All Forum Posts by: Aaron Hunt

As an investor, why would I be okay coughing up 50% down payment and tie it up in a business, with a partner who may have personal finance management concerns?

Business finance management is exponentially more difficult in my opinion.

Personal financial stability is the bare minimum before I jump on board with a prospective partner. Although, this isn’t necessarily disclosed, I’m just saying I feel the investor is taking a much greater risk. Track records matter.

7 Votes

Not so fast. Back up...

Why can’t you get a bank to give you a mortgage?

What are these various reasons?

They are likely raising red flags, which would stabilize you financially if you were to fix them. Should not be overlooked or jumping to workarounds as that will only lead to you having more reasons. Banks are an ally to investors.

As far as the $10k, the first home I purchased I put down a $11k (close enough) which was 5% down. I moved in. Moved out a year later. Made it a rental.

Three years later, this property has $100k in equity (pay-down + appreciation), a $20k HELOC (which I haven't touched). And I have since invested $10k into a banking startup, that just doubled it's assets and is doing very well, so now...I became the bank.

7 Votes

Originally posted by @David Barnett:

Originally posted by @Aaron Hunt:

Originally posted by @Mark S.:

@Blake Edwards

Absolutely.

I max out 401(k) / Roth 401(k) each year (depending on my projected income, I move between pretax and Roth). I get a 9% employer match and my highest expense ratio fund is 7 bips (0.07%), so it’s basically free. 100% equities.

I max a backdoor Roth IRA each year as well. Expense ratio of 3 basis points (0.03%). 100% equities.

I (minimally) use my brokerage account. Expense ratio of 3 bips (0.03%). Yup, you guessed it: 100% equities.

I invest heavily into a real estate note fund with non-qualified funds (10% and 12% preferred returns).

I invest in multifamily syndications with non-qualified funds (8% preferred, 75/25 or better splits on most; 6% targeted and 65/35 on one very small investment more for fun).

I invest in international agricultural real estate, like coffee (10-12% IRR) and cacao (yes, chocolate - 11% IRR). I use a self-directed ROTH IRA for cacao and non-qualified funds for coffee.

I invest in turnkey buy-and-hold SFR properties with non-qualified funds.

I save fairly aggressively in high yield savings accounts with specific purposes for each account.

I am planning to utilize the infinite banking concept / whole life insurance in the next couple of years. I am also looking to invest in additional syndications for cash flow.

Like others, I believe in the benefits of the stock market as well as real estate and I like to balance that out with a diversified approach. Cash flow from real estate for “early retirement” and qualified plans for my later years. Everyone has what works for them; this seems to be working really well for me.

What do YOU do?

How do you decide whether to invest in the pre-tax 401k or Roth 401k? I’ve been trying to figure this out

For now I’m just going all-in on the pre-tax 401k but I know I may regret this down the road.

We also have a Roth In-Plan conversion which I’m trying to understand the value of.

If you're in a high tax bracket (which I'm assuming you are), it probably makes sense to contribute pre-tax to reduce your current AGI (Adjusted Gross Income). It's likely that your AGI will go down after you retire, and will pay less in taxes since you'll pay taxes as you withdraw the pre-tax funds in 401k.

Makes sense. I think I am first-world worried that between our 401k + pension + RE investments + SS we might bump up into higher brackets even in retirement.

I know, good problem to have, but I ran the numbers after seeing our 2019 gross rents from our PMs on the 1099s and realized we’re not going to be far off at this pace of accumulation.

0 Votes