All Forum Posts by: Zachary Dosch

I really find this topic interesting and I think about it every time I read an article telling us that we will never be able to retire.

Yes, I am maxing out my company sponsored & matched roth 401k and seperate individual Roth IRA, but Im also scraping together as much as I can to get into as many good rental properties as I can now.

The way I see it, I would rather shell out 5, $30k down payments for single family houses and collect $8,500.00/mo in rent rather than build up my 401k to $1MM and get maybe half of that if you are only taking out interest.

The difference in out of pocket outlay for the different routes is absolutely staggering and I can't understand why more people aren't going this route.

Of course diversification is important and its hard to argue with a company match so I will continue down that path, but for a 26 year old, Im much more eager to purchase even 5-10 single family homes and pay them off over the next twenty years to enjoy an early retirement. One that I couldn't dream if it was only to be funded by my 401k.

The snowball effect that can be created from rental real estate, if you do it correctly, dwarfs everything else by a wide margin.

Im glad more people are considering it because I was beginning to think I was missing something. Its too obvious to me.

I would greatly hesistate to take the tax and penalty hit. I would just leave that amount and withdraw it when he can and in the mean time take the funds he would have been contributing to account in excess of gaining the company match and put it towards real estate. Sounds like he already has a great head start, it shouldn't take a whole lot more for him to finish it off. It wouldn't take a hail mary like cashing in his 401k.

No, Will, I will no play poker with you!

That's why commercial loans rarely have a term longer than 5 years. There is much less bad debt.

Also, with the way the amortization schedules are set up, banks are making much more than 4% on the mortages most people are paying on. People sell their house just when the amortization schedule is starting to tip in their favor.

That would be interesting. It would bring everything to a screaching halt and really jumpstart private lending.

I think people are getting so spoiled by these low rates that they just wouldn't borrow anything.

You are correct, I just responded under the assumption that it wasn't an FHA loan due to how old the loan was.

I really don't think they are going to rise quickly. The Fed knows the housing situation is too fragile and wouldn't be able to overcome something like that.

If the interest rates go up they will negatively affect home values. How much? Its tough to exactly say but its as simple as people not being able to afford higher payments which would naturally pull housing prices down slightly.

Personally, I firmly believe that there should be a greater variation in the interest rate a person receives based on their current financial situation, the LTV the loan is written at, and their credit history. There isn't nearly enough analyzing of what is the true risk of the loan.

Fixing interest rates at 3.5% for 30 years is asinine (for the note holder). Its sure nice for consumers, though!

There are some loans that are assumable but they are very rare.

You will most likely have to refinance it or have her sell it to you then have her sign a quit claim deed.

Why does she want to do this? It sounds like you are a good ways into the 15 year loan, I would hate to see you start the amortization schedule over just for symantics. I would try to hold on a little longer, pay off the loan naturally, then quit claim it over to you.

The biggest issue might be whether you need your real estate license or not. It varries from state to state. I think that would be a good place to start.

Im looking forward to everybody else's comments on this even though I know there has been other threads on this topic.

Possibly but not for sure yet. I have a lot on my plate this fall - wedding, honeymoon, new house, and Notre Dame games against Michigan and Oklahoma. I wouldn't mind taking in the BYU game as well. I can always make time to see a good old fashion butt wooping by ND! ha

Too bad you aren't continuing on to North Dakota (Bismarck). Interesting real estate situation and good golf!