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What's the next step in building wealth?

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800who
Regular Contributor

What's the next step in building wealth?

I've been trying to buy my first house since January, and I recently gave up for the time being and signed a one year lease for an apartment with my girlfriend(the market is terrible in my area and I'm motivated to get out of my current situation). I have $30k in liquid assets, the only debt I have is $1800 left on an auto lease, I was going to use the cash for down payment, closing costs, furnishing the place.. etc.. now what? I have a federal job where I contribute adequately to the TSP, is this the time to begin personally investing? I'm very interested in pursuing real estate and have been for a couple years(buy/build houses & rent them). The place I am moving into is a stand alone one bedroom apartment that the landlord built himself on his own land out behind his house that he also built himself, I hope over the next year to pick his brain and learn things about building because I know nothing... what should I do now?

Message 1 of 15
14 REPLIES 14
Anonymous
Not applicable

Re: What's the next step in building wealth?

All good motivations.

 

You do now have a year to plan it out.?

 

Look into multi units (if not already), as sounds like you are in a very good spot to live in one,

rent the other half or other units. 

Over 4 is considered commercial, so maybe stick to 4 or less to stick with conventional etc.

 

Not sure if you already have your liquid in HY or certs, but could spring for 12 month if you can find better rates than HY

 

I have been in similar thoughts for the last 10 years lol, but have never pulled trigger.

It almost happened with half dozen properties over those years.

 

I do have 4 kids living at home, so multi live in would not work currently.

Recently I have been again looking hard, but still not ready to commit.

We may just relocate and start a farm to keep it simple and also because the

industry for the business I started 11 years ago may be going caput.

 

youtube has obviously many vids that are nice to watch, but most are somewhat non detailed, just glamorized

Would like to hear other input on real estate, more like real life xp.

 

Message 2 of 15
SouthJamaica
Mega Contributor

Re: What's the next step in building wealth?


@800who wrote:

I've been trying to buy my first house since January, and I recently gave up for the time being and signed a one year lease for an apartment with my girlfriend(the market is terrible in my area and I'm motivated to get out of my current situation). I have $30k in liquid assets, the only debt I have is $1800 left on an auto lease, I was going to use the cash for down payment, closing costs, furnishing the place.. etc.. now what? I have a federal job where I contribute adequately to the TSP, is this the time to begin personally investing? I'm very interested in pursuing real estate and have been for a couple years(buy/build houses & rent them). The place I am moving into is a stand alone one bedroom apartment that the landlord built himself on his own land out behind his house that he also built himself, I hope over the next year to pick his brain and learn things about building because I know nothing... what should I do now?


I don't know. The fact that you're asking a question like that to a bunch of anonymous strangers, who may or may not be qualified to advise you on something like that, suggests to me that your money should be in a savings account.

 

 


Total revolving limits 568220 (504020 reporting) FICO 8: EQ 689 TU 691 EX 682




Message 3 of 15
Anonymous
Not applicable

Re: What's the next step in building wealth?

Personally I would probably wait it out until this crisis has abated. While it may be a great time for rates and buyimg property in general, it's a rather different scenarios for renting. With all the renters that have gotten deferement it could cause some owners to default themselves, by not having that revenue. So if you don't have the reserves to ride out something like this it might be bast to wait.

 

Or at least buy something within your means where you wouldn't need to rent the other units out immediately. 

 

Message 4 of 15
800who
Regular Contributor

Re: What's the next step in building wealth?

@SouthJamaica not really looking for someone to tell me what to do... I like to brain storm and have collaborative thinking to have the possibility to expose my self to thoughts or ideas I haven't yet been exposed to, to further my own thoughts and ideas and to start a potentially interesting and informative discussion. Thanks! Smiley Happy

Message 5 of 15
800who
Regular Contributor

Re: What's the next step in building wealth?

@Anonymous  I am trying to avoid that because I am heavily motivated, I am not one at all to make rash decisions, most if not all of my decisions despite what the context is have some sort of research put before being made because that's just who I am lol, but I don't want to have life pass by and have only accrued cash in a savings account for 40 years, I'm talking like retire at 55, travel, ride the boat, whatever I feel like doing with whatever money it takes lol for lack of better example. I want to generally be more productive.

Message 6 of 15
Anonymous
Not applicable

Re: What's the next step in building wealth?

Well I heard that the markets are down pretty low, still low.

Investing wise now with 401k, IRA, stock accounts, will make many millionaires over the next few years.

 

That and "investment" properties are both investments.

 

Both and any other business investments all come with some degree of risk and all should require

due diligence and much hard work and non stop attention.

 

Getting your money to work for you, can and does work, but as others have mentioned....right

 now can be the perfect time or not such a good time.

 

All "investment" property purchases do require some number crunching to see if they will work.

Adding in current financial variables are somewhat like throwing a wrench into a well oil machine.

 

I think that is why I have never pulled the trigger. BUT I do know that I seem to be happy at my decisions

that I have not yet. I have had much more freedom by becoming "wealthier" by not taking on more debt

and actually have become almost debt free and owning my home free and clear...very soon.

Yes, If I would have chosen to do it 10 years ago, I Possibly could have many properties by now, or maybe not.

Unsure, but I do not beat myself up over it....too much lol.

 

And the cherry on the top is my eldest son recently graduated high school,

with my youngest son just starting school last year lol.

So it is nice to have some, just a little bit of free time to spend with them and not only listen to them,

but teach them about managing money.

 

I think I spoke a bit too much on your thread, but to end this post, I will say there are some

property investment forum specific to this and FIRE ones.

 

I still stick true to my sayings of the past, you can be a millionaire and be poor, or you can have a part time

job making minimum wage but still be wealthier than that millionaire. 

Just manage your money and spending habits really well.

 

Be happy and stay safe!

Message 7 of 15
SouthJamaica
Mega Contributor

Re: What's the next step in building wealth?


@800who wrote:

@SouthJamaica not really looking for someone to tell me what to do... I like to brain storm and have collaborative thinking to have the possibility to expose my self to thoughts or ideas I haven't yet been exposed to, to further my own thoughts and ideas and to start a potentially interesting and informative discussion. Thanks! Smiley Happy


OK I can respect that. So let me brainstorm with you.

 

IMHO real estate is very risky and very illiquid, so that it should never be done with your own money, unless you have a lot of extra money you can afford to (a) lose or (b) tie up. It should be done through a separate business entity, and it should be done on money borrowed by the entity through mortgages. I just don't think you have enough money to play that game yet.


Total revolving limits 568220 (504020 reporting) FICO 8: EQ 689 TU 691 EX 682




Message 8 of 15
800who
Regular Contributor

Re: What's the next step in building wealth?

@SouthJamaica   May I ask what's the nature of your business?

Message 9 of 15
SouthJamaica
Mega Contributor

Re: What's the next step in building wealth?


@800who wrote:

@SouthJamaica   May I ask what's the nature of your business?


I'd rather not say.


Total revolving limits 568220 (504020 reporting) FICO 8: EQ 689 TU 691 EX 682




Message 10 of 15
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