All Forum Posts by: Phillip Rosin

@Robert Tinker Thank you for your input. I certainly agree that any debt that doesn't earn a return is not desirable and I am equally considering paying off my current debt. 

If I pay off my debt, leaving around 40K left, would you suggest I then wait and save up for a year or two, to get a larger down payment available, or try to find a lower priced property and start from there? Also, would something in the middle also work, like paying off the car loan, which would free up $300 each month? 

Regarding debt to income, I'm currently sitting at roughly 20%. Paying off the car loan would put me around 15%. Is under 43% generally still the guideline? If I paid off my car loan, for example, I'd be under 43% with an $1,800 mortgage for a full rental. If I got something I could live in, my current rent expense of $750/month would no longer be in play, putting my DTI even lower, since we'd rent out my girlfriend's place and she'd pay rent and live with me. Just bouncing around numbers, since I can't keep them out of my head lol.

Thank you so much for your reply Brenden. I'm sorry if I came off as looking for validation. That is certainly not the case at all! I was just hoping to convey that I am not afraid to let that debt remain if that is the best plan, since I can easily afford the payments. 

I read the newbie guide, as well as a few other articles, and have a general idea at this point of how to evaluate properties... I think. The trouble I'm running into is, at least in my area, there do not seem to be many properties which are at a price point to generate cash flow and cash on cash returns which exceed what I could likely achieve from stocks or private lending. I'm guessing I'm probably doing something wrong in my calculations. I'll start posting in another section about some scenarios I'm finding and see if anyone can help me get a feel for running the numbers. 

As for the 2K number... That's about what my core monthly expenses can be indefinitely, so I would like to at least have the comfort of knowing my expenses will always be covered, even if I was unemployed for a period of time. At that point, I could also start considering going into business for myself. Ideally I'd want a bit more coming in, but I wanted to be as realistic as possible to start with. 

I have ready many, many opinions on the topic, but never one with my specific scenario, of course. I would love to hear some opinions on what others would do in my shoes. 

I'm a 36 year old in the Clearwater, FL area. I just sold my home (purchased 5 years ago) for a nice return and am now at a crossroad. I moved in with my girlfriend and am paying half of all the expenses, including mortgage, which comes out to around $750/month. In total, my monthly expenses have dropped by $1,500 after selling the house. With that, here are my current financials:

Liabilities: Student Loans ($55K @ 4.8% & $250/mo), Car Loan ($9.5K @ 5.5% & $300/mo)

Assets: Cash ($105K), Stocks (Not touching these, but around $20-30K)

Expenses: 2K/month with the loans

Subtracting expenses from take-home leaves an extra $2.5-3K each month. Also worth noting: 7% of my paycheck currently goes to a 401K and I get a 3.5% match from my employer. 

Credit Score: Excellent

Would you suggest I:

- Pay off all my debt first

- Pay off none or some of my debts, such as the car loan ($9.5K) which frees up $300/month, and use my available cash (Less at least 6 months worth of expenses, so probably up to $70K) to invest

- Some other approach

The $65K in debt is only costing me around 5% and I'm not stressed about having those debts. My gut is telling me I would regret investing (paying back) that much money to get a 5% return when I could get much more than that by investing it. However, I want to make the smart decision, whatever that may be. My goal is to have at least $2K/month in cashflow within the next 5 years; more would obviously be great. Though I have no interest in fully retiring, I also want to be in a position to retire, if desired, within the next 10-15 years. Having that financial stress gone would be amazing. 

I look forward to hearing your input. Thank you!

Hello,

My name is Phil. I am a software engineer / tester in the Clearwater, FL area. I also have a background in construction and some sales / customer service, as well as enjoy building custom furniture and other fabrication projects. 

Regarding my real estate experience / status, I just sold my first home, which was purchased 5 years ago. After a water damage incident in the middle of a diy renovation and a job location change from Tampa to Clearwater, a realtor friend wanting to move into the area approached with an as-is offer which I could not refuse. 

I'm currently in the process of learning as much as possible and weighing rentals against stock investing. I'm also deciding whether to pay of my low interest debts first and use what is left to invest, or keep my debts and look for opportunities which yield much higher returns.