What would you do if you are in our shoes?

[Yen Padilla]

Hi!I just joined bp hoping that I would get more info and help even before I start with REI.My husband and I work full time as a registered nurse in NY but we are both tired of living paycheck per paycheck.We got our SFH thru FHA Loan 9 yes ago and now we're paying our monthly mortgage $3,980/month.We got our house for $440k and now our balance is around $380k.As per Zillow the value of our property now is $420k.We would like to try on Multi-family rentals to improve our income and to have a safety net in the future.. If you're in our place what would you do to get started in RE?Shall we sell our house?Shall we keep it and refinance so we can save up faster for our dp and reserve?Or Shall we loan from private lender and start the multifamily rentals without selling our SFH? I got so hooked and passionate to start multifamily rentals but I would like to be smart and be very careful not to mess up our lives esp with our 3 gradeschool kids relying in our decision.

[Rick Pozos]

Two people with good jobs should not be living paycheck to paycheck. I have a feeling you should be reading some personal finance blogs. Most Americans spend way too much on stuff. For my wife and I our big sin is going out to eat. Every once in a while we start to get lazy and eat out almost every meal. We have to rein it in when we realize that we spent over $1500 on eating out that month. Most families can cut all kinds of spending if you really want to do it. My wife and I have realized that we can live on so much less if we just watch what we do more carefully.

The real estate stuff, yes, that is great and you do build net worth over time and you increase your cashflow. When your cashflow goes up, you have to keep your expenses at the same level or lower. Otherwise you will be in the same mess. YOu will be making 300k a year with 300k in bills every year instead of 125k income with 125k in bills. If you could decrease your expenses down to 100k per year and keep the 125k in income you will increase your cashflow by 2000 per month. I am just making up numbers, but I hope you get the point.

Keep the house. Educate yourself more in real estate and join a real estate investor club in the area to learn even more. Start reading Mr Money Mustach and/or Afford Anything. Both are great financial blogs. Try doing some of the things that they say and you will realize how much you spend on junk that you shouldnt. My next post is coming out in a couple days about this very subject also.