Want to invest but not in great financial situation

[Brent B.]

Just started getting interested in real estate investing and was curious about your guys' thoughts on next steps for me.

Here is my situation: Two of my friends are interested in partnering with me on a house hack in about 6 months. My worry about getting in now is that I have $21k in student loans, $14k in a car loan, $6k in a personal loan, and $6k in credit card debt (I was dumb with money in my earlier 20s) for a total of $47k in 'bad debt.' I'm currently 29 and make $100k annually from my job. I have minimal savings but could save some $ over the next 6 months for the down payment. Or borrow from my 401k as a last resort.

I guess my question is, do you think I have too much debt to get in the market at this point or is it better to just get in now? I have gotten better with managing my money, am no longer growing my bad debt load, and have already paid a significant amount of it off.

Thanks!

[Jason Powell]

@Brent B. This is a situation where I would throw math out the window and focus purely on behavior for now. If you're serious, you need to go on beans and rice for about 2 years, and then you'll be in a super solid position to invest, grow quickly, and never look back. Year one, you should be able to knock out about all the debt. Year two, you should be able to save enough for an emergency fund and FHA loan down payment for your OWN property. Partnership for you is a cop-out for wanting to invest while broke. You've got way too many awesome tools still at your disposal to do that.

Change your behavior patterns BEFORE you sign up for a massive loan on a property in a period of time where asset prices are very high. Fear and greed are strong emotions. You're young. If you buy your first property at age 31, that ain't so bad. Don't build your house upon the sand my friend.