Investment advice

Yeah. So, I have substantial debt from student loans but not great income. In a matter of 3 years, that all changes, and I think I can okay that down aggressively in 1 to 2 years.

My thought is to hit Roth hard, and then worry about student loans after residency (besides my $200 a month payment now to just not allow interest to capitalize).

This would allow me to have 35 years of non-taxable growth.

I recommend this site a lot, but it's specifically for those in medicine.

There's a ton of good resources in there:
White Coat Investor

You can always do a back door Roth as well...

My wife is in Residency, so I know the what you're dealing with.

Yeah. Backdoor Roth is definitely something I would look at. The problem is at that point, I will probably be at my highest tax rate, so I don't know if the benefit is there.

You are 100% correct, and I very much appreciate your advice. I already love to travel, and I know that will only increase. I love what I do as a doctor, but I also love life. I think there is much more to life than any job.

The problem is, its much easier to build wealth with a dividend portfolio than it is with real estate and the reason is dividend reinvestment. If you have a portfolio that spits off $100k in dividends and a piece of real estate that spits off $100k in rent, which one makes more in 5 years? A commercial lease will have 7.5% increases every 5 years. A dividend growth portfolio will have not only 7-10% dividend growth it will also buy you more shares every year.

I have a ton of real estate but I still think a dividend growth portfolio is better.

and which one is easier to attain? a dividend portfolio of 100k in cash a year? or RE positive cash flow of 100k?

Think about it. My dividend returns are nothing compared to RE based on cash on cash returns. Look, i like dividends also but I'll take RE anyday.

equity capture, principal paydown, way better return based on cash flow, greater tax advantages. no brainer.

show me where dividends gives you all those advantages. Show me the leverage you have buying stocks for dividends. It is not a better cash on cash return. My value of my RE may drop but guess what? rent keeps coming in as do tax advantages among others! What happens when your dividends are cut? Or a company goes under?

Quoting two or more people in a thread here on an iPad is too time consuming.

By my mid 20's, I had a real estate portfolio in seven figures. How? Debt. All one has to do is MANAGE the situation. Is it for everyone? No. But I think you and I both know what is possible if the intestinal fortitude is there. To attain that amount of stock (with the same capital outlay) would not have been possible. And I would never suggest that someone use margin to build a stock portfolio anyway. I'm heavily invested in the equity markets now. But that money, in large part, came from the fact that real estate gave me a solid base to grow from. As for the doc, he may need to wait awhile before he starts building a portfolio of (managed) properties.

As for the young doctor right now, I would hit the Roth hard now, just as he suggested. The backdoor Roth option has been on the chopping block for awhile, if I'm not mistaken. As for a house, I would only buy something major and meaningful if I knew for certain that I'd be setting down roots in that general location for at least 5-7 years. I didn't build THE house until I knew that I was done bouncing around.

Just my 2 pennies. Everyone's mileage varies...

A balance between at least some real estate and some securities are nice. Securities are certainly easier.

Any way, your South Florida cash on cash described, would you mind telling me at what price point and what rent level you achieved this. Most "investors: down there, if that's what you'd call them, are speculating on values increasing, very few have positive cash flow.

I do, but I think you know what I'm talking about. My least expensive condo in Broward I bought for $80K, and is on a canal with one fixed bridge, than intercoastal, than ocean. And the fixed bride isn't one where the boats can lower their masts to get under.

So anyway, what I'm getting at is Investopedia would say cash on cash is cash laid out for a downpayment and p&i payments. They'd be wrong, as sometimes experts are. Many times actaully.


Seasonal rental in Miami Dade where you're at is going to have 6% right off the top going to the government. It's closer to 18%, as it is in Broward County, but let's just use the 6% figure that Miami Dade states.

You're subject to state sale's tax in Miami Dade as well.

If you're talking about your property South of 5th, the cheapest, and I mean the cheapest thing there is probably ocean place. Price tag about $525K. Maintenance fees at least $600 monthly. There are some cheaper, but there are rent restrictions. The rents over there are seasonal (if you can even rent seasonal) are about $4 per sq, foot, so $1900.00 to $3800.00 for the $525K unit. Probably in hte middle.

One of two ways to borrow money on this as an "investment" or a "second" home. Both require a down payment, probabaly between 10-20% depending on your credit worthiness, and if you have above average credit, you should be able to borrow fixed for 30 years at below 3%.

The numbers don't add up with this borrowing situation.

The second way to borrow is 100% on your signature, and you should be able to do this on a 7 year balloon, with a 30 yr. amor schedule. Probably in the 2% range as an unsecured signature loan is always less expensive than a mortgage if you have a strong signature, and a relationship with a smaller bank who routinely does these kinds of loans in South Florida.

Go to a larger bank and try to get this done? Can't do it, they are too smart, and have to be careful due to all the bad loans they made, so a smaller bank has more capacity, and would be more user friendly. So a bank in Iowa as an example would lend me the $525K, no down payment, no mortgage, no collateral for 2ish percent.

So using the best way to buy, you're at $1,950 P&I at a realistic 2ish percent rate (realistic to some of us) per month gross rents, and less for an annual rental, before 6-15% t Miami Dade, $600 monthly for the association dues, non resident property taxes, insurance (which you need in addition to the association's). Property management fees. Vacancy allowance. They are vacant during the summer, unless you have a secret that I'd like to know about.

Now I'm not busting your chops Bigfella, I actually like you. You're kind of a say it all type of guy much like myself. What I'm trying to do is figure out your secret so I can make my properties perform better down there.

I in no way, shape or form cash flowed anything down there, except the first one described above, for several years. And I bought right. I own mostly Intracoastal and Ocean views/access. But I also stay away from seasonal, and stay away from overvalued areas. So I'm in Pompano, LBTS, LP, etc.

But back to topic, a nice balance of all asset classes in a good things. And off topic, please share with me some of your secrets, becuase you have me really curious.

My one mistake down there? I never sold at the top of the market. Did I learn? Yes, I took profit on the equity market run up a long time ago, and I am now selling some of my Florida property. I'll always keep some of both, but every asset class after a run up, I now take profits off the top, and let the rest ride.

It was actually mid beach, it was acquired for $1.2M and sold for $1.89M in 18 months bought in 2013 sold in early 2015. I was borrowing money at $3600/mo at a 2.75% 7/1 ARM and taxes/maintenance were $3500/month total give or take. I wasn't counting the monthly bills bc it was our place not a rental but I put down $300k total give or take and netted around $500k in 18 months. Obviously that was the biggest move up in miami, the guy I bought the place from paid $925k in 2010 and sold it to me for $275K more and then I sold it for almost $700k more. It was a direct ocean in a very luxurious building. This year the place I bought I had to put half down, so the lending got tighter, it wasn't as strict in 2013.

Miami 2010-2015 was the boom. That boom is over right now till south america settles. The place I recently bought probably wouldn't sell for what I paid a few months ago but its ok, Id love to make money but its a great place to relax and have fun and I dont mind if it stalls for a few years while brazil and venezuela recover.