Need advice on possible investment in rough area

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Need advice on possible investment in rough area

Adam Britt
Bessemer, AL · Member since 2017 · 49 posts · 30 votes

I would like some opinions about an upcoming possibility. I apologize for the wall of text but I want to provide accurate detail for best advice.

I’m one of the millions struggling hard against a massive student debt that currently requires 1/2 of everything I make. Money is scarce even working 2 jobs.

Real estate is the only way I will ever escape. The rat race, while I am paid semi-decently, can never get me out of 12-15% interest student loans of 100k.

Paying off my loans aren’t really an option. I would need to massively increase my salary to even pay the loan down with that interest rate. Let alone pay it off.

All that is to say ... I’m dying to get into real estate, but saving up to buy isn’t practical. It would take me 60 years to save that kind of cash. So I need to use the magic of OPM (other peoples money).

Now, I have great credit and can probably get some solid loans, including from family. But I want to be very cautious from overextending myself. As such, higher price properties are ... frightening to me.

An older relative has just moved out of a 3/1 in a very rough neighborhood. I would probably consider it C/D class. She built the house in the 60s and has lived there till recently. I believe I could get the house for probably 10-15k. She is only expecting pennies for it. My ideal would be to Section 8 the house.

However, I would love y’alls opinion.

What costs would you all warn me about? Will I need to redo electrical and such due to the age of the house to make it housing compliant? What would you budget for that?

Would a rough area stop you from considering a deal like this? I see dollar signs with a 700-800$ section 8 rent with nearly no overhead if I can get this thing with 10,000$, but I don’t know what dangers and problems to expect down the line.

Please illuminate me to what you would look for! I originally wrote the house off due to expected repair costs but ... a friend who flips for an investor insisted it may be worth it if I can cover those with private loans .... unless the area itself would make this a no-go.

This is near Birmingham AL in a higher crime area in case that helps.

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Michael Ealy
Developer · Cincinnati, OH · Member since 2018 · 1k+ posts · 3k+ votes
7y
Originally posted by @Adam Britt:

I would like some opinions about an upcoming possibility. I apologize for the wall of text but I want to provide accurate detail for best advice.

I’m one of the millions struggling hard against a massive student debt that currently requires 1/2 of everything I make. Money is scarce even working 2 jobs.

Real estate is the only way I will ever escape. The rat race, while I am paid semi-decently, can never get me out of 12-15% interest student loans of 100k.

Paying off my loans aren’t really an option. I would need to massively increase my salary to even pay the loan down with that interest rate. Let alone pay it off.

All that is to say ... I’m dying to get into real estate, but saving up to buy isn’t practical. It would take me 60 years to save that kind of cash. So I need to use the magic of OPM (other peoples money).

Now, I have great credit and can probably get some solid loans, including from family. But I want to be very cautious from overextending myself. As such, higher price properties are ... frightening to me.

An older relative has just moved out of a 3/1 in a very rough neighborhood. I would probably consider it C/D class. She built the house in the 60s and has lived there till recently. I believe I could get the house for probably 10-15k. She is only expecting pennies for it. My ideal would be to Section 8 the house.

However, I would love y’alls opinion.

What costs would you all warn me about? Will I need to redo electrical and such due to the age of the house to make it housing compliant? What would you budget for that?

Would a rough area stop you from considering a deal like this? I see dollar signs with a 700-800$ section 8 rent with nearly no overhead if I can get this thing with 10,000$, but I don’t know what dangers and problems to expect down the line.

Please illuminate me to what you would look for! I originally wrote the house off due to expected repair costs but ... a friend who flips for an investor insisted it may be worth it if I can cover those with private loans .... unless the area itself would make this a no-go.

This is near Birmingham AL in a higher crime area in case that helps.

Adam,

I've done bad areas. In fact, that's how I re-started (I went through bankruptcy). I became really good at managing properties in D and even F (war zones) areas.

Having said that, it's a LOT of work. It's a LOT of headaches. And literally, I could have been shot or stabbed and good that none of those happened to me. 

One time, an 8-unit property was practically given to me so I jumped on it.  The property took so much of my time that I didn't have time for anything else. To be honest, I regretted the decision because if I handled properties in better areas, I could have done MORE properties, with less headaches and actually make MORE money.

So my advice: DO NOT DO A WAR ZONE property as your first deal.

The property, its tenants, and the headaches will ROB of your time (which in turn robs of you of opportunities to do more deals), your sanity and your peace of mind. You're working 2 jobs as it is and a property in a bad area is ANOTHER JOB. Think of it this way: that $700/month, even if we assume that's all cashflow (which it is not) - is what you're going to get paid for 10 hours/week of work (because that's what it could take for a house in a bad area). So do the math:

$700 divide by (10 hours/week x 4 weeks) = $17.50/hour

Now the reality is - the real cashflow from this property will be around half of that number ($350/month) because something always go wrong. You can have a tenant who does not pay for the month or something bad (like a fine from the city for a broken window that the tenant did but does not want to pay for).

So really, you will end up making less than $9/hour.

There are better deals out there. Just wholesale the deal to a landlord who knows what they're doing (and get paid a quick $3,000 wholesale fee, working 10 hours total to find a buyer: now that is $300/hour which is way better).

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  • John Lane
    Member since 2019 · 16 posts · 1 vote
    7y

    @Adam Britt

    I would never advise anyone to invest in real estate who was broke. Get a 3rd job, live on beans and rice.

    0Reply
  • Scott Rubzin
    Rental Property Investor · Charlotte, NC · Member since 2015 · 72 posts · 30 votes
    7y

    @Adam Britt if the rent is 700-800 i would be sure to have cash reserves.  If anything major breaks or needs repair the rent is not going to cover it.

    I always try to stay as close to that 1,000/mo rent as possible.  Also helps with the quality of tenant. 

    are there any major issues with the house now?

    0Reply
  • Garrett Pearson
    Addison, IL · Member since 2018 · 72 posts · 24 votes
    7y

    @Adam Britt First, let me say my heart breaks as I hear your student loan situation. It is sad that this is the cry of so many of our millennials who are drowning in student loan debts to get a degree to go into careers that don’t afford them a comfortable living after making their loan payments. I wish you well and hope that you can find additional streams of income that will afford you the opportunity to pay the loans off and live the life you deserve. Now my cents. I am curious to know why you feel it’s too late to take 6 credit hours to defer loan repayment until you can do a real estate deal whether it is a fix and flip or save some money to purchase and have cash flow or some other stream of income to help pay down the loans. I know it might sound counterintuitive to increase student loan debt to avoid the payments but may you can use a credit card with zero interest to pay the tuition if you attended a community college tuition should be doable. I admit it would be foolish to increase debt unless it was a means to increase income to reduce debt. In addition one of the classes could be a real estate class required for your license. You mentioned the inconsistency of a realtor’s salary but you can do that one a part time basis which can bring in additional income as well as possibility giving you first dibs on some great real estates deals not to mention the invaluable education about real estate. I know this plan doesn’t come without risk and it is not a quick fix but can be a strategy and it’s something to atleast consider. Hope everything works out for you.

    0Reply
  • John Defreitas
    Member since 2017 · 24 posts · 22 votes
    7y

    My advice would depend on how committed you are to this. I had to do D and maybe even F areas because like you that's all I could afford. If I had waited to afford better areas, I would still be waiting. I would take the deal if it as you describe, any money you "lose" is simply the cost of education. You have to be careful picking tenants, but some of my tenants in these areas pay the rent months in advance. There are good and bad people everywhere. The rehab is likely going to cost more than you're expecting. All said and done you're probably going to spend 40k to 55k to get this property marketable. If that number works for you then go for it.

    0Reply
  • Adam Britt
    OP
    Bessemer, AL · Member since 2017 · 49 posts · 30 votes
    7y
    Originally posted by @Garrett Pearson:

    @Adam Britt First, let me say my heart breaks as I hear your student loan situation. It is sad that this is the cry of so many of our millennials who are drowning in student loan debts to get a degree to go into careers that don’t afford them a comfortable living after making their loan payments. I wish you well and hope that you can find additional streams of income that will afford you the opportunity to pay the loans off and live the life you deserve. Now my cents. I am curious to know why you feel it’s too late to take 6 credit hours to defer loan repayment until you can do a real estate deal whether it is a fix and flip or save some money to purchase and have cash flow or some other stream of income to help pay down the loans. I know it might sound counterintuitive to increase student loan debt to avoid the payments but may you can use a credit card with zero interest to pay the tuition if you attended a community college tuition should be doable. I admit it would be foolish to increase debt unless it was a means to increase income to reduce debt. In addition one of the classes could be a real estate class required for your license. You mentioned the inconsistency of a realtor’s salary but you can do that one a part time basis which can bring in additional income as well as possibility giving you first dibs on some great real estates deals not to mention the invaluable education about real estate. I know this plan doesn’t come without risk and it is not a quick fix but can be a strategy and it’s something to atleast consider. Hope everything works out for you.

     Thanks for the encouragement! Interesting. I didn’t think about the concept of taking classes in order to defer the payment. While I can see that as a possibility, keep in mind the loans are in my wife’s name. So she would be the one needing to take the classes. And I don’t think there is any class out there she could take that could increase her ability to make money. She is ... not of the same mindset as I am, thus the massive loans at 15% interest. 

    0Reply
  • Adam Britt
    OP
    Bessemer, AL · Member since 2017 · 49 posts · 30 votes
    7y
    Originally posted by @Justin Larese:

    if you can get it for 10k, what would be the appraisal for the home? How much equity could you pull out? You could take an equity loan at a low interest rate say 5% and use it to pay  off some of her high interest student loans on top of having a rental. Or she could use the equity for her refinance as collateral which should provide her a lower rate. Something to consider, but if it's in your name only and she leaves you after, that's your monkey now. You need to tackle the student loans. You are trying to pail buckets of water out of a sinking boat full of holes, you will stay stuck until you can lower the amount of water coming in. In regards to high crime. Plex for plumbing replacement no one steals plastic pipes, may need to live in property to ensure no break ins until rented.

     Now that is a creative finance idea. I like it. Pull out the equity to pay the house. Sadly these student loans are about 5x the value of this house but it does give me a new idea to perhaps paying them off even faster once I get started. 

    0Reply
  • Adam Britt
    OP
    Bessemer, AL · Member since 2017 · 49 posts · 30 votes
    7y
    Originally posted by @John Defreitas:

    My advice would depend on how committed you are to this. I had to do D and maybe even F areas because like you that's all I could afford. If I had waited to afford better areas, I would still be waiting. I would take the deal if it as you describe, any money you "lose" is simply the cost of education. You have to be careful picking tenants, but some of my tenants in these areas pay the rent months in advance. There are good and bad people everywhere. The rehab is likely going to cost more than you're expecting. All said and done you're probably going to spend 40k to 55k to get this property marketable. If that number works for you then go for it.

     See, that’s exactly how I feel. If I keep waiting till I can afford a 500k A class property, I won’t be getting started. Ever. Yet I still realize the substantial risk that can come along with lower class. 40k for this house definitely may not be worth it in the end. Good way to look at it 

    0Reply
  • Justin Larese
    Crane Missouri · Member since 2019 · 60 posts · 34 votes
    7y

    Adam my wife was in your situation with 100k in student debt. We house hacked the first house by renting a room out to cover mortgage, eventually sold a property for a profit and paid off one of her highest rate loans. Less than 5 years after her graduating we have it closer to 30k left. She would be in the 80ks if I didn't use real estate as a financial tool. No matter which route you take it's going to be a long uphill push. good luck.

    0Reply
  • Staneley Cesaire
    Investor · Utica, NY · Member since 2016 · 24 posts · 26 votes
    7y

    Thank about the great business men of America! Rockefeller, Carnegie, Vanderbilt. They all started in rough areas. Do you know why they made it so rich? each gaining the title of richest in America. because they built their wealth where the rich and fancy people of the time did not want to focus on. Then they work their *** off. The success of any risk you take will depend on your effort, and your ability to not give up. C and D neighborhood have a lot of challenges, and the most money to be made. If you are ready to work, learn, and really manage property. If so you will be successful. 

    0Reply
  • Megan Pugh
    Member since 2018 · 8 posts · 1 vote
    7y

    @Adam Britt are you a teacher or professor? If you are start teaching English online friend. Great way to earn some extra income.

    0Reply
  • Igor T.
    Cleveland, OH · Member since 2018 · 61 posts · 21 votes
    7y

    There is Public Service Loan Forgiveness Program. After 120 payment you can apply if you work for government or nonprofit.

    0Reply
  • Tyler Bushey
    Investor · Biddeford, ME · Member since 2017 · 282 posts · 180 votes
    7y
    Originally posted by @Jonathan R.:

    I wanted it so badly. My veins were on fire. My heart beat out of my chest. I didn’t care what problems I faced. I’d rehab the property myself off YouTube videos if I had to (despite no mechanical or contractoral ability). I wanted to paint the walls. I wanted the feeling of pride as I held onto the porch railing. I didn’t care who told me I couldn’t do it. I was going to put it all on the line. Go big or go home. When your whole body aches for it, then and only then will you be ready. It’s kinda like that scene in Braveheart after the English commander kills Mel Gibson’s wife, when he’s on the horse coming down the hill with that look of calm on his face, but then you see his eyes, he has that look of sure fire determination, it was breathtaking. Yeah, it’s kinda like that.

     Reminds me of when I bought my first place, many people told me I'd never make it as a landlord, now they ask me for advice. It's a really great feeling finding out what you're made of!  It always makes people laugh when I tell them I learned how to do so much off YouTube! 

    1Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    7y

    Stay out of rougher areas so you won't lose the starter capital you have. Look to go work for an investment company buying larger type properties where you can work your way up and gain a small slice of a bigger pie. Show the established investor you have the fire and passion to succeed. Experienced investors like to help and show others the way that they feel are worthy,humble, and eager to learn.

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    0Reply
  • Michael T.
    Los Angeles, CA · Member since 2018 · 326 posts · 279 votes
    7y

    @Adam Britt this is definitely a good read for any new investors, those struggling to get into real estate and those that probably need just a little more time before they start investing.

    0Reply
  • Andrew Harrell
    Real Estate Broker · Valparaiso, IN · Member since 2018 · 67 posts · 29 votes
    7y

    @Adam Britt have you considered moving away from home and starting a new and race the debt and future in a new scenery? I only ask because I can feel the weight in your initial post.

    Getting into RE, especially as a broker if you wanted can be financially beneficial and maybe pay that debt off in 3-5 years. Or a mortgage lender in a little more... you have to have the abundance mindset and to help people first and not you need to make money first.

    I'd recommend investing in a 2-4 unit with an FHA, live in one unit and rent the others, get cash flow and save up and use minimum financing 3-5% on good cash flowing rentals that are very similar so you can take one expense/blueprint and reapply it almost like a assembly line. This will save you time and allow you to focus on fine tuning it.

    Good luck!

    1Reply
  • Jonathan R.
    Investor · Wichita, KS · Member since 2017 · 584 posts · 813 votes
    7y
    Originally posted by @Joel Owens:

    Stay out of rougher areas so you won't lose the starter capital you have. Look to go work for an investment company buying larger type properties where you can work your way up and gain a small slice of a bigger pie. Show the established investor you have the fire and passion to succeed. Experienced investors like to help and show others the way that they feel are worthy,humble, and eager to learn.

     While I respect your opinion, we are going to have to agree to disagree that he should in a sense kiss up to an investor doing larger deals with hopes he can gain a small slice of a larger pie (I know that isn’t what you said, it’s how I felt while reading it, and for that I do apologize). Perhaps he is better suited for passive investing where someone else drives the ship. But, I see little impact there, it sounds like kissing up to a boss and a longer time spent in the rat race. 

    If the OP wants to learn, watch tons of podcasts, listen to Brandon Turner’s webinars, pour over the forums, and throw your life savings on the line and buy a distressed property (you pick the class based on your budget and appetite). He may lose a few bucks (I doubt it though if he paid attention to the webinars and podcasts etc). He may learn he could have done the property for cheaper, but that is amazing learning at it’s best. You don’t learn to ride a bike on training wheels, you learn by falling on your butt. 

    Your advice is not all bad, I like the idea of finding a mentor, someone doing the investing he would like to do. But kick off the training wheels quickly and do a deal.

    His interest rate on student loans is 12%, he’s got to do deals north of 20%, you must be active for this. Or, he can take the advice of the sheep that tell him to start investing when he’s 50 after his loans are paid off. This truly is a moment for him to draw a line in the sand. Are you sheep or are you a wolf?

    0Reply
  • Piotr Lejwoda
    Member since 2019 · 1 post · 0 votes
    7y

    Ok I don't know about the area or this particular investment, I am guessing you are new to real estate from your post, I would follow the most simple rule of financial wellbeing: unless you know you can make more money from your investments than interest paid on your loans, always pay off your loans first. Can you make more than 15% of this property? Maybe, but as a new investor in D area it might be harder than you think and even advanced investors can't go over 10% sometimes with repairs, time to find tenants and managing it. If you can get low-interest loan to take it and use it to pay some of that 15% this is an instant benefit to your financial wellbeing. If you get loan for this and you end up with eviction you end up with even more loans and no cashflow.  

    0Reply
  • Frank D.
    Real Estate Investor · Toronto, Ontario · Member since 2014 · 58 posts · 21 votes
    7y

    Don't do it ...if you don't have reserves do not do it or you'll be the guy that a wholesaler will be getting a house for on Pennies on the dollar.

    One round of bed bugs or a broken furnace or a vacant unit that gets overrun by homeless people and you're done, big time, don't do it you're not ready at this time keep studying keep learning keep following different discussions

    1Reply
  • Michael S.
    Miami, OK · Member since 2019 · 36 posts · 15 votes
    7y

    OK.  I freely admit that I am brand new here and I have no right to be giving you advice.  But I feel that I have a suggestion.  Have you considered network marketing?  My wife works at the local hospital.  I'm pretty sure that the town we live in is the armpit of the entire world.  I used to talk to international people on ICQ back when the 'net was young.  They asked me almost constantly how I liked living in Florida.  So I told them repeatedly that I lived in Oklahoma.  My wife makes  a lot of money.  But she pays for it with her life.  I have not worked since I was 25.   That was around 2005.  Now I am very involved at my church.  I'm still doing the wrong things, but I am coming up with plans on how not to do them.

    In January I decided that I needed to invest some of my wife's money in areas that grow more.  She is very active on FB, so she tells me about her friends that sell for other companies.  I bought into two companies:  Younique and Paparazzi.  (I hope this doesn't violate the T&C for this forum).  Younique signed a deal with Network Marketing guru Eric Worre.  They can now share some of his videos legally.  To Younique consultants.  In one of his videos, Worre says that "Everything is hard...until it's not."  He then goes on to list several things like learning to walk/talk, learning to ride a bike, etc etc.  Whenever I feel like I'm getting burnt out with the whole thing, I go and watch one of his videos.  And then I'm excited about selling again.  Granted, I am younger than you are.  In July I will be 40.  I don't know anything.  I still have about 20k in student loans from when I believed that I was going to be a computer programmer someday, but the rates are far lower than your wife's 20%.  I did have loans at higher rates, but my parents (who are far more influential than I was at that point) made some phone calls and got them forgiven.  Now I only have the Federal Stafford loans at 3.78% and 4.3%.   They'll be paid off in about six years at the current rate of repayment.  I hope to increase that rate soon.

    Also, my wife owns a house.  She has a car too, but it's paid off.  At least I did THAT right.  Eric Worre says that every situation he faces ends one of two ways:  He wins, or he learns.  I am still trying to get to the point were that thought is completely internalized.  We still owe ~$35k on the house.  I think we're almost out of the awkward phase of amortization.  It was $48k when we started.

    I'm going to hit the magic Post Reply button now before I talk more about my situation.  I'm just excited because it's been so long since I had anything to say.  It's exciting to find someone who needs what I know.  OK.  I'm sending this now.

    1Reply
  • Account Closed
    Real Estate Agent · Columbus, OH · Member since 2012 · 4 posts · 1 vote
    7y

    I don't know your entire story but have you thought about buying a 3-4 unit and living in it for awhile to help with cash flow? You can use an fha loan with only 3.5% down. You might even be able to use some type of grant money from the state to use as a down payment. If you have time after your primary job maybe look into getting your license. I know several part time agents who make decent money selling real estate part time. Use that money to put towards your student loans only. And 12-15% even for private student loans seems high.

    0Reply
  • Trevor Ewen
    Rental Property Investor · Weehawken, NJ · Member since 2014 · 1k+ posts · 704 votes
    7y

    @Adam Britt

    Several of the ideas here on having reserves are 100% in play. Lower-end properties will need more hands-on, crisis-level work. This is why you can inevitably expect a higher return per dollar invested up front. So much of that return is eaten up by management, unless you have the skills and abilities. There are three areas where I see this play working out. Almost all others are going to end up being a pain in the neck:

    1) Possible future turnaround for the neighborhood: To be clear, this is what most people assume is going to happen. I have known more than a few cases where it absolutely did not, and people (quietly) cut their losses. In this situation you need reserves, patience, and a story and data points for how the area is going to turnaround. Maybe it's close to a critical area for jobs in Birmingham. Maybe there is a new immigrant population that has flocked to the area. Maybe there is a university down the road that has a housing need and is rapidly expanding. If you can't find the story, it's probably because there isn't one. Do not make one up, but if there is something compelling, you should chase it down.

    2) Stable numbers, consistent management: This is a common situation for places that have stabilized. Typically, crime numbers have gone down over the years but the economy has not come back in any meaningful sense. Section 8 & landlord/tenant laws are critical pieces of the puzzle here. Alabama is fairly friendly to landlords, so you may be in good hands. The goal here is to consistently manage yourself to a decent return. NOTE: I would not self manage this. There is a certain class of manager that can handle this, but it takes the most experience. If you can't find a manager to do this, then do not expect the 'stable' part of this equation to mean anything. This is when you have accepted the long hold and partnered with the right people to keep the lights on. This is completely unglamorous. Although, many real-estate success stories were forged with this diligence in mind.

    3) Get your hands dirty: If you want to do this full-time and like this segment of the market, then it's a chance to learn everything. NOTE: You will go insane, and lose a bunch of money. You will be annoyed constantly and your life will lack stability. If you can take those lessons and build systems around them, you can become what investors like me are looking for: A decent manager with experience in class C areas. It's a sweet niche to be in. So many people want exposure to this, but they can't find a partner willing to do the hard stuff. If you go this route, you need to milk everything you can in the short-term. Talk to city government. Go to local meetups. You cannot afford not to be a fixture in this community.

    Outside of these cases, you likely have a problem on your hands. I wouldn't jump too fast regardless, as it seems like income / wealth stabilization may be a more pertinent goal in your near future.

    0Reply
  • John Patton
    Investor · Birmingham, AL · Member since 2016 · 315 posts · 206 votes
    7y

    Bessemer in my opinion is not a desirable area for investments property. I bought my first property in Bessemer over 14 years ago. Sold it 6 years ago.  Got out and not going back. In Bessemer some areas just steal and others steal & shoot guns and sometimes people’s dogs. 

    If you really want to get to know a neighborhood drive around it during the week right after lunch and see who’s hanging out on the street. Then stop and talk to the local mail carriers about the neighborhood also talk to utility workers working the areas. These folks are on these streets every day and they know what’s going on. Good luck. Jp

    0Reply
  • Bryan Miles
    Residential Real Estate Broker · Birmingham, AL · Member since 2015 · 139 posts · 43 votes
    7y

    Hey Adam,

    I'm curious what you are calling a C/D neighborhood? I happen to be a huge fan of these areas. There are definitely areas, neighborhoods, streets and blocks that I will not own a house; however, I believe you can make most any house work for you. If you consider wholesaling the house will you give me a call. 

    2Reply
  • Timothy M.
    Arlington, VA · Member since 2015 · 60 posts · 100 votes
    7y

    My man, @Adam Britt, you do notttt need to be in real estate right now.  

    You say you and your wife have 100k in student loan debt?  Even if that debt is at 10-15% interest, what you two need to do right now is hustle with second jobs (or advance in your own career) to the point where you can pay off that anchor. Even if you have to 'eat' 15k in interest a year, surely you can - between the two of you - save $20k a year between your 9-5 and extra work on the weekends?  

    That puts your worst-case scenario at about a 20 year payoff.  This is a much, much better plan than moving overseas and never coming home (did someone up in the thread earlier actually suggest that or am I taking crazy pills?). This is also if you NEVER refinance the debt - which you will certainly do at some point, taking it to a more 'comfortable' 6-8% and freeing up thousands per year in interest payments - so your payoff will be much, much quicker, I imagine.

    Important - and perhaps uncomfortably direct - questions. You have said a number of times that your wife incurred this debt. Is she working?  Did/does she have a plan to contribute to paying it down? I think you said upstream that she is not as concerned by this debt as you are.  

    Hang in there - now is not the time to start making crazy decisions like buying homes in the hood (which will contribute what, like $200 a month towards your bottom line?). Get a plan, buckle down, work an extra job, and you'll look back on this in < 10 years no worse for the wear, a little more grizzly but a lot wiser and ready to crush some RE.

    ETA: I re-read upstream and see that you're already working on the weekends, My hat is off to you for the hard work, and from one internet stranger to another, I genuinely hope you are able to snag some raises in the near future with that work ethic.

    Back to the more delicate matter I raised earlier - is your wife working...?

    0Reply
  • Adam Britt
    OP
    Bessemer, AL · Member since 2017 · 49 posts · 30 votes
    7y
    Originally posted by @Timothy M.:

    My man, @Adam Britt, you do notttt need to be in real estate right now.  

    You say you and your wife have 100k in student loan debt?  Even if that debt is at 10-15% interest, what you two need to do right now is hustle with second jobs (or advance in your own career) to the point where you can pay off that anchor. Even if you have to 'eat' 15k in interest a year, surely you can - between the two of you - save $20k a year between your 9-5 and extra work on the weekends?  

    That puts your worst-case scenario at about a 20 year payoff.  This is a much, much better plan than moving overseas and never coming home (did someone up in the thread earlier actually suggest that or am I taking crazy pills?). This is also if you NEVER refinance the debt - which you will certainly do at some point, taking it to a more 'comfortable' 6-8% and freeing up thousands per year in interest payments - so your payoff will be much, much quicker, I imagine.

    Important - and perhaps uncomfortably direct - questions. You have said a number of times that your wife incurred this debt. Is she working?  Did/does she have a plan to contribute to paying it down? I think you said upstream that she is not as concerned by this debt as you are.  

    Hang in there - now is not the time to start making crazy decisions like buying homes in the hood (which will contribute what, like $200 a month towards your bottom line?). Get a plan, buckle down, work an extra job, and you'll look back on this in < 10 years no worse for the wear, a little more grizzly but a lot wiser and ready to crush some RE.

    ETA: I re-read upstream and see that you're already working on the weekends, My hat is off to you for the hard work, and from one internet stranger to another, I genuinely hope you are able to snag some raises in the near future with that work ethic.

    Back to the more delicate matter I raised earlier - is your wife working...?

     An astute observation my friend. I like your style, your direct approach, and your sense of humor. 

    My wife currently works part time. After being “downsized” twice from full time work. She is now working for about 400$ a month (for that same company ironically) while also chasing her dream of owning her own business. A business that has not born the fruit of financial profitability of yet. 

    And so, you have uncovered an underlying psychosocial issue that further muddies the water. She could get a job elsewhere making 30-35k a year, like she did before. This would theoretically allow us to pay off debt easier. Or she could continue to pursue her long-time dream of building her creative floral business from the ground up... and we basically rely on my multiple job efforts for all consistent income and debt payment. 

    I am definitely getting the raw end of the deal, but it comes down to this: Crush her dreams so we can pay off debt and I can fulfill my dreams of financial freedom? Or struggle alone to find creative ways to reach my dreams and goals while she also pursues hers ... that is the question. 

    (To more directly answer a secondary question- she ended up with 75k in student loans for a useless bachelors degree that does not add any value at all to her work opportunities. Long story and not really important, because it is a good 20 years too late to do anything there. Thank the “Every student should go to college no matter the plan” mentality of parents of the previous generation.)

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