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Message
re: 401K v. Real Estate
Posted on 1/30/17 at 12:15 pm to 632627
Posted on 1/30/17 at 12:15 pm to 632627
quote:
Merrill Lynch won't be calling me at 1am to tell me that a pipe broke.
this problem goes away with good property management fixed into budget.
quote:
I won't need to spend 3 months evicting a shitty holding.
make sure you invest in landlord friendly states first which greatly alleviates those issues.
0
Posted on 1/30/17 at 12:18 pm to bobaftt1212
quote:
I feel like I have substantially more control on my real estate holdings than I do on my 401k
of course you do. That is one of the major flaws of a 401k. lack of control.
quote:
There is also the benefit of leverage.
without a doubt
Posted on 1/30/17 at 2:49 pm to Fat Bastard
(no message)
This post was edited on 1/30/17 at 11:49 pm
Posted on 1/30/17 at 3:33 pm to Mr. Hangover
I know your post is aimed at Mr. Bastard but thought I would chime in.
Don't worry man. I had no clue about REI until 24 months ago and dove in. Don't worry about "making up ground" but just start trying to learn. Get on BiggerPockets. It is a great resource for information on REI and a good tool for networking too.
If you don't have the financial means right now, start saving or look to alternative means to get capital. Take on a partner (what I did), look into Home Equity loans, or just meet with a few banks to see if any can provide you with a line of credit. You really don't need a tremendous amount of money to get started.
I started thinking about REI as a way to help my wife stop working at 45 and set myself up for an a better retirement. I hate the fact that she works but we still rely on a second income stream for our lifestyle. That gave me a goal of about 10 years, which (knocking on wood), I am looking good so far.
Besides BiggerPockets, there are a bunch a knowledgeable people on this board too. Fat Bastard, I love Bama and others have some really good threads that you can find.
Don't worry man. I had no clue about REI until 24 months ago and dove in. Don't worry about "making up ground" but just start trying to learn. Get on BiggerPockets. It is a great resource for information on REI and a good tool for networking too.
If you don't have the financial means right now, start saving or look to alternative means to get capital. Take on a partner (what I did), look into Home Equity loans, or just meet with a few banks to see if any can provide you with a line of credit. You really don't need a tremendous amount of money to get started.
I started thinking about REI as a way to help my wife stop working at 45 and set myself up for an a better retirement. I hate the fact that she works but we still rely on a second income stream for our lifestyle. That gave me a goal of about 10 years, which (knocking on wood), I am looking good so far.
Besides BiggerPockets, there are a bunch a knowledgeable people on this board too. Fat Bastard, I love Bama and others have some really good threads that you can find.
Posted on 1/30/17 at 3:51 pm to Fat Bastard
This post was edited on 8/21/18 at 3:51 pm
Posted on 1/30/17 at 4:31 pm to Titan
quote:
I actually have roughly 300k to play with plus excellent credit
Dude, well done!!
quote:
cant seem to find properties that would actually produce a positive cash flow
This is where networking would come into play. Look into local groups on BiggerPockets. It's where I met my realtor and have been to a few local REI meetings that helped me tremendously. With that kind of cash on hand, good credit and a market like DFW, there is no reason that you could be kicking arse with some rental properties.
Posted on 1/30/17 at 4:41 pm to stevengtiger
Thanks for the reply. I just went and signed up for a biggerpockets acct. Hope I can learn some ways to get going in a positive direction. Thanks again!
Posted on 1/30/17 at 7:39 pm to stevengtiger
Awesome... thanks for the reply, sorry I didn't get back to you sooner.. I'm going to go browse that site later on tonight
Seems like a huge site, any links on a good place to start?
Seems like a huge site, any links on a good place to start?
This post was edited on 1/30/17 at 7:40 pm
Posted on 1/31/17 at 7:46 am to The Johnny Lawrence
A couple of thoughts on your spreadsheet: The max you are allowed to invest in a 401k (if you're under 50) is $18,000. Your spreadsheet also doesn't factor in yearly investments, only returns on your initial investment.
If you want a true comparison, you need to come up with an amount of "disposable yearly income" to invest each year into each category.
If you want a true comparison, you need to come up with an amount of "disposable yearly income" to invest each year into each category.
Posted on 1/31/17 at 7:58 am to stevengtiger
Does anyone here have any experience using a HELOC for a downpayment on a rental? Is there any downside to this method?
Posted on 1/31/17 at 8:14 am to Mr. Hangover
quote:
Seems like a huge site, any links on a good place to start?
I posted a very simple post on the blog page with location and what I was interested in doing. Had about 15 reply's within the first day or so and one was a guy contacting me about a local REI meeting. The site is intimidating but there is a TON of information.
Posted on 1/31/17 at 8:31 am to Delacroix
quote:
Is there any downside to this method?
Instead of using our LOC for the down payment, we will use it to purchase the home. After 30-60 days, our bank will allow us to roll them into a more fixed rate product.
The only issue that we have had doing this is that our bank will only loan us 80% of appraised value. So we have had it happen twice where the home did not appraise for quite what we thought and we came out of pocket a few grand to roll into a fixed loan. Example below.
Purchase price: $80,000 (bought with LOC)
Appraised prine: $97,500
80% fixed rate loan: $78,000
Had to pay $2,000 back to the LOC. But in the long run, we were only out of pocket $2,000 to purchase a long term, cash flowing asset.
We have found that when we purchase properties that need little to no work, this can happen more. When we buy a foreclosure and rehab, the is a much better chance that the home will appraise for more than the 80% needed. If we wanted some cash up front, you can take the full 80% loan upfront, pay back the LOC and cash out whatever is left over.
Posted on 1/31/17 at 10:54 am to stevengtiger
Whats your thoughts on using your own cash to buy the property if you have it vs LOC?
Posted on 1/31/17 at 11:04 am to Titan
100% my opinion and maybe wrong but I would use a LOC all day. Let your money make money in other investments.
If you have a good cash flowing property, that is in a good area, no reason to take money out of your pocket. You can put rental properties in 15 year loans and pay them off early if you can sacrifice cash flow. If you are not looking to put extra money in your pocket today, you could be set up bigly in 10 years from a handful of properties.
If you have a good cash flowing property, that is in a good area, no reason to take money out of your pocket. You can put rental properties in 15 year loans and pay them off early if you can sacrifice cash flow. If you are not looking to put extra money in your pocket today, you could be set up bigly in 10 years from a handful of properties.
Posted on 1/31/17 at 12:16 pm to stevengtiger
quote:
stevengtiger
MS coast Gulfport area?
Posted on 1/31/17 at 12:47 pm to nolaks
negative. North LA
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