26 years old, seeking basic advice

[James Wagner]

Hi everyone,

I just found this website today. I'm a 26-year husband and a father to two amazing kids (both under 2yrs). We live about 30 minutes north of Cincinnati. My wife and I both work full-time jobs (M-F, 9-5). Together, we make a bit over $100k pre-tax (not including any bonuses). However, a huge chunk of our take-home pay goes to our mortgage, our student loans (we have $100k remaining on those), and toward childcare. Our only debt outside of the mortgage and student loans is a $7k loan for a sweet minivan.

My first big goal is to make enough money on the side that my wife can stay home with our kids. At the very least, I'd need to bring home another $1,500/month (her take-home minus childcare). I've been trying to solve this problem all of 2017; I spent months researching drop-shipping products from China through a website I built with Facebook ads. I ran ads for almost 2 months making $6k in sales. However, I broke even after Facebook took $4k of that. I stopped doing this business as I was preparing for the birth of my son. I said all that to point out that I'm willing to put in the hard work and research, I am just in need of a good plan. After speaking with an investor who is doing very, very well (and is not much older than me), he suggested that I start investing in rental properties.

We only have $4k to 5k in savings (not counting $15k in 401k). We only have about $10k to $12k in equity in our home. Is investing in real estate for rentals even a reality for us right now? With 2 children now, saving anything substantial is not very doable for us at the moment. My investor connection mentioned Lending Club as an option for a personal loan. Is this all too risky? I really would like to help my wife be able to stay home with our kids.

Thanks in advance.

[Korey Rowlson]

James, 

The option of doing real estate to speed up your income is a great one that I used as well.  With two littles about the same age I know where you are coming from. 

What i would recommend may vary depending on further information. If you are comfortable with the risk and can make the expences work out with the real estate plan then have at it as it can pay off well.

In a scenario where you are a little more risk averse maybe you study from your friend and find a way to make some extra money doing this- finding deals, handyman, advertising or whatever you find to help get into the business while paying down debt and building up savings.

My avenue if risk averse and you can break down some of these other bills would be as follows:

What is monthly payment for sweet minivan and student loans?

If you have multiple student loans and some have higher interest rates clearly you want to pick these off.

Pay off your smaller loans of choice to reduce amount you need to make monthly and take that extra you are used to spending and apply it to paying off other loans. This can reduce the amount needed monthly and make a loan to get into real estate easier to qualify for and easier to swallow.

There are also other avenues i know too little about that you can research such as reits and crowd funding.

Best of luck to you and your family.