How can I make myself financially stronger?

You earn $34K in income that isn’t tied to your primary POE as a teacher. Is there any way to ratchet down your lifestyle and your living expenses to dedicate that extra income towards the rental mortgage? You’d own it free and clear in 12 months.

Even if you could just ratchet down to 50% of what was needed to pay off in 12, you could pay it off in 24 months instead. A non owner occupied mortgage rate is probably not attractive and owning that asset free and clear could allow you to leverage the increased cash flow into obtaining more rental property.

But if you did clear the title and pay the rental off, would liquidating it help you obtain more properties that were perhaps easier to afford and mortgage but help you yield more passive income?

It’s difficult to give you more detailed advice because beyond increasing your ability to generate more passive income, you don’t tell us what you want out of your two main sources of income (teaching and coaching club swim). Those two vocations seem time intensive for you. Do you want to continue both? Ramp down one while focusing on the other? Use the passive income to replace one or the other? Maybe both?

ETA: Any of the 4 DV’s wanna weigh in on why it’s a bad idea to pay off debt on a NOO property when someone indicates an interest in increasing their passive income amounts?

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You earn $34K in income that isn’t tied to your primary POE as a teacher. Is there any way to ratchet down your lifestyle and your living expenses to dedicate that extra income towards the rental mortgage? You’d own it free and clear in 12 months.

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I make $34k coaching both school and club. As far as my lifestyle, to speak of boring, it has for the past five years been going exclusively to paying down debt. Now, I have no student loans (paid off last year) and CC is down to $5k. I currently max out my Roth and put another $400 in a T-IRA monthly (So $858/month).

My take home pay from teaching is $2,700/month after taxes, insurance and retirement comes out of that. My coaching is $2500/month and is not taxed (I send the IRS a quarterly estimate of $2,100/period.

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Even if you could just ratchet down to 50% of what was needed to pay off in 12, you could pay it off in 24 months instead. A non owner occupied mortgage rate is probably not attractive and owning that asset free and clear could allow you to leverage the increased cash flow into obtaining more rental property.

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Definitely understand this thinking. But, I think this rental is just too good. I bought it foreclosed as my first home in 2012 for $37k. Currently, I pay $590/month on it through my mortgage (flood insurance kills me!) but rent it out for $778/month and could do more. I have had the same tenant in there since I left and he already wants to re-new for next year where rent will increase to $800.

The interest rate on the rental is just 3.75% while my primary is 4.25%. I also have PMI on my primary so I have been dumping about an $1,000/month in principal payments the past half year. Once I clear PMI in half a year, I will stop.

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But if you did clear the title and pay the rental off, would liquidating it help you obtain more properties that were perhaps easier to afford and mortgage but help you yield more passive income?

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Through every model I have used, my current rental is very solid.

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It’s difficult to give you more detailed advice because beyond increasing your ability to generate more passive income, you don’t tell us what you want out of your two main sources of income (teaching and coaching club swim). Those two vocations seem time intensive for you. Do you want to continue both? Ramp down one while focusing on the other? Use the passive income to replace one or the other? Maybe both?

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I want to completely leave coaching - I know the money is good, but it is time-consuming. I don't coach Summer league or part-time, I manage a 100+ member organization and am fully responsible for everything inside. It is time-consuming and frustrating having all your weekends and evenings booked every day.

Start doing online surveys and make another 100 a month, sell plasma, donate a kidney, sell sperm, deal drugs to high school students.

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Mortgage: $153k on mortgage ($121k on primary and $32k on rental)

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Sounds like you did the same thing I did when I started buying rental properties. I took a home equity loan and used it as a down payment on a rental property. Risky, but it worked out for me. People with the Dave Ramsey school of thought would freak out over that. The one thing that reduced my risk was that I formed a LLC with a friend of mine and bought it together. Over time we have sold the lower value properties and used the net to make down payments on more expensive properties. Again, risk is invoked so you have to be a smart buyer. I should add that we buy commercial property. Started from taking a $35K home equity loan about 10 years ago and buying a $120K old house that was converted to an office to having more than $1M in equity in $2.1M commercial portfolio we presently own. We also pay ourselves about $20K per year each. With rental properties, starting out make sure your home equity is a HELOC. You should form a LLC to limit liability and have a separate line of credit apart from a HELOC as soon as you can. Sometimes you need a large amount of cash if a HVAC system goes out or something similar. Or if you lose a tenant, taxes are due, and you have to replace a HVAC all in the same month.

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Maybe a counterintuitive angle here but...If you went all in on Coaching year round...I mean 100% full time...how much could you earn? Is it more than just teaching?

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No, not really an option. Our population in Oxford and facility issues are kind of finite. Plus, teaching is much less stressful. Pay is just fine and job security is crucial.

With no business history and more than likely no business credit score, I’m guessing a business loan’s rate would be higher than the blended rate on both properties. I’m also not a fan of tying the equity and liquidity of the Non Owner Occupied Property up into the Primary Residence/Owner Occupied Property.

I can’t think of any advantage it really provides beyond MI avoidance, and the potential for a higher blended rate would blunt any potential for a lower payment.

It seems like your primary goal is greater cash flow. Why not pull back on some of your retirement saving until you can afford another rental? I would also stop the extra principal payments on your home. While those are all noble practices, they seem to stand in the way of your short-term priority.... cash flow

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You could refi both houses into a buisness loam and eliminate your PMI. Assuming you could get the interest rates to make it work.

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An investor and I spoke ad nauseam about this and went to two mortgage officers and found there is just no way to tie the two together without an increase in interest rates. Just not still available.

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I currently max out my Roth and put another $400 in a T-IRA monthly (So $858/month).

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You can't do both. I just found you $400/mo.

I'll send my invoice shortly.