All Forum Posts by: Josh Day

Chris Mason this might be a silly question, but does the cash out refinance money actually have to go to student debt or could I use that money to save for another property? How do you look at healthcare workers that work PRN. I've read that your tax returns need to show 2 years of PRN work. I plan on working a full time job for a year while working PRN 1-2 days/week to qualify for a house. Then switching to solely PRN work for personal reasons. Would that time working PRN 1-2 days/week count for 1 of the 2 years working PRN so that I could qualify for another loan in 1 year? 

@Nicholas Covington as a LO, how do you look at healthcare workers that work PRN. I've read that it needs to show 2 years of PRN work. I plan on working a full time job for a year while working PRN 1-2 days/week to qualify for a house. Then switching to solely PRN work. Would that time working PRN 1-2 days/week count for 1 of the 2 years working PRN so that I could qualify for another loan in 1 year? 

Chris Mason Could you elaborate on what this means, "student loan debt cash out refinance for folks that already own property." I've never heard of that before. Also, I was talking to a loan provider today and they told me that if I'm going to use an FHA loan, that my student debt for DTI is calculated at 1% of total student loan balance regardless of what my actual student loan payment is. They said that with a conventional loan the student loan debt for DTI is determined by your actual payment amount reflected on your credit score. Was I told correctly?

@Craig CurelopWe are willing to sacrifice a little now for the gain of financial freedom later. The reason I'm investing so much into IRA is to get decrease the amount I pay each year in taxes and since my wife is self employed we will have a solo 401K that will allow us to roll over the funds from the IRA. With a solo 401K you can invest those funds in real estate. The reason we are doing the self directed IRA is the same. This is something I've read about others doing on BP. Have you heard of anyone using this strategy? Also, I like the idea of index funds as a place to save up for a down payment. Who do you use to do this?

@Elizabeth Wilson We are glad to be back in Memphis! I would love to hear how you used the self directed IRA to invest in real estate. Is there a reason you did not use a solo 401K? Thank you for the heads up on the duplex market in Memphis. Does the same go for triplexes and quadplexes? The main reason we want to do a duplex is house hacking to have tenants pay majority of PIM. Also, we want to be qualified as landlords to be able to lower our DTI. This will help us invest in more real estate sooner than starting in SFH and waiting to move out to rent out home and then 2 years to qualify as a landlord. I've read on BP that you have to have rental income for 2 years to qualify as a landlord to be able to essentially cancel the mortgage payment debt on your rentals and lower your DTI. What are your thoughts on landlord status and lowering DTI? Also, since I'm still in school I don't really control my work schedule yet so I can't come until after August 26th. But I plan on being there August 30th. Looking forward to meeting everyone!

@William W. Humphrey thank you for sharing in PM that the max limit per year is $,6750 and that is the max you can put towards HSA, even if you have many accounts or if your wife has a separate HSA.

Newbie here from Memphis, TN longer read, but I would love some advice/input. I will start working with my doctorate in physical therapy in November. My family of 4 plans on using an FHA 203K loan to BRRR house hack a duplex as our first "home" when our lease is up in May. Our strategy is long term buy and hold. We have $6K for our emergency fund and $20K for a down payment saved up. We have mid 700's credit score. I've looked into using the Tennessee down payment assistance program and it seems as though we would qualify, which would be nice to keep the $20K saved for down payment and invest in another rental property. We plan on living in the duplex for 1-2 years then live in flip a SFH for 2 years to either sell or keep as a rental and continue the live in flip a SFH method until we reach financial independence, which for us is $4K per month. We will be able to save $20-25K a year. My plan is to contribute to my future companies 401k to their match point probably around 6% leaving $16-21K left to save for investments. We plan to open a traditional IRA for both my wife and I, which will allow us to put in $11K a year and invest the remaining $5K or $6,650 into a self directed health savings account (HSA). My wife is self-employed, although very minimal income so we plan to open a solo 401K and rollover the traditional IRA funds into it. This will allow us to invest all of our tax free savings each year, besides company 401K into buy and hold real estate.

Newbie here from Memphis, TN longer read, but I would love some advice/input. I will start working with my doctorate in physical therapy in November. My family of 4 plans on using an FHA 203K loan to BRRR house hack a duplex as our first "home" when our lease is up in May. Our strategy is long term buy and hold. We have $6K for our emergency fund and $20K for a down payment saved up. We have mid 700's credit score. I've looked into using the Tennessee down payment assistance program and it seems as though we would qualify, which would be nice to keep the $20K saved for down payment and invest in another rental property. We plan on living in the duplex for 1-2 years then live in flip a SFH for 2 years to either sell or keep as a rental and continue the live in flip a SFH method until we reach financial independence, which for us is $4K per month. We will be able to save $20-25K a year. My plan is to contribute to my future companies 401k to their match point probably around 6% leaving $16-21K left to save for investments. We plan to open a traditional IRA for both my wife and I, which will allow us to put in $11K a year and invest the remaining $5K or $6,650 into a self directed health savings account (HSA). My wife is self-employed, although very minimal income so we plan to open a solo 401K and rollover the traditional IRA funds into it. This will allow us to invest all of our tax free savings each year, besides company 401K into buy and hold real estate.

Blake King I am in a very similar situation to yourself. Thanks for posting. This thread has been great! I especially like the 401K loan option, thanks Ed E. Like you, I do not want my money just sitting in an account even if it is not a large amount, I want all of my money working for me. With that said, I use Lake Michigan credit union to hold my money in. It gives 3% APY with very easy requirements that I'm sure you already do with your current bank. Also, I use betterment to invest any extra money. But I've thought about switching that extra money to Wealthfront since it is a small amount, currently less than $4,000. There are no fees with wealthfront on the first $10,000 invested, $15,000 if you refer a friend.

@Daniel Ortiz I'm sorry you do not qualify for the program, it really is perfect for my situation. Before I found out about this program, I planned on refinancing my student loans using Sofi or something like that to decrease interest rate from 7% to around 2%. Maybe this could be an option for you so that you could invest your money in real estate and not have to worry as much about the high interest rates of student loans.

Daniel Ortiz I'm by no means experienced. Sounds like you are going to be graduating with a large amount of student debt, assuming more than 100K like me since it would take you more than 10 years to pay it off living frugally. I am going to be graduating with a healthcare degree, so I plan to utilize public service loan forgiveness. I'm not sure if you've heard of this program or not. It's a life changer for my situation. The Public Service Loan Forgiveness Program is available only to employees of: Federal, state, local, or tribal government organizations, a 501(c)3 nonprofit, a not-for-profit that’s not 501(c)3 designated but meets other requirements related to public service, AmeriCorps, in a full-time capacity, or the Peace Corps. You have to work what your employer considers full time for 10 years, it doesn't have to be same job the whole 10 years. Instead of paying the standard minimum amount, you pay using an income based repayment plan. If I was not going to use this program and pay off my student debt in 10 years, my monthly payment would be roughly $1,600. With this program and income based repayment plan my monthly payment will be around $300. At the end of 10 years, the remainder of your debt is forgiven. The best part is you don't have to pay taxes on the forgiven debt. Here is a link if you want to learn more. https://studentloanhero.com/featured/public-service-loan-forgiveness-do-you-qualify/ I know this program has a lot of questions around it currently with the political climate. But as of now, there is no cap to what can be forgiven and as long as you become apart of the program before /if something changes, you should be grandfathered in.

I will be graduating physical therapy school in August. My family and I will have $20,000 to purchase either a small live in flip or live in rent home. Our goal is start investing in more real estate outside our primary residence as soon as possible. Ideally we would have started with a duplex or triplex, but we did not know about real estate investing until recently and now we have two young kids and do not want to deal with tenants right next to us. We will be using a FHA loan to buy our primary residence. Besides FHA and VA loans, are there other loans that do not require the typical 20% down so that we could hopefully purchase another rental property with the remainder of the $20,000? Also, which type of property should we purchase for our primary residence a live in flip or live in rent? Thank you for any help provided.