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All Forum Posts by: Mike Sheppard

Mike Sheppard has started 4 posts and replied 33 times.

Post: Looking for Agents in Detroit

Mike SheppardPosted
  • Contractor
  • Annandale, VA
  • Posts 35
  • Votes 10

Hey there. I have been doing a lot of research involving Detroit and how it can be a great place to invest for buy and holds recently. The biggest thing I have learned with the area is that it is VERY important to get something in the right area. It seems like most prefer the suburbs a little further out from the city where crime is lower and investments are less risky.

Long story short I am looking for a real estate agent in the area. I live in Washington, DC, and plan on visiting Detroit soon to check the area out, but I have no prior experience with it. I need an agent who knows the area and has some experience with investors. If you have someone for me to get in contact with, please let me know!

Thanks!

MODERATOR: RECOMMENDATIONS ONLY IN THIS FORUM, PLEASE.

Post: 401k Question - To pull money out, or leave it

Mike SheppardPosted
  • Contractor
  • Annandale, VA
  • Posts 35
  • Votes 10

You are right, I have a lot to learn. That's why I am here. To learn from you guys. I understand completely what you are saying and I agree. There are better ways.

Post: 401k Question - To pull money out, or leave it

Mike SheppardPosted
  • Contractor
  • Annandale, VA
  • Posts 35
  • Votes 10

@Brian Mathews I have had a 401k for four years. I am 24 years old now. Four years ago, I was making $30,000 including overtime trying to survive in Fairfax, VA where the median income is just over $100,000 a year. A cheap, small, run down house costs $2,500 to rent. A one bed one bath apartment an hour and a half away from work (DC) that requires you to sit in the USAs #1 worst traffic, costs $1,500 easy. In four years I have worked my way up to about median income; just over $100,000 - keep in mind I work closer to 80 hours a week than 40 most of the time. You can bet I was not contributing hardly anything to my 401k for the first couple years, I was trying to survive with multiple roommates in places I did not like at all. I am finally at the point where I can rent a house, and I am. The best deal I could find in the area I want, was $2,300 a month. A 3 bedroom, 1.5 bath house. And I got a deal because the house is owned by a co-worker, I'm paying less than what he could be getting for it. Do I need the house? No. That is why I am giving it up. I will go back to an apartment. I will sell my cars, and anything else I don't need. Do I have credit card debt? Yeah, that I can now finally begin to pay off, because I no longer need them to buy groceries. I'm not married, I don't have roommates or anyone to split rent with, or utilities etc. I don't have much left at the end of each month to save. And what I do have goes straight to credit card payments and utilities. There is a little left to save, but not much. So I'm giving all that up, going back to smaller living places, and saving more money. Finally getting my head above the water and I want to use that money to make more money.

Taking that money out of the 401k would certainly help me. It would nearly pay off my entire credit card debt - or - it would be almost an entire down payment on a rental property in Raleigh, NC, which I visit frequently for family. This isn't something I would do right away. Maybe a year from now, after I've gotten more money together for a larger down payment, repair costs etc etc. It would help me jump start whatever I decide to do pretty well. And the way I see it, there are better things I could invest money in than a 401k. For example, currency trading. I don't have any large capital, but I can consistently produce a 3-4% per MONTH ROI, with ease. The problem there is, you need a lot of money to make money. That easily beats a 401k. And that is just one example. Being 24, who knows if that 401k will still be there in 40 something years when I can finally take it out.

All in all, it's not a big deal either way. It's a small amount of money that wont make a big difference in the long run as far as getting started in REI is involved. You all have great points and thank you all for the advice. I will likely just leave it unless, as suggested, a great opportunity comes and it would help.

Post: 401k Question - To pull money out, or leave it

Mike SheppardPosted
  • Contractor
  • Annandale, VA
  • Posts 35
  • Votes 10

You have some very good points. I've been reading and learning quite a while now. I'm pretty much to the point where it's time to take action. My plan is to get started. Either with rental properties south of me where it is more affordable, or buying a fixer upper house here in Northern VA, that I can live in while I'm renovating. Those are my two plans to get started. Both of which require money to get started. I also have some credit cards to pay off first to lower my DTI. If I had the capital to get started, and the DTI, I wouldn't even think of touching the 401k money.

I can either leave it there, or take it out and get started sooner. I can't decide which would be the better investment. I am leaning towards taking it out and getting started within the next year. Or leave it and wait more years and be even more behind. I don't plan on working for this company in another five years. My job makes me a six figure income, but I can't stand it anymore. Taking out a loan would take money from me weekly that I could otherwise use elsewhere. I do know that the money payed back to a 401k goes to myself anyways, but it goes back into the 401k.

Post: 401k Question - To pull money out, or leave it

Mike SheppardPosted
  • Contractor
  • Annandale, VA
  • Posts 35
  • Votes 10

My whole reasoning is, in several years I do not plan on working for this employer anymore - if I even have to work for anyone again. If I can get my real-estate business up and running in five years, I would rather focus on that. Obviously that takes time so I cannot quit now. But I don't have much money in there, a little less than $20,000. If I take a loan against it the most I could get would be a little under $10,000. That wouldn't get me far. I feel like pulling the money out, taking the "loss" which would have been money I never would have seen anyways, and using it to get a head start would be the better idea. I don't want to have my entire 401k loaned out and then want to quit my job.

Great responses above. I have a lot to think about.

Post: 401k Question - To pull money out, or leave it

Mike SheppardPosted
  • Contractor
  • Annandale, VA
  • Posts 35
  • Votes 10

Hello everyone. I am new to investing and getting very close to finally getting my feet wet. Over the last couple of years my mindset has turned 180 degrees and I now look for investments rather than higher paying more work intensive jobs. So my current issue is.... Do I take the money out of my employer 401, or leave it? My goal would not to have to work for anyone ever again in the next 5-10 years, and live mainly off of my investments. I only have about $20,000 in there now, and assuming taxes and 10% penalty I'd probably come out with $12,000ish. This could give me a jump start on down payment for rental properties or rehab houses, etc.

What do you all think? I see no reason to further contribute to my 401k, as it's not a great investment in this day in age. And I think since I have such a little amount it in anyways, I don't see the point of rolling it over to a solo 401k or IRA and trying to invest with it. I feel like by just taking the penalty and pulling whatever is left out, I could get a quicker jump start on my investing. I am only 24 years old and eager to get started.

Please let me know your opinions and advice! Much appreciated!

Post: New Member - DC / Northern Virgina

Mike SheppardPosted
  • Contractor
  • Annandale, VA
  • Posts 35
  • Votes 10

Welcome @Dante Bellins ! I am a new investor as well, and I also live in Fairfax and am 24. I'm pretty much where you are right now as far as investing goes. Looking for a strategy to get started, and trying to figure out what form of investing I really want to do.

I haven't been on the forums long, but I have learned a TON already. Definitely a great place here!

Feel free to inbox me if you'd ever like to get together and discuss ideas. We probably wont be much help to each other but it never hurt to put more heads together!

Post: So my first local REIA meeting.......mixed feelings.

Mike SheppardPosted
  • Contractor
  • Annandale, VA
  • Posts 35
  • Votes 10

I am definitely interested in this as well, as I am going to be going to my first meeting soon. I was hoping to find some genuine people to network with and learn from. Rather than have a bunch of sales pitches and people wanting my money for mentoring.

Post: Question about income from rental properties

Mike SheppardPosted
  • Contractor
  • Annandale, VA
  • Posts 35
  • Votes 10

@Amanda Hensley That is very awesome! Congrats on your success. It is inspiring! The support on these forums is awesome. In just a few short days I feel like I've learned enough to at least get started. I was pretty lost before this thread! haha. Definitely excited to get started. As soon as my DTI is a little lower, I can begin.

Good luck to you as well!

Post: Question about income from rental properties

Mike SheppardPosted
  • Contractor
  • Annandale, VA
  • Posts 35
  • Votes 10

Haha, I am learning, that's for sure! It's amazing how much more I understanding this in just a few days from you guys answering my questions. If I had the credit score at the moment, I would be ready to jump in and get going I think. Luckily the only thing holding my credit down is credit card utilization. After I pay those off I will be in good shape. Never missed a payment before!