All Forum Posts by: Joshua A.

@Joshua A.  I totally agree with Victor E. You have window of opportunity to house hack your condo. That would alleviate some of the burden. As far as your credit cards, which can be of the highest interest rates,  if you can transfer this debt to a new card with 0% interest for a minimum of 12 months, this can help paying down your cc debt faster. If that's not an option, consider paying them down significantly, where your income to debt ratio is 25-30%. (This helps with your credit score). With your car payment, instead of sending one payment due a month, split it down the middle and make payments bi-weekly, taking note to apply it towards your principle, lowering your interest. 

Personally, I have gone through my share and as I'm sure many members in Biggerpockets as well. You are definitely not alone. But what this fine group, the vision is clear. "The rat race is not part of the plan". Its taking me a couple of years but now, for the first time ever I've preapproved and in the process of buying my income property, practically debt free!! 

You got this! 

Joshua A. The most difficult step has already been taken. You realize you have a problem, I'm in the same situation with about the same misc. debt. The next step is going to be very difficult and will require sticking to the required life changes. Stick to YOUR goal and pay off those debts one at a time and eventually you'll be out of you situation! Remember stick to your goal it will be worth it!
-Matt Moore

Joshua A.
Congratulations on experiencing the major life wake-up call! In five or ten years you will look back on this moment fondly as the time your life changed for the better.

I would strongly advise getting your personal finances in order before jumping into investing too deeply. I would say to try and house hack but might be tough considering you've already just bought a primary residence. Getting your personal finances in order will take less time (since your full time job eats up most of it) and will build a foundation allowing you to be more tolerant to risk once you start investing.

I think Scott Trench's book "Set for Life" would be absolutely perfect for you! It is written from a personal finance AND real estate investors view.

@Joshua A. You should go network with a local REI club. Based on the last meetup's discussion, construction-related experience is a big plus on the island. Their next meetup is this Thursday coming up. You'll meet some fantastic folks. Big shoutout to @Christian Cramer for organizing these!

@Joshua A.  Have you thought about house hacking your condo? Live in the smaller of the two rooms and pay off that 10k cc and car loan asap..  Also, as you've mentioned you are paid quite well as a project engineer... what life cost has you living paycheck to paycheck?!

Nothing really to add that wasn't said above. Consolidate the cc and personal loan into one. Is your score high enough to open a no-interest cc and transfer those debts? (look for 18-24 months 0% apr and do this again in the future if, there's not enough time) Start looking for ways to maximize income as well. Look for other W2 opps, if this one is not working out monetarily. Network, also. 

Good luck, man. If there's a will, there's a way.

@Joshua A. sounds like your hair is on fire.  I think your first order of business should be getting that debt eliminated, and optimizing your finances.  Dave Ramsay is a good starting point, but if you really want to hit the gas pedal, check out the Choose FI podcast/website, Mr. Money Mustache, JL Collins NH, and The Mad Fientist, among others.  Taking the time to read all the blog posts (yes, ALL) should take a while and give you a tremendous foundation to build on.  I assume you've already listed to all the Bigger Pockets podcasts and read all the blogs.

Quitting your job, selling a property, and moving seems like it would rack up a TON of additional expenses.  You might want to suck it up for a couple years at your current job until you have your finances squared away and have built up a war chest.  Maybe try to find a better paying job in your current location/field.   You live in freakin Hawaii, things could be much worse.

@Joshua A. I think you need to work through your life plan and your dreams at the same time.  If you have a chunk o' credit card debt and need to save to flip homes that's a tough place to start.  As others have said, it's far from insurmountable but that $10K credit card debt (with the extra fun interest rates) is just going to eat you alive.  But once you get past that temporary challenge you'll run into another: your chosen market.  Setting aside the cost of living in SoCal the cost of entry for homes to flip is extremely high compared to...well...maybe 95% of the country?  That doesn't mean you can't do it, it just means you'll have to partner up and/or wait a lot longer to start.  I'm guessing both.  Buying and renovative a $800K home might not be achingly more difficult than an $80K home but downpayment, holding costs, etc. are astronomically higher.  So, unless you're moving in with mom and dad, are you sure you want to come back to SoCal if your dream is the flip and renovate homes? 

Sorry to hear you're in a rough spot. You're only 30 and if you are committed to a financial change, you have tons of time to build wealth. For expense reduction, the first place I'd look is buying a much less expensive car. Save everything you can and pay that credit card off aggressively. If you don't eliminate it quickly it will become a monster.

Once you get your expenses down, it sounds like the primary problem is income. Everyone loves talking about passive income in real estate, but in reality before that can happen you have to first at least get out of bad debt and have some savings. If you can get rid of at least your CC debt and personal loan, and then save up a 5% down payment on a house, then you can make some magic happen by renting out rooms or units of your house.

You sound like a perfect candidate for a Dave Ramsey money makeover... get a copy of his book immediately if you haven't yet. 

@Joshua A. Sorry for the unfortunate circumstances but congratulations on wanting to make a positive change.  Have you thought about additional sources of income to pay down debt/purchase future investments/bolster savings?  I would tackle that debt aggressively as I'm assuming those have killer interest rates (starting from the highest rate debt first).

I don't know logistics in Maui but have you thought about doing any/all of the following for additional side income sources?:

1) Uber/Lyft

2) Side contracting/handyman work

3) Airbnb spare room?

Also, if you do decide to relocate to SoCal and rent from a standard 1 year lease isn't enough to cover your expenses, maybe you could Airbnb your condo for increased rental potential (and additional effort)

I understand these ideas may not be ideal or convenient but digging yourself out of debt is never easy.  Best of luck.