Soon-to-be-retired teacher(3 years) and licensed builder next step suggestions

[Nathan Johnson]

I've been a teacher (5th grade and 7th S.S.) for 22 years and can retire with full pension in 3 years. I'm a licensed builder and have done just about everything imaginable in the construction trades. New builds-broke even in the '08 market on two spec homes, built my own home from the ground up twelve years ago(400k in equity). A couple fix and flips that were financed with HELOC. But, primarily my main business is remodel work. I have great clientele with repeat customers and wonderful word of mouth which keeps me busy enough to fill my summers and time off during the school year. My wife is a wizard with interior design so we make a great team.

All of that is wonderful, but what's next. Once I'm able to retire and remodel full time, I'm eager to make great money. But, it still doesn't feel like it's enough. Ideally we'd like to fix and flip and/or STR cottages in Michigan. Just like everyone, we want to build wealth that is sustainable and I know that real estate is the way but I'm not sure how to get rolling. We've had pipe dreams for years and we are ready to really start making our dreams a reality.

Our savings are minimal, since teaching isn't very lucrative and life is expensive. Should we pursue a "cheap" rental in order to build rental history in the hopes of securing DSCR loans down the road? Should we save every penny for a larger downpayment? Even so, we might not qualify for a house/cottage in the 200k-300k range. I want to start building our portfolio and would love some experienced help with direction.

Over the past ten years, it seems like I've had numerous deals/ideas that just didn't come to fruition and I'm just feeling a bit defeated. 

[Drew Sygit]

@Nathan Johnson "Our savings are minimal, since teaching isn't very lucrative and life is expensive."

Sorry for the tough love, but not buying the above.

You & your wife's salaries should cover your expenses, while the income from your remodeling gigs should be saved.

Recommend you review EVERY dollar you made and what you spent it on in 2024. Then put yourselves on a budget!

You want to buy real estate with no savings, which even if you can scrape together a 10-20% down payment, means you will have no cushion to fall back on when the inevitable surprise expense happens. 

You could tap the $400k of equity in your primary, but that's a slippery slope with the little financial discipline you appear to have and could quickly lead to bankruptcy.