Should I, or should I not?

Question

Hello, I have a question.. and I am not going to beat around the bush about it... About me can be found here on a previous post. So as I stated in my previous post, I want to invest in real estate but I cannot seem to get my wife aboard on this adventure. And for a couple of good reason, I think. And I will try to keep this as professional as possible. 1) We essentially do not have a pot to piss in. 2) we live paycheck to paycheck 3) We have about 90k in debt but that's including our house mortgage and a refi. What is killing us is our damn credit cards and cell phone and cable bill as they are just nickel and diming us.... What we do have....1) My vehicle is paid for and worth about 10k 2) we own a vacant lot that is worth about 10k. I would like to turn these two liabilities into assets by using them as collateral to begin buying rental property using the BRRRR strategy. My Question is...... Giving everything I just mentioned about should I try to turn nothing into something or should I let this dream just die out? I will take any advice. I would take my wife's opinion but she works at a bank and says she see this all the time so she compares everything to what she has experienced. If it turns out she is right....so be it.... I will stop "beating a dead horse" as she says....I really just need someone to tell me what to do.

Kind regards,

Jerrud

Kind regards,

Jerrud

Thomas S. · Answer

Your situation is the result of life style choices. Every one has the capacity to save and get ahead. Most do not have a strong enough desire to actually do it.

Bottom line, painful as it may be, people live pay check to pay check by choice. They make the wrong choices in life and place priorities on those things which serve no purpose and hold them back financially.

Cell phones, cable TV, I pads....all useless and unnecessary. Home ownership, restaurants, vacations all wasteful and unnecessary luxuries.

Curtail your life style, cut up your credit cards and live on cash, build up a reserve fund and put away every dime.

Changing your life style, living frugally, is the easiest thing to do and the one thing that most prefer not to do.

Start by selling the lot and use that as your reserve funds. Pay off all debt and begin to save 20% of your gross monthly income. Get rid of all unnecessary expenses.  Everyone has the ability to achieve that simple goal, most lack the discipline and desire.

Larry Higgins · Answer

Good advice on here.  I would add that if I were you I would focus on trying to wholesale 2-3 deals.  This can be done fairly quickly for $200 or $400 if you're willing to put in the time and effort.  When you don't have a big budget you trade time for money.   This would help you accomplish two things.

1.  Get some cash and pay down your debt even more.

2.  And a little success with wholesaling may open your wife's eyes up to the possibilities in real estate if you apply yourself.

And if you can do 2-3 wholesale deals, you may just decide to wholesale your way out of debt.  Maybe wholesaling doesn't work out for you, but it costs you very little to give it a shot.

Payton L. · Answer

If I were in your shoes, I would sell the lot and pay down my credit cards first. Then I would pare down as much as I could with my "extras". Can you manage a cheaper phone plan? Maybe cutting out cable and just using local channels or a cheaper streaming service such as Netflix? You want to set yourself up for success. Taking on more debt, when you're having trouble managing the debt you have now, is not the answer. This doesn't mean you can't invest in real estate! Every nickle and dime you save now can go toward your eventual down payment and reserves needed for an investment. Come up with a plan and a budget asap. In the meantime I would be learning as much as I can about real estate, investing, and money management. Good Luck!

Michael Boyer · Answer

To keep it short.. two words: DAVE RAMSEY.

Rather than go on about every debt and saving tips, you might just  follow a popular plan for debt elimination and budgeting that is out there and has worked for many.

It is also a top ranked podcast and radio show..there is a set program (Financial Peace University) and groups around the country doing this together.

An added bonus, Dave loves real estate (but he likes it paid for and you can find some BP discussions on different views on that topic).  He also delves into relationship issues and many callers and topics are on getting couples both on board.

But first things first. Get your own personal finance situation in order and then move on to look at investing and see if the dream can be dusted off and acted on.

Debt reduction can be done is a surprising little time on the right plan with the right motivation. Start listening when you are in the car, exercising, working on the house. I would not try and make a spouse listen but see if she begins to pick up on the ideas and your own enthusiasm.

It would offer a better example than the bank of people across the US saving (and not spending) where the paid off mortgage replaces the BMW as the status symbol choice (DR catchphrase)....

Best of luck!

Jerrud King · Answer

Sorry, it has taken me so long to reply. Thank you all for advice and tips. On 10/5/17 My wife and I went to our first Dave Ramsey class, so we hope to turn things around soon. Again thank you all!!

Corby Goade · Answer

I'd agree that Dave Ramsey is a good place to start for your situation. However, he vehemently opposes borrowing money to buy investment real estate. He's great for getting rid of debt and cleaning up your credit. If you don't have great credit and either cash or equity, it's going to be tough to get started. Good luck!

Should I, or should I not?

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