Do I want to be right, or happy?

[Darryl Ferguson]

Married 30 years and better half are the brakes of this vehicle and I am the accelerator! She wants to go slow and steady, and while I appreciate the need to be careful, I am chomping at the bit to get going on investing! Bought a rental on emotion in 2014 for our Son and of course none of those plans panned out. Got hit with Hurricane Harvey and had 36" of water in the rental, so 60k (40k ins 20k out of pocket) later and a tenant for the past 5 years we are about 70k invested in the rental which is now cash flowing at $585.00 monthly with a new refi of 73k balance on appraised 169k and all major ticket items such as Roof, AC done. I should have cashed out the refi on this, but didn't....primary is worth 160k-180k and paid for. Momma wants to wait and save about 50k to get another rental to move into for 2 months while we fix interior of primary and move back in then rent out the new rental.....I say we heloc or cash out refi the primary and get moving on it sooner than later at the lower rates etc.....I don't know....she has the emergency brake on as well as mashing down on the brake pedal and one foot out the door on the pavement as well....my gotta get out and go clock is about to explode knowing we have leverage and me wanting to make a move, or at least be able to make a move if something too good to pass up comes along......Guess I really need to ask a marriage counselor more than the experts here. I feel I can be happy AND right once I prove it, but really don't want to go through the unhappy stage while we get the setup for the returns going..., but would appreciate all thoughts or ideas to help an investor in the wings on stage left? 

[Todd Rasmussen]

@Darryl Ferguson

I'm just impressed you think you can still be right! I gave that up a decade ago and I've only been married for 10 1/2 years.

Have you been to a financial advisor and looked at the retirement picture? Work both of your scenarios out on paper and see which one gets you to where you want to be. If your wife is conservative here, it's likely she'd be conservative in figuring your margin against inflation later in life. While it's not visible yet, it's the much bigger threat to your fiscal health.

Not taking a mortgage on a personal residence later in life during a tumultuous time sounds pretty logical and frankly the "right" decision is subjective in most cases and based on personal preferences. It's a bear to not be on the same page, but also lots of methods for getting into homes for less than a standard down payment. Take this lull to increase your skills as an investor and find deals where you don't have to show up with a down payment.

Your $585 cash flow would more than cover the entire interest only payment on a HELOC. A compromise could be that you get a HELOC to do a BRRRR or near BRRRR and pay it off with the refi from your investment. You could pay back the HELOC in full after your next property and then regroup and decide if that was how you wanted to move forward before you pulled the money back out to do it again.

Your return on the first one is okay, but 10% is not enough to justify leveraging yourself significantly to repeat. I think if you could get a cash on cash 20%+ on the next one that would go a long way to selling that your strategy is the most fiscally responsible.

Good luck!