Search found 423 matches

by Streptococcus
Tue Jul 23, 2019 10:56 am
Forum: Personal Investments
Topic: we need much less money to retire
Replies: 50
Views: 8255

Re: we need much less money to retire

I like your plan and think along your lines... (...I left employment at age 49, ...kids going to Europe for FREE college !! :sharebeer , doing RE in your 'free time' (I have done 34 props) We lived internationally and kids learned a lot!!! And their life is better for it. https://www.student.com/articles/countries-american-students-study-free-europe/ https://www.valuecolleges.com/international-universities-free-education/ A physician living on $70k / yr is about as amazing as me retiring pre age 50 as a single income / hourly wage slave who also supported parents for 30+ yrs. (I burn over $70k / yr ... whoops... house not paid off (3% is cheap money).. and we travel a lot >50% of the time) Go for it (if you have the HC thing under control....
by Streptococcus
Tue Jul 23, 2019 10:52 am
Forum: Personal Investments
Topic: we need much less money to retire
Replies: 50
Views: 8255

Re: we need much less money to retire

remomnyc wrote: Tue Jul 23, 2019 5:38 am I don't know how old your children are, but my children did not want to move to Europe. They are teenagers who are very attached to their friends and schools. They do not want to start over in a country where English is not the primary language. They do not want to go to university in Europe even though we offered to give them their college funds. If they want to work in the U.S., my husband thinks it would be advantageous for them to attend school here.
My kids are young teenagers and you're right. They may want to go to school in the US. No problem with that. Language won't be a problem in case they want to.
by Streptococcus
Tue Jul 23, 2019 2:27 am
Forum: Personal Investments
Topic: we need much less money to retire
Replies: 50
Views: 8255

Re: we need much less money to retire

Normal people do not save enough for retirement. BHs save too much. My own experience, before I came across the BH site. As I approached retirement I became more nervous. Even though I was entitled to a COLA pension @ 75% salary, as I approached retirement I had substantial investment income in addition (RE and stocks) so, basically my yardstick was total income, >>job income. As early retirement decision became imminent I started getting nervous about the security of the promised pension (many BHs consider SS as politically insecure...) hence I wanted to retire with my non-job income at least equal to my 100% job income. The consequence was I waited too long to retire, at 55, but without my pessimism/insecurity BH genes I could just as co...
by Streptococcus
Mon Jul 22, 2019 11:46 pm
Forum: Personal Investments
Topic: we need much less money to retire
Replies: 50
Views: 8255

Re: we need much less money to retire

I suspect that your wife will find working remote from Europe is a lot harder than she thinks. Doing internet data transfers to remote computers across international borders is hard. It takes bandwidth that is limited across oceans. It takes agreement on how to do data encryption and handle security protocols and other IT stuff. My daughter is a computer software engineer and data analyst. She moved to England with her hubby and tried to work remotely. It did not work due to network and security issues. She had to quit or get layed off because things were not getting done. She found significant data bandwidth and connectivity issues all over England on that job and subsequent jobs. And she had similar problems when working on another job w...
by Streptococcus
Mon Jul 22, 2019 3:09 pm
Forum: Personal Investments
Topic: we need much less money to retire
Replies: 50
Views: 8255

Re: we need much less money to retire

Yes I think you can cut back to part time work and managing your RE right now. I also think you can travel and stay in Europe for a few months each year to improve your lifestyle. I think you have enough money to execute that plan right now. BUT I do not think you can just move to Europe. You need to stay in the US to manage that RE and let your wife keep working since she likes her job. Plus I suspect that your expenses will go up to $120K or so when your kid(s) go to college and you pay those bills assuming the kids stay in the US. So you have to keep working and making at least $50K. So I think part time US work is necessary. But if you move to Europe your wife and you both have to find new jobs. Your kids will have to find new schools....
by Streptococcus
Mon Jul 22, 2019 1:56 pm
Forum: Personal Investments
Topic: we need much less money to retire
Replies: 50
Views: 8255

Re: we need much less money to retire

OP - I'd like to propose something different than most of the other responses. Ignore the "what ifs" and just do it. It's not like you are throwing caution to the wind. Look at all the positives you have going for you: you have a medical license - you can pretty much practice anywhere in the world (language barrier maybe? and passing a test in host country), you have a large portfolio and you are rational. And yes, you do need much less money to retire. It's been said numerous times on this forum, you don't need $5 million to retire, you don't even need $1 million so long as you have a flow or stream of income from other sources, you could technically retire with zero in assets and a pension or two or three as a few posters on fo...
by Streptococcus
Mon Jul 22, 2019 1:20 pm
Forum: Personal Investments
Topic: we need much less money to retire
Replies: 50
Views: 8255

Re: we need much less money to retire

If I understand this accurately, you have a monthly cashflow from real estate of $2,900/month or $34,800/yr. If that cashflow is relatively average that takes into account vacancies and repairs, you can for the sake of calculations consider it a $870k portfolio that at 4% withdrawal rate produces $2,900/month. With your $1.2 million already invested, you have reached your $2 million goal. If you and or your spouse are able to work part time just to sustain your current spending level with no additional retirement contributions, your $1.2 million will grow over the next 10 years to: 5% growth - $1.95 million 4% growth - $1.78 million 3% growth - $1.61 million If you took your real estate cashflow and added it into your investment account co...
by Streptococcus
Mon Jul 22, 2019 12:58 pm
Forum: Personal Investments
Topic: we need much less money to retire
Replies: 50
Views: 8255

Re: we need much less money to retire

Hi, OP. I agree with a lot of what you said. However, you have to have a spending buffer for catastrophes also. What if your house is destroyed by a random, non insurance disaster? What if you have a heart attack and the hospital charges you $400k? I don't think you should compromise quality of life to work more hours than you want. However, I think it would be good to build in the possibility of disaster when you make analyses like this. I really appreciate your comment. I had that thought, then I read Tim Ferriss and he talked about how the fear of the improbable prevents people from doing what is very much more likely. What is the scenario where my house would be destroyed and I would not be covered by insurance? Would that occurrence b...
by Streptococcus
Mon Jul 22, 2019 12:56 pm
Forum: Personal Investments
Topic: we need much less money to retire
Replies: 50
Views: 8255

Re: we need much less money to retire

I like reading early retirement post since I'm in the similar position and thinking about my options. Living in Europe would be great. Perhaps part of the year. I would use Spain, Portugal or Malta as my base and then travel by train or cheap short flights everywhere. I was reading about the cost of living in Portugal. It's very low. My understanding is you can live near the beach for less than 4000 per month. You mentioned you don't have to worry about health insurance while living abroad. Unless you have residency status in the EU you will have to purchase private insurance. What you are proposing is basically working part time and traveling part time. You are doing the work upfront. You said you are a physician. What happens if you work...
by Streptococcus
Mon Jul 22, 2019 12:24 pm
Forum: Personal Investments
Topic: we need much less money to retire
Replies: 50
Views: 8255

Re: we need much less money to retire

I like reading early retirement post since I'm in the similar position and thinking about my options. Living in Europe would be great. Perhaps part of the year. I would use Spain, Portugal or Malta as my base and then travel by train or cheap short flights everywhere. I was reading about the cost of living in Portugal. It's very low. My understanding is you can live near the beach for less than 4000 per month. You mentioned you don't have to worry about health insurance while living abroad. Unless you have residency status in the EU you will have to purchase private insurance. What you are proposing is basically working part time and traveling part time. You are doing the work upfront. You said you are a physician. What happens if you work...
by Streptococcus
Mon Jul 22, 2019 11:57 am
Forum: Personal Investments
Topic: we need much less money to retire
Replies: 50
Views: 8255

Re: we need much less money to retire

Hi, OP. I agree with a lot of what you said. However, you have to have a spending buffer for catastrophes also. What if your house is destroyed by a random, non insurance disaster? What if you have a heart attack and the hospital charges you $400k? I don't think you should compromise quality of life to work more hours than you want. However, I think it would be good to build in the possibility of disaster when you make analyses like this. I really appreciate your comment. I had that thought, then I read Tim Ferriss and he talked about how the fear of the improbable prevents people from doing what is very much more likely. What is the scenario where my house would be destroyed and I would not be covered by insurance? Would that occurrence b...
by Streptococcus
Mon Jul 22, 2019 11:42 am
Forum: Personal Investments
Topic: we need much less money to retire
Replies: 50
Views: 8255

Re: we need much less money to retire

I do not see your age or mention of kids in this post. Please advise both. Also where you and your wife with social security and medicare qualification? Do you have enough work quarters to draw both? Good Luck. 45 and 39. We have kids. Their college will be well funded with our real estate equities if they attend US universtities. Or they may attend universities in Europe, just like we did, for free. I worked in Europe for years and contributed to retirement until we moved to the US. I will qualify for government based retirement based on that contribution when I'm 65 although I don't count it. I'm not yet familiar with SS and medicare contribution when you work 3-4 months a year. I did not consider them in my future earnings. Not to detai...
by Streptococcus
Mon Jul 22, 2019 11:17 am
Forum: Personal Investments
Topic: we need much less money to retire
Replies: 50
Views: 8255

Re: we need much less money to retire

btenny wrote: Mon Jul 22, 2019 11:08 am I do not see your age or mention of kids in this post. Please advise both. Also where you and your wife with social security and medicare qualification? Do you have enough work quarters to draw both?


Good Luck.
45 and 39. We have kids. Their college will be well funded with our real estate equities if they attend US universtities. Or they may attend universities in Europe, just like we did, for free. I worked in Europe for years and contributed to retirement until we moved to the US. I will qualify for government based retirement based on that contribution when I'm 65 although I don't count it. I'm not yet familiar with SS and medicare contribution when you work 3-4 months a year. I did not consider them in my future earnings.
by Streptococcus
Mon Jul 22, 2019 11:10 am
Forum: Personal Investments
Topic: we need much less money to retire
Replies: 50
Views: 8255

Re: we need much less money to retire

bloom2708 wrote: Mon Jul 22, 2019 11:01 am Where do you work for 3-4 months and pull in $80k-$90k?

Does the same company hire you back each year? Is this a "run your own business"? If so, what do your customers do for the 8-9 months each year you are not working?

Why do you think you can work into your 70s? Future health is unknown.
I'm a physician. I can work at my current job, or be a locum tenens. I plan on working into my 50s, 60s or 70s if I have the need, will or ability to do so, to quote Larry Swedroe. If not, I will just retire.
by Streptococcus
Mon Jul 22, 2019 10:44 am
Forum: Personal Investments
Topic: we need much less money to retire
Replies: 50
Views: 8255

we need much less money to retire

Hello Bogleheads, I'm writing this post to check my thinking process with the boglehead crew and get critiqued and criticized. I used to have a retirement number. It was a relatively small number compared to lots of bogleheads. Here's how my IPS looked like: 2M in portfolio (taxable/retirement) paid off home and no debt Spouse loves career and plans on working for another 2 decades, makes mid 5 figures Our annual expenses were set at around 70K (no mortgage) But then as I learned more about myself and our family needs, things changed: 1. Over time, I realized that the "number to retire" goal that a lot of people subscribes to maybe does not apply to me. I am set to hit that number before age 50. But the idea of just retiring, aban...
by Streptococcus
Wed Apr 17, 2019 7:22 am
Forum: Personal Investments
Topic: $1.1 million rental portfolio, but tired of being a landlord
Replies: 87
Views: 13364

Re: $1.1 million rental portfolio, but tired of being a landlord

Correct! So in the case of the OP, I think he said $130k total rents, corresponding to $40k free cash flow. So 10% of the $130k, not 10% of the $40k. That's what I was asking about, since it sounded like you were saying you would have it managed for 10% of the 40k. You are correct. It is 10% of 130K. I will also add that if his NOI is 130K and his cash flow is 40K, which is ~31%, without even paying a PM he is probably spending too much in expenses. In RE, it is said that in the very long run you will spend about 50% of your income in expenses, not including mortgage. That is if you are a successful RE investor. Did I understand that the OP has all of his properties paid off, so no mortgage, no PM yet he spends ~ 70% in expenses. He either...
by Streptococcus
Tue Apr 16, 2019 10:12 pm
Forum: Personal Investments
Topic: $1.1 million rental portfolio, but tired of being a landlord
Replies: 87
Views: 13364

Re: $1.1 million rental portfolio, but tired of being a landlord

My 2 cents: Do not sell your properties. Hire a property manager and give up 10-12% of your 40 - 50K per year. Is it really possible to get a decent property manager that will manage 10 properties for you for only $4k - $5k per year? My PM company charges 10% and thats it. They market the houses, show them, deal with the tenants, manage the repairs, and if needed, they sell the rental. Great PM companies are also real estate agents and real estate investors. That means they understand the rental market. My PM charges only 10%. Nothing else. They dont even charge me a fee for putting a tenant in the house. If I need repair, they outsource it at a discount. I can use my own plumber, contractor, etc. (I have them) but the one they outsource a...
by Streptococcus
Tue Apr 16, 2019 8:55 pm
Forum: Personal Investments
Topic: $1.1 million rental portfolio, but tired of being a landlord
Replies: 87
Views: 13364

Re: $1.1 million rental portfolio, but tired of being a landlord

My 2 cents: Do not sell your properties. Hire a property manager and give up 10-12% of your 40 - 50K per year. Is it really possible to get a decent property manager that will manage 10 properties for you for only $4k - $5k per year? My PM company charges 10% and thats it. They market the houses, show them, deal with the tenants, manage the repairs, and if needed, they sell the rental. Great PM companies are also real estate agents and real estate investors. That means they understand the rental market. My PM charges only 10%. Nothing else. They dont even charge me a fee for putting a tenant in the house. If I need repair, they outsource it at a discount. I can use my own plumber, contractor, etc. (I have them) but the one they outsource a...
by Streptococcus
Tue Apr 16, 2019 7:50 pm
Forum: Personal Investments
Topic: $1.1 million rental portfolio, but tired of being a landlord
Replies: 87
Views: 13364

Re: $1.1 million rental portfolio, but tired of being a landlord

Scenario: - Individual investor owns 10 single-family rental properties. The total market value of all the properties is about $1.1 million. - The properties are all paid off, free and clear, with no mortgages. They were all purchased about 10 years ago for a cost basis of about $500k. - This investor is tired of being a landlord, tired of dealing with tenants, toilets, rent collecting, filling vacancies, and all the tenant drama. - This investor spends about 5-10 hours per week on average dealing with repairs, rents, filling vacancies as needed, taxes, paperwork, etc. - The real estate market in this city is expected to grow at about 2%-3% per year. Numbers: - Annual gross revenue is $130,000. - Net profit is about $40k-$50k per year (it ...
by Streptococcus
Sun Mar 17, 2019 12:07 am
Forum: Personal Investments
Topic: Can i rely on rental property?
Replies: 64
Views: 7333

Re: Can i rely on rental property?

So i wonder how rental property fares in term of income reliability in case my etf stock holding jitters So far the issue is: 1) I find it difficult to raise rent even to match inflation rate 2) The return hasn’t consider the depreciation of the building 3) I’m not sure how long the building will last before need to rebuild But selling all rentals and went all paper (stock and bond) also doesn’t feel right Any thoughts? I consider myself a boglehead and a heavy real estate investor. By the time I retire in a few years, I'll probably own between 30-50 single family rentals. And my plan as of now is to NEVER sell them. There is a huge tax benefit to your descendants when you die while owing rentals. My 2 cents: 1. Don't listen to those who t...
by Streptococcus
Sat Mar 16, 2019 4:17 pm
Forum: Personal Investments
Topic: Can i rely on rental property?
Replies: 64
Views: 7333

Re: Can i rely on rental property?

So i wonder how rental property fares in term of income reliability in case my etf stock holding jitters So far the issue is: 1) I find it difficult to raise rent even to match inflation rate 2) The return hasn’t consider the depreciation of the building 3) I’m not sure how long the building will last before need to rebuild But selling all rentals and went all paper (stock and bond) also doesn’t feel right Any thoughts? I consider myself a boglehead and a heavy real estate investor. By the time I retire in a few years, I'll probably own between 30-50 single family rentals. And my plan as of now is to NEVER sell them. There is a huge tax benefit to your descendants when you die while owing rentals. My 2 cents: 1. Don't listen to those who t...
by Streptococcus
Fri Mar 15, 2019 12:24 pm
Forum: Personal Investments
Topic: Can i rely on rental property?
Replies: 64
Views: 7333

Re: Can i rely on rental property?

So i wonder how rental property fares in term of income reliability in case my etf stock holding jitters So far the issue is: 1) I find it difficult to raise rent even to match inflation rate 2) The return hasn’t consider the depreciation of the building 3) I’m not sure how long the building will last before need to rebuild But selling all rentals and went all paper (stock and bond) also doesn’t feel right Any thoughts? I consider myself a boglehead and a heavy real estate investor. By the time I retire in a few years, I'll probably own between 30-50 single family rentals. And my plan as of now is to NEVER sell them. There is a huge tax benefit to your descendants when you die while owing rentals. My 2 cents: 1. Don't listen to those who t...
by Streptococcus
Wed Dec 26, 2018 3:53 pm
Forum: Personal Investments
Topic: This is why you should not time the market
Replies: 38
Views: 6543

This is why you should not time the market

The market is up 5% today. Weren’t headed to the abyss? Didn’t we have the biggest christmas eve sell off in history? A lot of people were talking about going cash, predicting more nose dives.

And then today happened. Washington post calls it the biggest Dow point gain in history.

Had you sold after the big sell off last week or on christmas eve, you would have been out of the ride. Can you imagine being on the sideline of such a single day ride :shock: :oops: :shock:
I did not :beer :D
Dont try to time the market. No one knows what the market knows.
by Streptococcus
Tue Oct 09, 2018 2:47 pm
Forum: Personal Investments
Topic: Rebalance into international in retirement account
Replies: 6
Views: 583

Re: Rebalance into international in retirement account

It is expensive in my retirement account. I would rather have it at vanguard but I think I will just rebalance in my 403b.
Thank you very much for your posts.
by Streptococcus
Tue Oct 09, 2018 12:41 pm
Forum: Personal Investments
Topic: Rebalance into international in retirement account
Replies: 6
Views: 583

Rebalance into international in retirement account

Hello bogleheads, I've never rebalanced into international (VTIAX) in my 403b as I used to purchase more VTIAX in my taxable or rebalance through my roth. But as my portfolio grows I realized that I can no longer just purchase new VTIAX to rebalance as I would need to spend tens of thousands of dollars. I wonder if I should rebalance VTIAX in my 403b even if it is not the best location for that fund. My question: If you needed to rebalance and purchase more international stocks, would you do that in your 401k/403b if you had no other choice? I personally welcome the terrible performance of VTIAX this year because the US stocks are pretty expensive and I'm always looking for a bargain. I need to purchase tens of thousands of cheap VTIAX and ...
by Streptococcus
Wed Jul 18, 2018 6:36 pm
Forum: US Chapters
Topic: Post your Financial Milestone Announcements Here
Replies: 3621
Views: 568939

Seven figure milestone

[Thread merged into here, see below. --admin LadyGeek]

Not a big deal for many of you guys but I wanted to share reaching the seven figure networth. I thought I would celebrate after reaching it but turns out I did not. I reached this milestone a few months ago without realizing it. Even though I invest every 2 weeks, I dont really check the balance of my accounts often and I only rebalance every 3-4 months.

Anyway, thanks a lot for your posts
Next milestone seven figure portfolio, probably in 6-12 months, if the market agrees :)
by Streptococcus
Thu Jul 12, 2018 5:32 pm
Forum: US Chapters
Topic: Post your Financial Milestone Announcements Here
Replies: 3621
Views: 568939

Reached 7 figure

[merged Streptococcus' thread and its replies here - moderator prudent] Hello Bogleheads, About 18 months ago I celebrated our 500K milestone networth. I had always thought that I would celebrate when I reach 1 million networth. Well I didn’t. I just realized today that our networth surpassed that number months ago and I didnt even realize it. I dont pay much attention, rebalance when i remember, every 2-3 months, but i do invest every 2 weeks, dividing the money according to AA. Its surprising how after a certain point, your networth goes faster than your expectation, especially after a year like 2017 when our portfolio had a cap gain in the 6 figures. Plus, when you pay off your house in 15 years like us, the debt goes down fast, and you...
by Streptococcus
Thu Jan 04, 2018 1:10 pm
Forum: Personal Investments
Topic: Investment account for child
Replies: 4
Views: 1084

Re: Investment account for child

Thanks Y'all! I appreciate your comments :happy
by Streptococcus
Thu Jan 04, 2018 10:45 am
Forum: Personal Investments
Topic: Investment account for child
Replies: 4
Views: 1084

Investment account for child

After a lot of thoughts I decided to open an investment account for my young teenager who's 11. I know a lot of bogleheads here would not let a child have access to money but part of what I'd like to teach the kid is to control the emotions and compulsions (spending) that come with access to money. Teach patience. Teach the skills of money management and that requires hands on. And so far, he's done really well. He gets paid when he does chores (yard work, etc.) and I only taught him one rule: spend half of what you make and save the rest. He's taken that rule to heart and ran with it. Now he has quite a bit of money that he made and i want to amend the rule above with "Spend half of what you make and invest the rest" My idea is t...
by Streptococcus
Sat Sep 16, 2017 7:21 pm
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 year refinance vs cash out refinance
Replies: 32
Views: 3413

Re: 15 vs 30 year refinance vs cash out refinance

This is an interesting choice. I am a banker and also have 7 rental units (I used to have 10 but sold 3 in the last year). I work with lots of RE investors and totally understand where you're coming from, so I'm not going to weigh in on whether I think you should buy rentals or cash out your home equity to do so. There are plenty of threads on that if you're interested. To your question - here are the pros and cons of each choice as I see it. I currently have a 15 year loan at 3.5%, payment ~ 2230$ per month...And I have about 200K equity imprisoned in my house. First - this is a good place to be in of course. Good mortgage rate (great after tax rate assuming you itemize), conservative amortization schedule, good equity. I am in a similar ...
by Streptococcus
Sat Sep 16, 2017 4:08 pm
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 year refinance vs cash out refinance
Replies: 32
Views: 3413

Re: 15 vs 30 year refinance vs cash out refinance

It sounds risky to be taking your primary home equity to buy rentals. If it were a rental you were taking equity that would be different. I'm actually considering add a rental or two with the equity from my one rental. Maybe start with one rental for a couple of years and see how that goes? So i am a LL. it wasn't very long after the crisis that I started so equity in my house was zero. I actually took a personal loan to buy the first. To buy the second i took out loans on my vehicles, which worked great and at 2.3% definitely lowest capital. I also bought it with owner financing from the previous LL and only 10% down. We were both happy with the loan and I refied 2 years latter and cashed out, on the rental. I used that money to buy my ne...
by Streptococcus
Sat Sep 16, 2017 1:46 pm
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 year refinance vs cash out refinance
Replies: 32
Views: 3413

Re: 15 vs 30 year refinance vs cash out refinance

tell me more about your decision to buy 5-6 rental properties in the next year. I have not invested in REIT. I have a 3 fund portfolio and I add rentals as a diversifier. You can however say that I invested in REIT if I own the 3 fund portfolio. I could buy max 6 but if I can only find 3 or 4 deals that fit my criteria that'll be fine. I will close on the first deal in the next month (hopefully). how many rentals do you own now? 3. I'll stop when I cash flow 4K per month. It'll be 10-15 rentals. Although, I don't view the stock market as that liquid. If the market tanks by 50% tomorrow, it will not be a good idea to sell and get out and you will be stuck and unable to use it as liquid. On the other hand, if the market tanks tomorrow, peopl...
by Streptococcus
Sat Sep 16, 2017 1:24 pm
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 year refinance vs cash out refinance
Replies: 32
Views: 3413

Re: 15 vs 30 year refinance vs cash out refinance

Posts like this make me very bearish on buying a home when I don't otherwise need to buy. I do not want to be buying in a market where someone thinks it's a good idea to take out all the equity and lever up 5-6 more properties, counting on the cash flow from renters to make it work. Very vintage 2005/2006/2007. Here's a perspective on the housing market cycle in S. Cal from 2 cycles ago (1985-1997). http://www.rntl.net/history_of_a_housing_bubble.htm I agree with you 100%. You should stay bearish on REI. I don't think you understand much of it. In your scenario, it sounds like you plan for this to happen: $300k debt on your $300k house $30k debt on your first rental $70k debt on your second rental ($100k purchase price) First off, the abov...
by Streptococcus
Sat Sep 16, 2017 11:13 am
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 year refinance vs cash out refinance
Replies: 32
Views: 3413

Re: 15 vs 30 year refinance vs cash out refinance

In your scenario, it sounds like you plan for this to happen: $300k debt on your $300k house $30k debt on your first rental $70k debt on your second rental ($100k purchase price) That may not be "overleveraged," but it at least looks "highly" leveraged. Guess it could work, and you seem to have enough money to make all of those loan payments during the periods after your tenants disappear, you make the repairs, and then find new tenants :). Not saying it's a bad idea, it's just too risky for me. Sounds sorta like marriage - Easy to get into, but very hard to get out of. I just prefer the liquidity of the stock market and the ability to change my risk exposure with the click of a mouse. I agree with your point. Although,...
by Streptococcus
Sat Sep 16, 2017 8:58 am
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 year refinance vs cash out refinance
Replies: 32
Views: 3413

Re: 15 vs 30 year refinance vs cash out refinance

letsgobobby wrote: Sat Sep 16, 2017 8:51 am tell me more about your decision to buy 5-6 rental properties in the next year.
I have not invested in REIT. I have a 3 fund portfolio and I add rentals as a diversifier. You can however say that I invested in REIT if I own the 3 fund portfolio. I could buy max 6 but if I can only find 3 or 4 deals that fit my criteria that'll be fine. I will close on the first deal in the next month (hopefully).
by Streptococcus
Sat Sep 16, 2017 8:32 am
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 year refinance vs cash out refinance
Replies: 32
Views: 3413

Re: 15 vs 30 year refinance vs cash out refinance

If you are sure you will be selling the house within 5 years, closing costs are an important consideration. A HELOC is likely preferred on that account, but it depends on interest rates and how long you stay in the house. Many HELOC's are variable rate, so he sure you will indeed sell within 5 years or less. The plan can be a risky maneuver. Many people lost their home and rentals from doing this pre-2008. Here is the definition of dilemma: "a situation in which a difficult choice has to be made between two or more alternatives, especially equally undesirable ones" It sounds like your situation is totally optional :happy . And IMHO, all of your alternatives are very very risky! The only way I'd use our equity, and our house has b...
by Streptococcus
Fri Sep 15, 2017 10:29 pm
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 year refinance vs cash out refinance
Replies: 32
Views: 3413

Re: 15 vs 30 year refinance vs cash out refinance

Thanks, so you would not choose any of the 3 options? No, I wouldn't, but I don't really know what you should do since you think of it very differently, as having $200,000 in equity "imprisoned" in your house. Seems like you should be renting instead of owning, or at least carrying the largest mortgage you can get, to rectify that. But ten years ago, a lot of people who did what you are proposing to do ended up bankrupt and homeless when the financial crisis hit. Some people are still suffering for it. I also think buying five or six rental properties over the next year is too aggressive unless being a landlord is going to be your full-time occupation. Seems like buying one and getting it stabilized with a good tenant and then lo...
by Streptococcus
Fri Sep 15, 2017 10:19 pm
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 year refinance vs cash out refinance
Replies: 32
Views: 3413

Re: 15 vs 30 year refinance vs cash out refinance

If you will be in your house for less than five years, you should have either a 15-year mortgage or a 5-year ARM on the home. You don't get the benefit of the longer term in a 30-year mortgage, since you can't lock in the right to borrow at that low rate for 30 years. For similar reasons, the cash-out refinance isn't a good deal. You are borrowing money on a five-year loan but at long-term rates. If you have a better use for the cash and can do a cash-out refinance into a 5-year ARM, that may be a good deal. You should not focus on how much interest you are paying to the bank, but on how your debt costs you (in interest) versus how much it benefits you (in the return). I could pay off my mortgage, but I get a benefit from keeping the mortg...
by Streptococcus
Fri Sep 15, 2017 8:40 pm
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 year refinance vs cash out refinance
Replies: 32
Views: 3413

Re: 15 vs 30 year refinance vs cash out refinance

Pajamas wrote: Fri Sep 15, 2017 5:34 pm I think of the equity in my home as providing me a place to live and the lost opportunity cost as a substitute for rent. I wouldn't pull cash out of my home to invest in a real estate business (effectively to provide housing for other people) and would keep my personal and business finances distinctly separate. My home is not what I would choose to take calculated risks with because I need a place to live.
Thanks, so you would not choose any of the 3 options?
by Streptococcus
Fri Sep 15, 2017 5:27 pm
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 year refinance vs cash out refinance
Replies: 32
Views: 3413

15 vs 30 year refinance vs cash out refinance

hello Bogleheads, I have an odd dilemma. I just need to know what you would do in my shoes. I plan on buying 5-6 rental properties over the next 12 months and I wanted to use the equity on my house. I currently have a 15 year loan at 3.5%, payment ~ 2230$ per month. My bank is offering me 3 financing options for my real estate investing: cash out refinance, plus a heloc, plus a line of credit. Now assume that you're not your prototypical bogleheads :happy but a businessman, someone who takes a calculated risks on his home equity. To me, a home equity is imprisoned money. It is useless if it does not work for you. And I have about 200K equity imprisoned in my house. Which of the following 3 options would you choose: 1. You cash out refinance...
by Streptococcus
Wed May 31, 2017 10:58 am
Forum: Personal Finance (Not Investing)
Topic: Should I pay off my line of credit debt?
Replies: 6
Views: 851

Re: Should I pay off my line of credit debt?

Thank you very much for your advices. I really appreciate it.
by Streptococcus
Wed May 31, 2017 10:58 am
Forum: Personal Finance (Not Investing)
Topic: Should I pay off my line of credit debt?
Replies: 6
Views: 851

Re: Should I pay off my line of credit debt?

Thank you very much for your advices. I really appreciate it.
by Streptococcus
Wed May 31, 2017 9:15 am
Forum: Personal Finance (Not Investing)
Topic: Should I pay off my line of credit debt?
Replies: 6
Views: 851

Should I pay off my line of credit debt?

Hello Bogleheads,
I have a line of credit debt that amounts to 30K, 5% interest. I did some home renovations and used the line of credit to pay for it.
I have 2 possible ways to pay for it and I'd like to have your opinion on the best way:

1. I pay it off now. I have cash in my portfolio to pay the balance now if I wanted to. The advantage of this is to have no debt and I would basically have an immediate return of 5% on the money
2. I pay it off over the next 4-6 months. The advantage of this option is only psychological. I dont like to touch my portfolio. I like the money to go in without going out. I save 10-15K a month, so I can pay it off over a few months if I wanted to.

Thanks for your advices
by Streptococcus
Mon Jan 09, 2017 9:52 am
Forum: Personal Investments
Topic: 500K milestone celebration
Replies: 74
Views: 11593

Re: 500K milestone celebration

Thanks you everyone for your posts. :beer
by Streptococcus
Fri Jan 06, 2017 5:32 pm
Forum: Personal Investments
Topic: 500K milestone celebration
Replies: 74
Views: 11593

Re: 500K milestone celebration

I think he meant that when he officially became a Boglehead, he had about 50k. He now has 500k after the last few years of investing. I'll be a Debbie Downer! :twisted: I'm guessing the bulk of the gains came from saving not investing. What if the OP makes 450K per year? Then going from 50K to 500K in 3 years is not that impressive. I would be impressed by your career choice though and say nice work but it wouldn't have anything to do with this forum. What is there was a 100K inheritance during this time? Sometimes people forget to mention these details. I see posters do humble brags like, "how am I doing as a 27 yo with 200K networth 4 years out of college?" They often neglect to initially mention that their parents paid for all...
by Streptococcus
Thu Jan 05, 2017 3:18 pm
Forum: Personal Investments
Topic: 500K milestone celebration
Replies: 74
Views: 11593

Re: 500K milestone celebration

NoD wrote:As someone who just crossed 200k portfolio, I really enjoy these 'check in' posts personally. They definitely keep me motivated to hit goals this high someday!

Congrats on half millionaire status! :sharebeer
That is the very purpose of this post. I get motivated by similar posts.
by Streptococcus
Thu Jan 05, 2017 3:17 pm
Forum: Personal Investments
Topic: 500K milestone celebration
Replies: 74
Views: 11593

Re: 500K milestone celebration

MrNewEngland wrote:
Streptococcus wrote:I know it's not a big deal to many of you guys but we became bogleheads in April 2013 and our first goal was to exceed the 500K milestone before the end of 2016: Check! A little more than 3.5 years.
Thank you so much for all your inspiration, advices and guidance. Next milestone, seven figure before 2020.
Congrats, that's awesome! I'm still quick a distance from hitting that, but it's getting closer.

If you don't mind me asking: how old are you?
Low 40s
by Streptococcus
Thu Jan 05, 2017 11:51 am
Forum: Personal Investments
Topic: 500K milestone celebration
Replies: 74
Views: 11593

Re: 500K milestone celebration

JimmyD wrote:Congrats! Also just curious: net worth or portfolio value?
Portfolio. But networth is about the same as the equity on our house equals the debt and we have no other debt.
by Streptococcus
Thu Jan 05, 2017 11:50 am
Forum: Personal Investments
Topic: 500K milestone celebration
Replies: 74
Views: 11593

Re: 500K milestone celebration

weedf16 wrote:Job well done! Just curious, what was your starting number in 2013?

:sharebeer
Around 50K, our efund.
by Streptococcus
Thu Jan 05, 2017 8:19 am
Forum: Personal Investments
Topic: 500K milestone celebration
Replies: 74
Views: 11593

500K milestone celebration

I know it's not a big deal to many of you guys but we became bogleheads in April 2013 and our first goal was to exceed the 500K milestone before the end of 2016: Check! A little more than 3.5 years.
Thank you so much for all your inspiration, advices and guidance. Next milestone, seven figure before 2020.