All Forum Posts by: Michael R.

Welcome! Be sure to set up your key word alerts!

I was active duty and I do not regret investing in my TSP. I would recommend it as a way to diversify your investments if you do not have any other vehicles to invest in. I did not at the time--and really REI and your TSP should be considered in your investment strategy. What are your goals for your investments? What else would you do with that money? Would you invest in a fund elsewhere in a Roth IRA structure? Many different things to consider.

I hope that helps.

@Beau Walsh A lease option is where you lease the place to someone and a portion of the rent they pay each month goes towards a down payment.  I am not an expert on lease options -- but that is the general idea.  With the lack of cash flow though, I am not sure it is a great idea.  Breaking even and losing as little as possible sounds ideal.

I hope that helps.

@Zachary S. My education paid for through my GI Bills; however, my wife has student loans and you need to pay these off ASAP.  We are paying off debt while we invest; however, we had significant debts elsewhere and are on a strict payoff of our debt with specific pay off milestones in our debt payoff plan.

A rough estimate to the cost of your debt is $50K * 6% = 3,000 / year.  So evaluate if where you are going to invest will beat that-- because that is an Annuity that is guaranteed to your creditor. To your questions:

1. What kind of financing will I qualify for? 

 - Your income history will dictate this.  So if you have no W2 or 1099 income history -- you won't qualify for anything.  But you can always go apply to find out.

Will having these federal loans impede my ability to get decent conventional financing or will I need to look for outside help. 

- Yes these loans will be looked at just like any other debt.  If a bank won't give you the money -- then look at your situation honestly and transparently -- maybe there is a good reason. More on this below.

Should I start meeting with local banks and lenders to see or how should i go about it?

- Absolutely - get as much feedback as possible.  Walk in the bank and ask to talk to an associate about financing.  It won't cost you anything and what's the worst they can say?

2. To plan for the worst and as @Fredrik Lundström mentioned- if a property does goes south which can certainly happen, what would happen to student loans i can't file bankruptcy on.

You would still need to pay on them - so the answer is to put yourself in a situation such as:  Work for two years and pay your debts while you save up enough to buy a duplex or triplex in order to house hack yourself into.  I mentioned maybe a bank won't give you the money because you would be over leveraged.  

REI is no different than any other investment vehicle -- there are conservative investments and there are more risky investments.

One way to get into this situation would be to have 20% down for a duplex with a 6 month emergency fund in the bank - and I mean 6 months of living for when you are in the duplex -- assuming that you have no one in the other half.  So your worst case scenario is you have to pay your entire mortgage and student loans all on your own.  Ideally once you are in the duplex, rent the other side out and live nearly if not totally rent free.  

What all of these numbers look like to you will be determined by your budget, lifestyle and the types of investments you want to invest in. While you go to work for your two years get involved in REIA's, BP Meetups, find a local mentor etc and who knows -- maybe you'll meet someone that can help advance your plan.

All of this hinges on what you are doing now which is -- developing a strategy and developing a REI Plan.

I hope that helps.

@Shar Day Engage your tenant - see what is going on.  Empathy may be a good thing in this case as this seems to be the first time it has happened.  Has their situation changed to where something is going on in their life?  Late fees help, but you do want to determine why the sudden change in behavior and if this will impact the coming months in order to handle it the best way.  Over communicate and get your policies in order to mitigate any further problems.  Make your expectations clear and put them in writing.

If you sell it you make nothing. Will you cash flow if you rent it or turn it into an executive rental? What about a lease option scenario?

This definitely sounds like an option for the potential cost savings alone. Keep us posted!

@Linda Weygant I took a look, but I don't love it to be honest.  Note that is just my opinion of course so if the discussion is Plywood vs Formica or any other material -- then the things to consider are time it will take to fabricate and install as well as what your competition in your market is offering / market demands.

@Kyle Penland - How long will it take you to build and install the plywood counter top -- and what is your time worth.  Is it dense enough to handle tenants?  It was mentioned that tenants will be hard on counter tops.

What else is being installed in the rentals in your market?  Is butcher block valued or in demand from your market?  Price wise this doesn't seem like it would over improve from a materials stand point -- but in 2 years will it need to be replaced where as you could get longer life out of another product?  

I don't know to be honest, just asking to ask.  

I hope that helps.

Wood meaning butcher block?  I would go with these and have them in a kitchen that has granite, but not for a cutting surface which means you will seal them.  Also - for rentals, I would not spring for American made -- I would go to a place like Lumber Liquidator and pickup Chinese made butcher block as it is much cheaper.  It's glued together with smaller pieces and is much heavier because of the amount of glue - but once it's sealed up - it will last.  It looks nice too. Incidentally - they can be sanded and resealed if a tenant abuses them (cuts on them, stains them etc).

I hope that helps.

I wouldn't buy it for investment or primary residence, nor would I buy it for a long term strategy.  Even for a short term strategy -- your potential buyers would ask the same questions.  

I hope that helps.