are different (which isn’t a bad thing, but neither good lol). She does want a new car so guess I could say the rental property would technically be paying that car payment right? (Depending on the cash flow). We did just buy a new house and I might focus on paying the mortgage on that instead of investing at the moment. I do lawn mowing services on the side (not many yards yet) but I plan on using that money for future down payments on rental properties. And I do have another guy at the firehouse that seems to have a decent amount of money sitting around so I think I might try and see if he wants to partner up. Any tips on how to approach that?
@Jake Chenoweth, the first thing you need to do is get educated. Until you actually have a good understanding of what is a good deal, what is the good area of town, what is the bad area, how much rent is for a 1 bedroom, a 2 bedroom, and a 3 bedroom house and apartment how can you be ready to say look at this deal to someone? The education does not cost you anything but time. In stead of watching TV at night get out a laptop and start looking at Zillow and realtor.com, etc. Start looking at every rental add in the paper, on facebook, and local classifieds. Find and go to some local REI meet ups. Read the free online book from BP and a bunch of other books on real estate investing. Be careful about the blogs here on BP and some of the advice, some is great, some is not. I actually started investing and learned the slow hard way for quite a few years, once I educated myself things really took off. Once you actually have some knowledge you will be in a better place to talk to someone about investing. Literally run 3 or 4 houses for sale through the math to see if they pencil out for buying and renting. You will likely find that few do. Eventually you will fond some and that will be exciting. Nearly everyone of mine were distressed properties that needed some work. Then were massively cheaper, but required a lot of time to fix up, but then made me money every month. Until you are educated your wife will think your attempt to invest will be little better than playing craps and relying on a roll of the dice. Good luck bud.
@Jake Chenoweth, time for an update Bud. Have you began your investing career yet? I am anxious to see if you jumped in and if you did how it is going. Tag me and tell your story for the past 2 years.
@Jerry W. don’t be disappointed in me but I still haven’t started and I kick myself knowing when the interest rates were low was the time to get in. However, my wife and I just had our first child a year ago and I have been focusing on him.
I will say though I did make an attempt of an 8 unit apartment complex here in my town. I actually reached out to the owner and attempted seller financing. However, he forwarded my information to the agent and she reached out. She told me that I wouldn't be able to get a T-12 or current rent roll unless I had proof of funds (which I did not). So I actually reached out to guy on Facebook I never met (through REI group) who had his own established REI business and he helped me. He sent me an excel spreadsheet with formulas to figure if it was a good deal or not. And we found in order for it to be a good deal I would have to offer 600,000 less than listing. I didn't even bother with that offer cause it seemed like it would be a "slap in the face" offer.
It’s the only other complex in my town worth owning. It comes with I think another 3ish acres of inhabitable woods. I’m not 100% sure if I’m the future that area would be able to become habitable though.
@Jake Chenoweth, thanks for replying. You have a lot of moxy to start off with an 8 unit. I really like single family houses myself, but it is more maintenance per unit. Well you have to pick what interests you. Let me know if you decide to jump in. I have moved more into vacation rentals myself. I had just one for several years, but last year I added 3. They are slow in the winter, but are finally picking up some speed. Hopefully they do well this summer.