I skipped the introduction post, sorry, I will make one I swear!
As the subject says, I'm at a fork in the road in my life and need some opinions and different perspective before I make a course change. Each path leads to the same end goal and that is to be financially free and I feel I can truly accomplish this either way but I really need outside perspective before I make that decision. To be honest, this decision could be lopsided due to "Happy Wife, Happy Life" but we will see.
Just a quick background, I work a 9-5 job with flexible hours and work from home policy (usually in the office most days though) and maintain a stable income. I have some minor debt to resolve this year, 10k in HELOC, 10K in CC. I live in the Pittsburgh area and currently own our home and have 20 years left on the mortgage, interest rate is 3.75%, payment 1250 which will be lower due just removing PMI ( 650ish in principal, 350ish in property taxes).
I'm mostly interested in the BRRRR strategy and I should note my wife is a real estate agent for the last 2 years. The end goal is to be financially free and move in to a community that my wife enjoys working in and travels to a lot, the question is in what order. I am the sole provider for the house but each year, my wife's real estate is stronger and stronger and would be factored in a year or 2 down the road.
Path 1 - Start now, move later.
The idea here is to pay off the CC in the next 6 months (the cards aren't being used and I put 2k/mo on them, they are 0% apr for 10 months) and I'm saving around 500/mo for a down payment on a lower end distressed property. The idea here is to find our first BRRRR now and get started on a property under 60k. The rehab would require the use of some CC debt though (possibly HELOC), so it would hit the bottom line but frankly I'm more concerned with experience and hit the ground running than netting 15k on the deal. Obviously the goal is not to lose money and to do our due diligence every step of the way and treat it as a profit deal.
After 6 months I would have a greater personal cash flow income due to the CC being paid off that could be reinvested in to the BRRRR loop.
Path 2 - Happy Wife, Happy Life
My wife has wanted to move out of our home for awhile, we looked to moving as far as South Carolina where I have some family but ultimately her business here is picking up and we choose to stay up north. Before I had this real estate investment goal, my main reason on not wanting to relocate up here (where we already own) is I didn't want to start over on a mortgage payment for another 30 years and I'm happy with our home.
In reality it was really only to be a starter home but we have been here for 10 years now and its time to rethink it. We both want more kids but we really need a bigger house to support this. So on this side of things, our house is worth a bit more and we have about 75k equity sitting in it if we sold it today (excluding all the selling fees and costs). This 75K could be used as a down payment on a FHA loan, pay off the debt and probably still allow me to have 10-20k left over to invest in my first property.
We talked about trying to rent out this property we currently have and purchase a new house but since our current home wasn't purchased intent for BRRRR the numbers don't work out unless we refi back out to 30 years and even then its a high rent item with high risk as our first property and vacancy could hit us hard.
Has anyone had to make a decision like this, does it make sense to cash in on a property I have now to build a bigger wealth faster? Or should I consider using the equity I have in the home now to help finance the first path and stay in our home for a few years until that ball is rolling.
Thank you for your opinion in advance,
Chris P
