All Forum Posts by: Adrian Rae

Originally posted by @Sarah Huffman:

Hi everyone!

We just bought our first duplex in Erie. Would like to connect to people in the area!

Sarah

Hi Sarah! Would love to hear about how the rental is coming along in Erie. Could you share a little more info about it - what part of town? How are the tenants? Thanks!

@Caroline C. Thank you for your feedback. I've definitely been considering the side hustle route. I'm gonna have to find something to help increase the monthly income.
And good call on the C-class properties.

Thanks!

Hi @craig curelop, thank you for response, but this is why I'm stuck! So my rent right now is pretty cheap for LA, $1150 (i do have a roommate) and I have a big dog so my options are extremely limited. I own my 2007 prius, so no car payments and it's a hybrid. I live 5 miles from work, so I could have cheaper rent if I wanted to sit in LA traffic, but I like having the option to ride my bike. I've been vegetarian for 11 years, but now instead of meat I buy organic produce :\ I don't eat out, but I am guilty of nights out at the bar with friends maybe once or twice a month. I guess I should cut back on that but I'll go crazy not being social - it's tough enough being new in a huge city with a small network. I also have 25% of my paycheck automatically deposited into my money market account so I live off an even smaller portion of my paycheck. I've done all (mostly all) of the thing major cutbacks I can realistically make without slipping into a state of isolated depression. I don't want to have to go that extreme and never leave my apt just to save money. There's got to be other options to accelerate this process! But maybe not?? And it's just a long slow process? 

@jim pellerin that's an interesting idea...is the risk level the same as investing in the stock market? what are the chances you could lose all of your investment??

@ryan riches, @theresa harris, @tim herman I would love to house hack! But a 3.5% down payment in the LA area is still way more than I currently have. And with only 3.5% down, the mortgage would exceed the rental cost of the 2nd bedroom and I would end up paying more then I do right now renting with a roommate. I'd have to put down a lot more money to make it a real house hack. So even if my first plan is to house hack, I'd still want to accelerate my savings rate. LA is so darn expensive!....I should probably just move! haha

I'm new to this world but dedicated to retire early on REI. I've been putting away a big chunk of my paycheck this past year to try to build up my savings for a first down payment but it's been a slow process! I live in LA so expenses are high and I'm only working with a 75K income. I'm putting about 20-25% of each paycheck into a "high" interest money market account. Is there anywhere else I should consider investing my savings to grow faster while I save more for a bigger down payment?? I could pull off a down payment for a class c or lower type of property out of state and BRRRR it, but being my first one (and literally all of my savings), I'd rather save up a class B or better since I have to go out of state, hence the need for a larger down payment. I know there's alwyas private money, but I don't have any close connections with the funds to offer, so I'll need time to build up a network of private money lenders - so in the meantime, any strategies to accelerate the savings account, other than spend less?? Thoughts?

Thanks in advance!

Ah, I gotcha. Thanks for the extra info!

Hi Eric,
I absolutely am not offering any financial advice here. All I intend to do is share my situation with you. I have no place to be offering recommendations, but I'll share my story and maybe it'll spark some ideas for you.

So I'm 31 and just decided to STOP finish paying off the last $9,400 at 4% of my student loans. A bright light bulb went off just as I was approaching 30 and I decided I needed to take control of my financial situation. I thought that meant paying down my loads to be debt fee (i too do not have cc debt). And I may have been right. I successfully paid off more than 10K of student loans in 1.5 years, wiping out all my loans that were at 6% and 8%.

And then another, even brighter light bulb went off. I realized I was $3,000 overpaid on my 4% loans because payments were not due on those loans until 2021! I'm not sure why or how my next payment isn't due until then. But while I can't be mad at myself for being so disciplined about paying down my loans that I'm now only looking at 9K left to finish off, I am slightly irritated that it took me that long to realize I could be MAKING more of a return on the money I was handing over to the banks. So two weeks ago I shut off my auto payment of $450 to my loan and rerouted that monthly deposit to my money market account where I am building up capital for for my first REI investment. By August 2021, my goal is to have $800 in cash flow and I'll still be working full time so by then I'll be able to comfortably knock out that final 9K (the interest will definitely stack up so I'll probably make payments here and there prior to 8/2021 because I hate paying interest!).

OR I could take my savings in my money market savings account and pay it all off tomorrow. Super super tempting, and sometimes I wonder if I should just do that. That's an emotional decision though. Knowing REI can offer a much larger return when done right makes me confident that starting to build my REI portfolio NOW is the way to go.

BTW, I find Reddit to be a super helpful place to kick around these types of decisions. Sure there's a lot of garbage on there but the personal finance forums can be helpful, especially when you don't have anyone else in your life who has a strong grip on how to eliminate debt and build wealth.

I'm interested to hear how you decide to tackle your situation. Whatever you decide, remain disciplined!

@Mike McCarthy thank you for inspiring me to google earth the address listing! (duh...newbie here) Sure enough, it is right next to a commercial retail business. It's also in a commercial zoning area, so perhaps a commercial loan could be a solve here. Either way, this smells like a similar situation that you found yourself in. But, the numbers say it has strong cash flows potential! Thanks for your thoughts on this one.

@Michael Seeker

1. Exactly, this definitely crossed my mind. But I've done some research on this town and I feel confident it's a strong market for long term appreciation. So I'd be interested in buy & hold, and my *assumption* is that many more multifam units will be built in the near future. I would never act on an assumption though, so your point stands.

2. I definitely need to look into this deeper. I've done a lot of demographic/economic research, but certainly need to dive into the demand for rentals. I can't say yes with 100% confidence.

3. Interestingly enough the agent on the listing is the current owner selling it, who is also the property manager and would/could remain as such under the new owner.

Thanks for helping me talk through these points!