All Forum Posts by: Jacob Ritter

Hey, Christopher!

I think some of the worst ways you can spend money are many. The most common way I see people misusing money is when they spend it mindless or on things that they don't truly value. This can be very subjective, so you will have to evaluate what you truly value and whenever you spend money (whether it be $100 or $1,000,000) that it has some true, impactful purpose behind it.

People also aren't methodical when it comes to saving money. You need to make sure you pay yourself first, not as a last resort if you have any money leftover at the end of the month. My typical rule of thumb is make sure you get two things on auto pay - bills and savings. 50% of your money should go towards necessities, 20% towards savings which leaves you 30% for fun money. The more you can lower the necessities and fun money and increase your savings the better, but don't neglect yourself in the process. Hope this helps!

Feel free to reach out personally if you have any other questions. Best of luck, Christopher!!

Jingwen, thanks so much!

Wow, Evan! Thanks so much for the time and detail you put into your response. Truly appreciate that from the bottom of my heart! I’ll definitely look into the house hacking and some of the other terms you mentioned. God bless :)

Thanks so much, Taylor! I appreciate it a bunch :)

Hey, guys! I am very new to real estate investing, but I want to start out on the right foot. I am just starting out as a financial advisor and I focus on working with clients who own businesses and real estate portfolios. I want to know, personally, how to get started with owning rental properties but don't know where to start.

Areas I would interested to know more about would be:

1)business entity set up 

2)tax-advantaged strategies 

3)setting up most of my business on 'auto-pilot' so I can focus on my career but start building up a passive income source

4) what types of excel sheets or other types of software you guys use to manage your real estate and run basic evaluation as to whether or not a property can be a good investment

5) what types of things I should be looking for or aware of while starting out that you wish you had known before getting started

6) good sources of financing or places to look for when buying an investment property

If there's anything else you can think of I would really appreciate your personal input! By the way, I don't own my own personal piece of property yet, however that would be my first move and I was considering buying a condo as a starter home initially. What are your thoughts and how can I improve my REI journey from here on out? Thanks in advance!!!

Nikolai,

Congrats on the wedding - it is fast approaching next month!

I would personally looking into finding a reputable company that does personal loans at a fair rate that is willing to work with you. Since you have such little credit limit, it seems rather unlikely they would extend you so much extra. You can always call and ask - nothing ventured, nothing gained! 

If I were you, I would look into banks and credit unions that specialize in these situations and have very high ratings from many sources. Credit cards can have all kinds of caveats and issues that come with them. For example, if you were to get a 0% interest-for-the-first-year type of credit card, if you failed to pay off that balance in full at the end of that year they could come back and nab you for an extremely high interest rate (15-25%) on all of the initial principal you owed on the card and continue to charge you that high fee as time goes on. There's a reason a credit card should be your last resort to fund a big expense over time. 

If you have any other questions, feel free to reach out! Best of luck, and again congrats to you both, Nikolai!

Hey, Phillip! Love that name (it's my middle haha!).

Congrats on paying off the car. What a FEAT! Your student loan rate seems very reasonable, and I would focus on the big portion that seems to be largely un-addressed. The big heap of cash.

Money sitting in a bank - even a high-yield savings account - is barely keeping pace with inflation. I would do what you said you might do and do a combination of throwing a bit of extra principal at the student loan debt, investing your free cash by maxing out a Roth IRA (if your income bracket allows it), and saving enough money in cash to get more invested into real estate properties and then take whatever remaining money you have and invest it into the market in a diversified portfolio of asset classes and risk levels in relation to your comfort with risk.

What a great position to be in, and congrats on giving yourself such a great head start! If you want to discuss anything further I'd be more than glad to give you more info on my own personal thoughts. Best of luck, Phillip!

Hey, Joni!!

Hope that these fine fellows have helped you see where you might find more success with an advisor who has YOUR interests in mind. I personally am newer to the REI scene, however I LOVE it as a means to build residual cash flow as well as a means to retire.

I am a financial advisor, and I work with an array of business owners who prefer to use most of their income as a means to invest more in their business and this is great! However, times have been extremely GOOD right now, but if something were to happen in the economy again and you are financially diversified, you can suffer greatly. My dad was doing AMAZING in the real estate market, 2008 happened, and we lost everything. My grandma was really good with money, and because she had a great advisor behind her who helped her to diversify her risk among various assets (including an entire mobile home park) my family came out okay in the end. 

I think you are doing the right thing seeking out professional advice with retirement coming up (my parents are in the same boat!) and working with someone who has your best interests at heart and who can see the value in what you do is CRITICAL! If you have any other questions I would love to talk to you about my personal stance on what you have done thus far to prepare for retirement! Best of luck either way, Joni!!

Hey, Christian! Hope I can be of help.

I personally would not go through the refinancing process for the purposes of paying off her car myself for a few reasons.

The interest rate on her Honda is astounding! 1.9% means that the car company wanted her money so much, they were financing her at a rate that barely keeps pace with inflation and that's it! If you were to pay off the car with some of the equity she has in the house, she would effectively be paying the houses new interest rate on her car (around that 4% mark) versus the great rate she already has.

Secondly, refinancing takes some upfront capital that could likely be put to better use elsewhere. My personal opinion is that anything that costs around 4-5% a year and is for a GOOD REASON (car, house, student loans, etc.) is a great value and you could take all of that money that you might be using to pay off that balance in full and invest it in the stock market - which with EXTREMELY conservative estimates can yield about 6% each year if you ride out the waves.

I am not a CPA, but the tax deductibility is always attractive to people. However, even if you could write off a portion of that tax, you will effectively be paying a higher rate overall to refinance the car into a home loan (unless the home rate it lower that 2.5%ish). 

If you want anymore clarification on my personal reasoning, just let me know and I'd be happy to help. Best of luck, Christian!!!

Hey, Trent! I would personally look into 2 different options.

1) A high-yield online savings account that pays anywhere from 1.5-2% APY OR

2) A Short-term bond fund that pays anywhere from 2.5-4% in interest. 

This all depends on your comfort with risk - it's a big head game. While both options are very secure relatively speaking, one is still invested in the market (but you can find some funds offering bonds backed by the full faith and credit of the US Government) while the other is, usually, FDIC insured (still a government backed operation). If you have other questions don't hesitate to ask me or any of your fellow members. Best of luck, Trent!!