All Forum Posts by: Deb S.

Of course! No worries. Just sharing information. 

@Jules Aton I completely get it that some people need the deduction now. However, if you can do without the deduction now, you'll be better off paying the extra taxes now on the 'seed' instead of the 'harvest' later. See previous post with picture.

If you have maxed out all places to put your money, I would consider using permanent life insurance to 'be your own bank'. You can overfund a policy to build up cash value that can be accessed tax-free to supplement your retirement (or use for whatever you want). No age or income restrictions, no exposure to market volatility, no RMDs etc.....and did I mention no federal income taxes?! 

Yes, I am a life insurance agent and everyone should know that there are other options for saving money/reducing taxes. This isn't taught in school unfortunately. If you want to build wealth, learn how to pay less taxes - it's one reason why the wealthy are wealthy!  

Hi Dylan, I don't have advice on who you can talk to but.........regarding your employer's retirement: we are paying some of the lowest income taxes in history and I personally believe that we will not be paying lower taxes in retirement (not the way things are looking). The small tax savings you are getting now will pale in comparison to the taxes you will have to pay on a giant pre-tax retirement account that has grown over several decades. See attachment for an example of what I mean.

Diversification is something an advisor should discuss with you. I would reduce your contribution to whatever the employer match is (if there is one).
If your employer has a Roth (after tax savings), max it out so this money can grow tax free. Put any additional money in savings to use for a down payment on property.  Hope this helps.

Hi Alex,

You're right in that there is no 'right' strategy, only the one that is 'right' for you and your situation at this particular time. Do you have a job? Any savings?

You have the advantage of being young and THAT'S when to start investing - in anything!!! The more time for your investment to grow the better. If you're just starting out, I suggest joining some local RE investor groups. You can learn a lot from others who are already doing it as well as get some advice on 'what they might do differently' (hindsight can be quite a learning experience). You can partner up with someone with experience for your first RE deal to get some experience and learn. Just be choosy about who you partner with-you want a trust worthy and honest partner.

Now, if your goal is to create generation wealth, not be chained to corporate and have time to enjoy life then most likely that will include owning some real estate in your portfolio. I tell everyone to diversify. Have some real estate, own stocks/ETFs/mutual funds, own some gold etc. If the market tanks, you don't want to have EVERYTHING you own go in the red. If the housing market tanks, but you're invested in the market also then hopefully you're still growing wealth in that area and vice versa.

Keep in mind that gains in the market are taxable (unless in a IRA). The market is volatile and not liquid. Meaning that if you need money, you'd have to sell something you own and it may not be a good time to sell if the market is recovering or going down. Spread your risk out.

Most wealthy people own SOME or A LOT of real estate. There's a reason for that - lots of tax advantages which is what wealthy people need. Hope this helps!  

Glad to see you're going to pursue multifamily. Good way to be able to scale. 

Regarding 15 vs 30 year, one of my questions would be do you need the cash flow the property will generate because you will deplete your savings by putting 20% down?

Typically, low interest debt is good debt. Although rates aren't as low as they used to be, historically rates are still very low. The interest that will be paid is going to be paid by the tenants. With a fixed rate mortgage, your payment stays the same BUT you will be doing rent increases annually which may or may not add to cash flow depending on other expenses.

Don't forget RE investing is not all about cash flow. It is a great tax haven and that's one reason many people invest. You get to claim depreciation every year and hopefully the property is appreciating every year. Add that to cash flow, expenses you can deduct, etc and you have a profitable property. 

Look at the big picture and what your goals are. You don't want to have too much equity sitting in a property that you can't access. AND....god forbid if there is another housing market crash and you have a bunch of equity in a property, it goes poof. If you only have a small amount of equity, there's less to make up. Keep your equity liquid - it also deters people from suing you.  Just my two cents.

Hi Felicia,

You have the right mindset for wanting to care for your family. Based on the info you provided, it would seem like it makes more sense to pay down your husband's debt first. How much debt does he have? I'm going to assume it's mostly credit card debt and maybe a car loan?

I have 2 ideas for paying that debt (if those interest rates are high): 

one is that if your husband has a 401k at his employer, he could take out a loan (which typically has a very low interest rate) and use that money to pay off the debt or most of it. Now this loan will not show up on his DTI because only his employer knows about it, nor does he have to qualify for it like a traditional loan. Obviously the loan needs to be paid back so he can make payments to his 401k rather than the creditors he is paying now that are charging higher rates. And if he really wants to pay it off faster, than he can stop contributing to the 401k and add THAT amount to the amount he pays the creditors each month to get it paid faster.

option 2 is to use a HELOC to pay off the debt but I'm not sure you'll qualify with the DTI being so high. You could speak to your bank and ask what the criteria is for qualifying for a HELOC.

Keep networking with those real estate ladies and learn from them. You want to surround yourself with people that have the knowledge and skills you want. I know this isn't the answer you were hoping for but it will be difficult to create generational wealth if you're already starting in a hole. Take care of yourselves first and THEN build generational wealth.

If you want to scale, go the multi-family route. Would you rather have 10 SFR homes to maintain, 10 insurance bills, 10 property tax bills, etc.... Or 1 apartment building with 10 units?

Multi-family also doesn't hurt as much when a tenant moves out since you have other rents coming in to pay the bills. Single family you'll most likely have some gaps when turning over and it's the only income for that property.  Just something to consider.

@Rick Zink since you've already closed on those properties, HML is a bit late.

If this opportunity is really something you want, maybe you can JV with someone who has the funds needed. You can work out a repayment of 50% (or whatever split you negotiate) of the money put in after you flip a property or 2. Just make sure this is someone you want to partner with - same values, ambition, goals, etc.

You may want to try building relationships with some local DSCR lenders. I would go in and speak to them about your plan and ask what their requirements are if you were to do a DSCR loan after a renovation. Some lenders have longer 'seasoning' periods than others. Ask what their fees are, how long to close, documents needed to close, do you need a certain credit score (you shouldn't since it should be based on the income the property can produce). You don't want any surprises when you are done renovating and ready to refi.

Relationship building is a big factor when investing. You'll get better and quicker service with a repeat lender who knows you and what your goals are.

@Lawrence Adair 

I love your mindset and mission! Sounds like you’ve already built a strong foundation through hard work, and now you’re focusing on what truly matters—financial freedom and creating a legacy for your children. Real estate is a great asset for wealth-building, and pairing it with the right financial tools can amplify your results even more.

One strategy to consider that aligns perfectly with your goals is using a properly structured permanent life insurance policy for Infinite Banking. It allows you to grow and access capital tax-free, protect your family, and create a financial system that your kids can use for generations. Many real estate investors use this strategy to fund deals, and even replace the need for traditional banks by using the cash value built up in the policy.

I’d love to connect and share how this could fit into your real estate wealth-building plan. No pressure, just a conversation to explore if it’s a good fit for your family. Let me know if you're open to it! 🚀