investing with student loans, hear me out first.

Starting Out
8yFollow

investing with student loans, hear me out first.

Brad Pietrzak
Member since 2018 · 10 posts · 1 vote

hey bigger pockets community. I am considering using my student loans to buy my first house hack, now here is why I am considering this and will be seeking your guidance first.

I am a veteran, my school is 100 percent covered. school calculates tuition and cost of living to be around 83k a year not even close for me but I use it to my advantage. this allows me to take a maximum of 40k out per year. between me and my fiancé we are saving about 3500 a month, and we have a good amount in stocks currently.

if I take out the maximum this year by this time next year we would have enough in cash our own plus the 40k student loans we could just buy the duplex outright meaning the 40k would be all the debt we have and use to buy it. -no bank loans-. 

a big reason I am considering this is because currently I am in the ghetto currently and man it sucks with a capitol S for a multitude of reasons. my bills all in run about 700 currently after that I am free and clear that is how we are saving so much, but the stress of living here takes its toll. and I am not willing to move until I own a duplex I would rather eat dirt then not hit our goals and make our dreams come true of truly owning our lives and time.

I would just get a mortgage but due to all my income currently being from my GI bill stipend it is not considered permanent, thus rendering me unable to get a conventional mortgage, and due to her culture until we are married. which we are putting off until I am done with school because of how rough engineering is we don't want to get a mortgage in her name. making all other options pretty difficult making this one an actual viable option to do.

I have done the math with out saving rate, and how it would increase when we bought the duplex. by doing this we could have two duplexes with large amounts down mixed with my student loans in a working class area by the time I graduate making cashflows well over the amount I need to pay the loans and then some, then use my va loan for the third and rush to pay those student loans off. 

doing this with at least this first one if I never used student loans again would make my housing situation infinitely better and help us save and invest even more then. and I wouldn't have to sleep with my gun under my pillow every night. so I am really sold on doing it once so far sense I don't have many other options and am in a unique situation.

I am really moving towards doing it just this once. and seeing how it goes before I do it again. 

what do you all think? poke as many holes in this as possible technically these 40k would be being used for my housing, I just wont be paying rent with them, but from my knowledge anyhow there are no rules against investing with them.

0Reply
51 views

9 Replies

Jump to latestLatest
  • Michele B.
    Vandalia, MI · Member since 2018 · 569 posts · 264 votes
    8y

    why are you not using a VA Loan?

    Tag me so I can understand

    0Reply
  • Sam Shueh
    Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
    8y

    Suggest using your math talent getting a degree swiftly. That is your mission.


    0Reply
  • Brad Pietrzak
    OP
    Member since 2018 · 10 posts · 1 vote
    8y

    @Michele B. I am not using the va loan because me and my fiancé are not yet married. my income from my living stipend is only 1600 and only as long as I go to school for my degree. it is considered temporary so I cannot use it to bust out a mortgage. we could get a mortgage in both our names but we do not want to do that for various reasons family wise(her side) that most people wont or are not willing to understand. 

    should I use this years student loans to assist me in buying our first duplex outright? or should I just sit and wait it out the extra year to save the 40k. give me reasons for your choice.

    0Reply
  • Brad Pietrzak
    OP
    Member since 2018 · 10 posts · 1 vote
    8y

    @Sam Shueh was that an insult? or are you actually trying to help me? I cannot tell(honestly). and I don't want to be rude and bash you if you were not inherently trying to be a keyboard warrior.

    if you were not, that's the plan. I am just wondering weather I should stay in a bad area saving more and just not use the loans and pay with straight cash or get out and get something sooner with a little debt. either way ill graduate as long as I keep my **** together studies wise ill keep my good grades and graduate on time so far my lowest test score is 88.5 percent and highest is 101 percent. I enjoy my engineering classes and the mathematics quite a lot, but it is not the end goal. the end goal is financial freedom that is why I joined the military so I could save for 4 years and get a free degree and set my life up how I want to. I don't plan on working as an engineer more then I need to unless I find the corporate engineering world enjoyable. I will work for myself to get the life I dream of and chew and spit anyone out who gets in my way or die trying. period. 

    0Reply
  • Michele B.
    Vandalia, MI · Member since 2018 · 569 posts · 264 votes
    8y

    I am so confused about this. You could use your VA to get a loan, It will be a duplex right or a triplex. The renters in the other side would be paying the mortgage or most of it. Your money you are now paying for rent as you described yourself is a bad place. SO why would you not do this?

    You could use your student loan money if you need a bigger down payment but, I just don't see it.

    Your VA loan is 3.75 % down which it seems you would have fairly quickly if you do not have it already.

    The loan would be offset by the renters on the other side of the home so your income would not be needed. 

    0Reply
  • Brad Pietrzak
    OP
    Member since 2018 · 10 posts · 1 vote
    8y

    @Michele B. I have enough right now for about 50 percent down. I cant get a va loan because my income is not considered permanent. ie I am living 100 percent on the stipend form the gi bill about 1600 tax free a month. my sweetheart is done with college but lives with family for cultural reasons most people would not understand. she saves all of her money and I save a little more then half that 1600. every month. together we save around 3500+ a month

    we would be using the student loans because I would not qualify without "permanent income" of my own. now I know that the rent checks can be included in qualification I am unsure how much it would add here don't think they would be happy with just that being used to be qualified. I am considering student loans because it allows me to just do it and not have to go through all the process of getting me preapproved and allow me to close faster with cash. it also allows me to save up all the rent for the time I am in school and invest it at higher rates of return then the loans and defer the loan payments. it also allows me to live in a better area. which I am not moving to until I can almost pay cash 40k would not be much compared to my overall savings and amount I would be paying. so I feel it would not be to risky specially seen the duplex would not be tied up as collateral for the student loans, I may not be able to bankrupt them but they can also not take away my property. I'm just seeing multitudes of benefits for this first property sense I only need to do a tiny bit of the value of the property like 25 percent or so. I just wanted to ask some investors there thoughts on the process. our plans after this would be to save and buy another then after school use my VA loan once I have a job as an engineer and use the to qualify for a duplex in a B class area we can raise kids in.

    0Reply
  • Michele B.
    Vandalia, MI · Member since 2018 · 569 posts · 264 votes
    8y
    Originally posted by @Brad Pietrzak:

    @Michele B. I have enough right now for about 50 percent down. I cant get a va loan because my income is not considered permanent. ie I am living 100 percent on the stipend form the gi bill about 1600 tax free a month. my sweetheart is done with college but lives with family for cultural reasons most people would not understand. she saves all of her money and I save a little more then half that 1600. every month. together we save around 3500+ a month

    we would be using the student loans because I would not qualify without "permanent income" of my own. now I know that the rent checks can be included in qualification I am unsure how much it would add here don't think they would be happy with just that being used to be qualified. I am considering student loans because it allows me to just do it and not have to go through all the process of getting me preapproved and allow me to close faster with cash. it also allows me to save up all the rent for the time I am in school and invest it at higher rates of return then the loans and defer the loan payments. it also allows me to live in a better area. which I am not moving to until I can almost pay cash 40k would not be much compared to my overall savings and amount I would be paying. so I feel it would not be to risky specially seen the duplex would not be tied up as collateral for the student loans, I may not be able to bankrupt them but they can also not take away my property. I'm just seeing multitudes of benefits for this first property sense I only need to do a tiny bit of the value of the property like 25 percent or so. I just wanted to ask some investors there thoughts on the process. our plans after this would be to save and buy another then after school use my VA loan once I have a job as an engineer and use the to qualify for a duplex in a B class area we can raise kids in.

     I would go ahead and do what you are thinking with the student loans.  But, I would start paying back that loan as soon as you get the place stabilized. Pay it back before you get done with school if you can. That my friend would be interest free money.  You don't have to pay interest till you graduate.  So, get it paid back while you are in school. 

    Good Luck.

    0Reply
  • Brad Pietrzak
    OP
    Member since 2018 · 10 posts · 1 vote
    8y

    awesome! appreciate the support. ive been saving so hard for o long so I can buy my first property in almost cash, ive been starving myself, ive chosen to live in a warzone ive heard peoples screams as they have clutched there children as ive come home from school from drive bye shootings  I just cant wait. only like 8 more months or so till I can own one almost free and clear and I have a super stable rock in my life. I will finally be able to move out of this **** hole and save more then when I lived in it! so excited I can almost taste it!

    0Reply
  • Brad Pietrzak
    OP
    Member since 2018 · 10 posts · 1 vote
    8y

    @Michele B. thanks so much!

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free