All Forum Posts by: David Zeek

I have used the loan twice, once to pay off some debt and the other was to help pay for a downpayment on an investment property. It is a fairly simple process, and since the COVID hit, you don't need to notarize anything. Overall, it was a good experience and easy to do. My only advice would be to have a deal already lined up before you take the money out of your TSP. I pulled the trigger on the loan before I had a deal line up and the cash just sat there for three months. It takes roughly five business days from when TSP receives your loan request to get the money in the bank. I recommend getting the deal first and then applying for the loan. This strategy will let your money work in the TSP, gaining value from the stock market, while you find a solid deal.

Another option to look at is the CARES act withdrawal, which I just did as well. It is a penalty-free, tax-free withdrawal from your TSP. You have to claim "hardship" from COVID....which can be anything from a family member diagnose w/COVID, to your wife has to stay home to watch the kids due to daycare being suspended, or you don't feel safe for your kids to go to daycare and your wife can't work because of it, etc. The only thing you have to take into consideration is that the money you take out can not exceed 100k and you have three years to claim it as "income" during tax season. Meaning, if you take out the max amount (100k) you can break it up in three-year chunks to claim (as income) it on your taxes.

Hope this helps.

Dave

@Yonah Weiss

My undergrad is BA in Leadership and Workforce development and I am currently pursuing my Masters of Science for Business Management. I believe a degree helps you critically and creatively think, to include how to conduct extensive research. I probably have written hundreds of papers, and not one of them about real estate; however, the research involved within each paper taught me how to conduct due diligence before turning in for a grade. Moreover, the extensive research taught me how to analyze a property before buying it. So, I think a degree is not necessary but it does have value when making costly decisions.

-Dave

My wife and I are just starting the REI obsession and we currently have two rental properties, which we manage ourselves. My wife has a lot of fire for the RE game and wants to fix/flip to make capital to invest into more buy/holds. Me, on the other hand, rather not deal with rehab/remodeling and invest into buy/hold for passive income.

We currently have approx 40k of capital to either fix/flip or potentially buy two turnkey properties. Turnkey properties can sale for around 100k in my area; therefore, using 20k for the down payment on each property. Renting the properties and doing the beer math in my head, we will roughly see a 10-13% cash on cash of return.

Here’s another kicker, I’m in the military and will not be home for the next 11 months, and my wife still wants to do a fix/flip! I think a buy/hold and rent it out will better fit our needs, due to me being gone and I can’t help her with renovating a home.

Any advice on driving home the point of buy/hold/renting is better for passive income and long term wealth?

Thanks y’all!!

-Dave

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@Jimmy Lieu I like how you are thinking. I think having a broad portfolio is good in case one sector is performing poorly and another is doing well. Basically, not having all of my eggs in one basket. 

@Account Closed I have around 40k in cash reserves to use on REI and an additional 20k in the stock market doing its thing. My wife and I are going back and forth with what we should do to make money now (wholesale or fix/flip) to later buy and hold for passive income.

@Mike Dymski Thanks for this perspective. 

@George Skidis thank you so much for your input. You gave me great insight, especially about RE investing helping pay for your children’s education.

@Craig Anderson thank you for all the great information. I will take this into consideration.

@Jody Sperling thank you for the advice.

My wife and I just placed an offer for a duplex in an area across the street from a small trailer park in Alabama, but around the block there are houses for 150k and above. I’d say it is a C class area.

The cash on cash return will be around 14%, from the historic rental information and the 20% that we will put down for the property.

How stressful is it to deal with low income tenants? Knowing their credit will be low, what are some good points or questions to ask potential tenants to find out if they are the best fit for my wife and I? (We manage our own properties)

Thank you!!