All Forum Posts by: Alan Pederson

Set For Life

The Millionaire Next door

I've read both and the second one wasn't much help. Me and my wife already live well below our means and save over 50% of our income. We do almost everything they talk about in the book. I got more out of Set For Life. I would still recommend both.

I've heard both of these are good books as well. I need to read them next.

Rich Dad Poor Dad.

The Richest Man in Babylon

I lived in an apartment that replaced all of the wood siding and repainted. They didn't give me one cent off my rent. I sleep during the day and those guys spent days... pounding away at my walls. We then had to park in the back of the lot because they couldn't guarantee that they wouldn't get overspray on our cars.

I would say 401k, IRA, Roth, real estate, and a full time job. The more income streams the better. Stock market may have crushed it last year and may be doing well this year but it usually only averages 7-8% a year. I can do better than that in real estate. I love the good year I had last year with my stock market stuff and would never put all my eggs in one basket.

#1 priority would be to get a job.

#2 read and research so you can increase your knowledge base

Craig,

I manage the 3 properties that I own and I do most of the repairs. I do some handyman work on the side for friends and neighbors. If you need work done, I wouldn't mind expanding.  

I just use a simple application that they can fill out and return. I also made a flyer that shows a picture of the property and the basic info about it. I look at credit scores but if their score is low, why is it low? You have to figure if they have money and a good credit score, they would buy instead of rent. So, low credit scores are not a deal breaker for me. Their income and outstanding bills are what I look at closely. Can they pay the rent (3.5x pay)? Have they been evicted before? How long have they been employed? What did their last couple of landlords think about them? These are the things that I look closely at. The tenants we have in the first house we bought had credit scores in the low 400 range. They both worked and made more than enough to easily pay the rent and bills. They made some bad credit decisions years earlier and are working to get back on track. Everything else checked out okay so we rented to them. It's been almost 3 years now and they have never paid late and every time I go over there the house is spotless.

I feel like I have a pretty solid plan in place. We just work the plan and don't go crazy when we do have to spend money. It's easier for me to do than my wife. When I see the bank account grow, it makes me want to save more and spend less. When my wife sees the bank account grow, she keeps thinking about what we could spend it on. I keep telling her to just think about the next house we can buy instead of some lavish vacation she might be thinking about. I'm not sure it works on her but I keep trying.

Nice post Derek.

I know me and my wife are going to do the same thing this year that we have for the past 10. The stock market is doing really good but on average it only does about 7-8%. I have changed where my 401K money is invested within my plan to get a bigger return but I've changed nothing else. I've made over 5% return so far this year.

We continue to put about 10% of our pay into our 401k plans and another $6,500 in a Roth each year. We also put $2,000 and what we make from our 3 rentals in savings each month in order to save up to purchase our next rental. I'm very excited about what the future holds for us when it comes to real estate investing and I can't wait until we have enough to buy the next rental. I was just telling my wife tonight that the only regret I have is that we didn't start buying houses about 5 years sooner. We had the money but I let fear stand in my way.

If the A/C doesn't work and they didn't disclose it, what else is wrong that they didn't disclose? I just got burned a couple of months ago for a $1,700 plumbing issue that wasn't disclosed on a house we purchased in 2017. Most lender won't finance a loan for a house that is not livable. In my town they consider a house condemned if it doesn't have heat.

I do most of the work myself. I really like doing tile work. I farm out the electrical and texturing. I've learned that you just can't count on most contractors to do quality work for a reasonable price and half the time they don't even show up when they're supposed to. If you have good contractors they're worth their weight in gold. I have one handyman I can count on and I usually pay him more than he asks for the jobs he does for me.