Hello and thanks for stopping by!
I would greatly appreciate some input on my current 5 year plan. It isn't much and I don't have any fine details down, but I do have a general idea of how I want to go about purchasing my first property. I think this community would be the best place to share and develop my plan - shoot! Maybe it can help some other newbies get a sense for their own short term goals too!
For context:
I'm currently going to college and working off some debt that I have, I have a total of 3 years (including this school year) left of college.
Year 1:
This is the year where I expect to pay off the last of my high-interest debt (minus the car loan). Once that debt is paid off, I'll start moving the money I'd use for payments as well as excess grants into a savings account to build and hold onto a small nest egg. I plan to maximize my savings by getting a roommate to occupy the extra room I have at my apartment in this time too.
Year 2:
I'll refer to this as the 'stagnate year' because I don't expect to accomplish a large task in this time frame. I do plan to continue saving and building my nest egg as I complete my second to last year of college. I think that maybe with the extra income I could attend some seminars and network, but I feel it's a bit too early to get that involved.
Year 3:
This will be my last year of college and where I expect to hit a financial snag because I run out of GI Bill entitlements 2 quarters before graduation - which means that I have to pay for tuition (~$3.2k/qrtr) out of pocket and will no longer be receiving housing stipends from the military to cover rent. These in combination pretty much put a halt to adding funds to my nest egg.
There are a couple scenarios for how I plan to handle my tuition: Assuming that I'll be receiving about the same kind of grants and scholarships I do now, it'd be enough to cut my tuition cost out of pocket to maybe ~$1k/qrtr which I feel is small enough to use some of the nest egg to pay it off in full without too much damage done. If I don't get the scholarships and grants at this time that I do now, then I may have to look into getting student loans to cover about half of tuition to minimize debt after college and damage to my nest egg.
Assuming I'll still have a roommate at this time, I should make enough to cover rent with my current job at the college (which is minimum wage and limited to 20hr work weeks), but it will decimate my free cash flow for sure.
Since I graduate this year, I will also be applying to potential employers to secure a stable career if I haven't found employment already. Once I do graduate and have employment, I'll have to dip into my nest egg again in order to fund my move to my job location. I don't have much to move, but I will still need to rent a small truck which can be costly (in my experience) when you add in all their xyzpayme fees.
Year 4:
This year I plan to be employed full time, but I don't plan to purchase my own property yet. Instead, I plan to rent from someone and go about with work to recover the losses I incurred on my nest egg. As I recover and build my nest egg, I will take the time to get a sense of the area I live in, do more active research into real estate trends, network, and actively prepare myself to make the jump.
Year 5:
I'm gonna jump. This is the year I hope to be fully prepared to purchase my first property. I expect to understand the area I want to buy in, the type of property that produces a decent roi, and have the network necessary to foster growth and success.
I plan to accomplish this major milestone by taking advantage of my 0% down VA home loan to purchase a four-plex and househack it. I'll also use my nest egg to add value to the property in a 'two birds, one stone' move of raising the over all value of the property and possibly increasing cash per door in the form of increased rents.
At this point, I should be making more free cash flow from my career with living expenses virtually nonexistent. I would continue to save as much as I could in order to make a down payment on another property by the end of my obligatory year of occupation at the first property. From there, it'll be rinse/repeat until I can invest full time.
Thanks for taking the time to review my 5 year plan! Does my current outline seem reasonable and attainable? Is there anything I overlooked that I should know about or add to my outline? I'd like to make it as realistic as I can and input from experience would be greatly appreciated so if you have any questions or comments, please let me know!
-Ben
