All Forum Posts by: Brit F.

@Scott Bowles, leveraging your primary residence equity is a great way to go. It's one of the cheaper ways to fund real estate investments. Your next step is to get the HELOC in place. It generally costs nothing, and you can use it for all sorts of reasons.

In parallel, you just need to decide what direction to go, based on your personal preference.  If you want a strictly passive experience, you might want to invest in debt rather than buying property directly (then paying others to fix and operate it).  On the other hand, if the thought of being a landlord/owner excites you, then go for it.  Since it seems you're overwhelmed right now, I suspect you might be happier focusing on debt investments.

For example, you can use HELOC money to do some crowdfunding and/or private lending. You might be able to find a friendly HELOC lender doing rates near prime, then explore various short-term debt investments out there, both online and local. You'll make money on the interest rate spread - all using the bank's money.

I caution against using HELOC for buy & hold or equity investments because the interest rate is too variable.

@Preston Humbard, a few q's:

• What happens if you move before the house sells?
• Do you want to provide a link to the listing?  People might see something you're missing, and you'll get honest feedback, which buyers/agents may not be giving.
• Sounds like this is in a new construction neighborhood.  How full is the neighborhood - is the builder still operating?  Are there vacant lots near you?
• Are there homes partially completed, where the builder is allowing buyers to customize the finish-out?

I like @Marian Smith's idea to create a sense urgency by incentivizing closing in May.

@David Nino, once I leave my W2, we're planning to budget $2k-3k/mo because we need the most comprehensive plan, and I expect that cost to rise over time.

The x-factor for me is what happens to the [currently illegal] exclusions for pre-existing conditions and lifetime policy maximums on the most comprehensive plans.  I'm concerned that if laws are 'fixed' or replaced, somehow those exclusions could come back into the picture, which would be exceedingly bad for my family.  That said, if that happens, going back to a W2 isn't the worst thing in the world.

At some point, I'll start calling different providers to see what kind of group discount would be available if a bunch of us Bigger Pockets ppl formed our own group.  I don't know the level of interest, but I'd guess at least a few hundred people, plus each of our extended networks locally.  As it grows, it would become a very large group methinks.

It's shocking to realize that there are tons of people who have great ideas to launch small businesses, but are held hostage by that safe employer-paid plan.  In that sense, healthcare is stifling innovation and self-realization.

@Mark Rosario, it sounds like your current job isn't very fulfilling. Maybe you just need a different job/purpose? Something that offers more flexibility?  Could you combine your love of youtube and this thread to chronicle your journey through retirement?  

The retirement picture you paint looks isolated, static, and constrained, which aren't typical ingredients for happiness.

If you are determined to retire, best of luck to you.

Have you considered these q's:

• How will you handle an unforeseen large medical expense before your new citizenship is in place?  For example, a car accident (or something else out of your control) lands you in the hospital for a few days.
• Do you expect to pay cash for everything from this point forward?  It'll be very difficult for you to qualify for any traditional financing.
• If family or friends ever need financial help, will you be able to step in?
• Can you absorb increases in HOA dues and property taxes? (What if you find solid tenants and don't want to raise the rent on them?)
• What is your contingency plan if retirement isn't what you imagined?  Will you maintain marketable skills to rejoin the workforce in a more palatable occupation?

@Victor So, you may want to consult with an Elder Law attorney, a CPA, and lender to navigate potential risks like: non-assumable mortgage (POA might be a workaround?), estate/gift tax, and Medicaid's asset look back period.

In the best case, the gift(s) stays under the threshold, the deed transfer to you is a small filing fee to the county, the lender allows you to assume the loan, and your mother won't ever need Medicaid.

@Jaysen Medhurst, the $15k amount you referenced refers to the limits on exclusions for reporting gifts.  Meaning, below that limit, nothing is reportable to the IRS.  Above that amount, it's reportable, but not taxable until it exceeds the estate/gift tax threshold, which is the $millions as you mentioned.  (I'm also not a CPA though).

@Jacklyn P., sounds like you're feeling a mix of regret and uncertainty or fear.

Will you allow those emotions hold you back?  

Do you want to repeat what happened in 2007?

What can you do today to take control?

Here are some ideas that cost nothing:

• Listen to all Bigger Pockets Podcasts (in the car, waiting in line for something, out walking, ...everywhere)
• Read through all Bigger Pockets Guides
• Surf the forums and read topics that interest you, researching what you don't understand.

Lastly, the increase in home prices you highlight is a good indicator for your market.  However, buying and fixing homes is just one of many different ways to invest in real-estate.  The above mentioned methods will introduce you to more.

@Amber K., read through the plan documents to find out what you're allowed to invest in through the self-directed 401k.  Typically, it gives you the ability to invest in traditional securities (stocks, bonds, CD's, ETF's, etc), within some guidelines - such as restricting you from buying leveraged securities.  Rules/restrictions depend on your plan.  Compared to a standard 401k, the self-directed variant is great because it offers much more control for the account owner.  

However, it would be unusual for a self-directed 401k to have the same freedom as a Solo 401k or SDIRA. 

If you have the option to roll your previous 401k into a SDIRA or Solo 401k, that would create the most investing flexibility.

Might be worth a call to your HR/Benefits ppl and/or the 401k custodian.

Thank you, @Bruce Lynn, we may end up doing that.

I edited your sentence above :) The answer is 'from your records'.  If you don't have the records to back up your deduction, best not to claim it.

@RJ Haugen, consider the ROI for your investment - both short term and long term. As soon as you graduate, when you estimate your income and expenses, how much is left over to enjoy? Can you quantify the value of the more expensive school? e.g. Will you get more job offers, a higher salary, etc. at the more expensive school?

Think of how expensive that piece of paper is at the end of 4 yrs and in 14-30 yrs depending on how long you're paying the debt.  Are there better ways you could have spent $100k + interest in 30 yrs?

I'm with @Ben Tilburyand @Greg Bishop: Do you have other options?  Have you considered attending community schools, either entirely, or partially?  Would it achieve a similar outcome for substantially less money?  Will employers care that you spent 2 yrs at institution A and 2 yrs at institution B?  Probably not.   

And because you're here, what option offers the best access to real estate? Which school allows you to buy a duplex and house-hack?

--sidebar--

Be mindful of how much value you attach to 'the college experience', which let's face it, usually translates to having fun while making bad choices, fueled by students with too much time on their hands.  I feel sorry for people who say, "college is the best time in your life."

(BTW, I look back fondly at my time in college; what bothers me is the ludicrous increase in costs without a similar increase in student value.  Case in point: my Alma mater is literally 10x the cost from when I attended...graduates are not 10x richer, happier, etc.  I want prospective students to carefully consider the value of what they are buying.  In many ways, college has become a bad infomercial or a series of guru courses that under-deliver....okay, off soapbox now)

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