tag:blogger.com,1999:blog-2980246226076317453.post7800864035046844027..comments2024-03-27T09:17:51.095-07:00Comments on Done by Forty: Oops, We Have a Mortgage AgainDone By Fortyhttp://www.blogger.com/profile/06246597867355460723noreply@blogger.comBlogger34125tag:blogger.com,1999:blog-2980246226076317453.post-36002258433446695352016-06-27T10:38:06.271-07:002016-06-27T10:38:06.271-07:00Love it!! This is exactly how we acquired 30 renta...Love it!! This is exactly how we acquired 30 rentals by the age of 30. I just started a blog on the adventures. Check it out! <br />www.littlemisslandlord.com<br />I will definitely be following your blog!Little Miss Landlordhttps://www.blogger.com/profile/02641630859166145519noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-24273053847739508272016-06-26T14:12:09.643-07:002016-06-26T14:12:09.643-07:00I also suspect we may be in a housing bubble. Hard...I also suspect we may be in a housing bubble. Hard to know when it will pop, but I fear our friends in the great white north may help bring the needle to the bubble.<br /><br />I definitely don't think I'll be buying two more out-of-state rentals, given what's recently occurred with one of ours in Indianapolis. But that's a story for another day. If we go with another rental, I think it will have to be local. Given prices these days, that probably means our current house, which we purchased for a song back in 2010.Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-91173261067148442482016-06-26T14:10:02.842-07:002016-06-26T14:10:02.842-07:00I hear you Daizy, and it's definitely a want d...I hear you Daizy, and it's definitely a want driven decision right now. I think we may need to just tap the brakes and just see how we feel about the whole thing after a few months.<br /><br />Wants are fine, but they're not rational or even likely to give us more happiness in some cases.<br /><br />Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-358395888559786162016-06-26T14:08:52.680-07:002016-06-26T14:08:52.680-07:00Hi FIREstarter!
So glad someone else was a fan of...Hi FIREstarter!<br /><br />So glad someone else was a fan of Voltron as a kid. I don't know how popular the show was with the country as a whole, but man, it was popular with my grade school classmates in the mid eighties. I remember my Voltron figurine to this days, with the broken wing and the scraped paint from me throwing it around my house and into the walls, convined it was actually flying...<br /><br />I don't know if we're set, honestly. I know it's suboptimal financially, so we may end up just renovating our house with some of those funds instead. A new kitchen and bathrooms done DIY may not cost us that much, and would make us feel a lot differently about the house.Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-4375442099045103492016-06-25T07:31:08.869-07:002016-06-25T07:31:08.869-07:00I would have raised cash for a year or two then bu...I would have raised cash for a year or two then buy the personal property, then again I know you want to have it now plus you will have in your mind all day now if you don't buy it. Personally, I bought a new home a year ago, and my previous is now rented to family members. I would wait a couple of years anyways to buy a property now, its seems like we are on top of the market right now. Either way you are doing it because you can and no one else is on your shoes.<br /><br />Another option would be to get 100k from your house and buy two other rentals instead of a primary residence. Then raise cash again and buy your primary residence, by then prices may be better who knows, whats happening in the markets may be a sign.. either way a 5% to 15% may occur soon as it always does every 7-10 yrs. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-35629078904607360392016-06-24T12:58:41.117-07:002016-06-24T12:58:41.117-07:00Lol, my sister and I used to watch Voltron after s...Lol, my sister and I used to watch Voltron after school. There wasn't much on TV in the 80's. I heard a lot of "wants" in your post. That's not necessarily bad. You do acknowledge that you might have to work a couple years past your goal date. I have one rental and every once in a while I think about getting another but I know it would put off my early retirement date even more. I'm 44 and hoped to semi-retire at 45 but now it is looking more like 47 if I want to do more on my "want" list. I've been thinking about refinancing or getting a HELOC for a new kitchen in my house before I sell it. I think I am too emotionally attached to it to rent it out. I'm a horrible landlord and learned my lesson the hard way. Property managers all the way for me. So, what am I trying to say...try to align your long term goals with your short term goals. And get tax advice on the rentals if you don't already know that stuff. It might make a difference. Daizyhttps://www.blogger.com/profile/02508550128007940488noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-55901659130330176442016-06-23T15:36:12.036-07:002016-06-23T15:36:12.036-07:00Hi DBF,
First of all: Thanks for posting that vid...Hi DBF,<br /><br />First of all: Thanks for posting that video of VOLTRON!!!! :)<br /><br />I had a toy of that when I was about 3 years old and I never actually knew what the hell it was. Now I know!!!! Was that a popular cartoon in the states back in the day then as I don't ever remember seeing it over here!? Or maybe my memory is just rubbish.<br /><br />Anyway that has genuinely made my day. My mum still has the toy at hers in fact and my nephew still plays with it so now I can tell him what it is next time we're both round there... :)<br /><br />As for the house thing, it sounds like you are pretty much set on doing this and I'm definitely one for just doing what you feel is right so I would say go for it. I'm sure once you are in the next house you won't fall for the constant upgrade trap as you are far too savvy for that! Just gotta know when you "enough" is and if you think that is just one step up from what you currently have then have at it.<br /><br />I'm more than happy in our current house but only been here just under 2 years... come and ask me in 5 years time once TFS Jr is a tearing around the place and possibly with sibling in tow and then we'll see what my answer will be! We all know what the trade offs are being in the PF/FI crowd so we won't take these decisions to upgrade lightly, especially not as a default option which is what most people seem to do...<br /><br />Cheers!<br />theFIREstarter.co.ukhttps://www.blogger.com/profile/11161550795321520113noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-40414401532884133002016-06-23T09:09:59.713-07:002016-06-23T09:09:59.713-07:00True, more rentals are good. :) Though I think we&...True, more rentals are good. :) Though I think we'll hit the point of "enough" pretty soon with rentals, too.Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-84745930805685823572016-06-23T09:09:28.535-07:002016-06-23T09:09:28.535-07:00Thanks, Holly. I'm less worried about the $100...Thanks, Holly. I'm less worried about the $100k mortgage on our current house than I'd be about the $240k+ mortgage on a second one. I'm thinking that latter piece is the real risk.Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-88968879826934177172016-06-22T09:43:10.709-07:002016-06-22T09:43:10.709-07:00I agree with Holly, a $100,000 mortgage isn't ...I agree with Holly, a $100,000 mortgage isn't the worst thing you could do. At least you're adding to your already impressive rental property portfolio!Latoya Femme Frugalityhttp://www.femmefrugality.comnoreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-17285823931875962742016-06-22T05:10:23.560-07:002016-06-22T05:10:23.560-07:00A 100K mortgage doesn't sound so bad! We still...A 100K mortgage doesn't sound so bad! We still have a mortgage. We prepay it fairly fast and pay extra every month, but I plan on riding it out for another 9 years or so at this point. We small mortgages on our rentals too but that has never bothered me.Holly@ClubThriftyhttps://www.blogger.com/profile/16943656467827987350noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-75836055027669050742016-06-21T12:17:24.431-07:002016-06-21T12:17:24.431-07:00I like the way you're thinking. Arbitrage is n...I like the way you're thinking. Arbitrage is not something that comes easily to me.<br /><br />I suppose I'm still not sure of why the ARM is better long term, but I'm probably just missing something. If the 30 year rate is locked at 3.625% and, let's assume, only going up from here, and the ARM's savings of one percent is only 'in play' for a few years up front, isn't it possible that over the 30 years the ARM & the extra refinance strategy might come out behind?<br /><br />Will try your strategy with the photos. :)Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-997803328764685512016-06-21T09:12:20.611-07:002016-06-21T09:12:20.611-07:00Please email anytime! Would love to share our stor...Please email anytime! Would love to share our story, though it's not all positive, of course. :)<br /><br />I know what you mean about it being a low cost area. Perspective means a lot. To us, $350k sounds outrageously expensive now, since our last home here was $132k. But to someone in NYC like you, $350 still is crazy cheap, I'm sure.Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-90678625549617424502016-06-21T08:25:16.545-07:002016-06-21T08:25:16.545-07:00That's really sound advice, Laurie.
We do ha...That's really sound advice, Laurie. <br /><br />We do have a pretty healthy emergency fund and it would grow to account for our higher monthly costs. But our SHTF plan is usually to rent out a room to help defray the cost of the mortgage. In a worst-case scenario plan, we would access our investments that, mostly, are in taxable accounts.<br /><br />As for quickly paying off the mortgage, I think we have a rough plan to try to hit our retirement number (currently $1M) and then pay off the primary mortgage. Basically, the 1500 Days plan. :)Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-46040654186962417042016-06-21T08:14:18.384-07:002016-06-21T08:14:18.384-07:00I'm not (yet) a handy person either, jason. I ...I'm not (yet) a handy person either, jason. I think that's part of what's driving us to select a mostly-remodeled home, which is a bit more.<br /><br />For what it's worth, I think student loans are much better debt than house debt. Student loans have a positive ROI (higher starting salaries, higher wages, more resilience to recessions)...homes are probably more dubious, except in the case of very certain rentals, and even then it's tricky.Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-78535148183940136262016-06-21T08:03:11.476-07:002016-06-21T08:03:11.476-07:00Thanks for the kind words, iFreebies. I'm so g...Thanks for the kind words, iFreebies. I'm so glad that our blog has some value for readers like you.<br /><br />I like your perspective! We very likely are just trying to manufacture happiness via a home purchase, which we know is likely to be temporary. Eventually, everything just regresses to "normal".<br /><br />I'm going to share your post with the missus and see if we should maybe just reconsider our current home.Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-88095908739547166492016-06-21T07:59:42.601-07:002016-06-21T07:59:42.601-07:00Hi EcoCatLady,
Funny you should mention that: we&...Hi EcoCatLady,<br /><br />Funny you should mention that: we're going through eviction right now with one of our tenants in Indianapolis. They dutifully paid their rent for two years, agreed to re-up for another two years on a new lease...then went AWOL and simply moved out without notice. <br /><br />The property manager makes the process much easier than I think it would be otherwise, but its still takes up some mental space and leads to decision fatigue. Overall, I think it's a fairly mediocre deal to hire a property manager but with an out of state rental, it's just a necessity. Locally, we're going to try to manage this one ourselves and save 8% or 10% of rents, too.Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-68038156582286238482016-06-21T07:56:55.148-07:002016-06-21T07:56:55.148-07:00Hey, Tin:
We're definitely maxing out all re...Hey, Tin: <br /><br />We're definitely maxing out all retirement accounts and then some, though Mrs. DB40 doesn't have a retirement account yet since she's still in school, so we're definitely missing out on some tax advantages. I completely agree that selection of market matters.<br /><br />We bought this home in AZ in 2010, and the prices have risen to the point that we wouldn't be able to find a good rental property here now. But, our logic is that we purchases at the 2010 price of $132k, which makes a profit possible. Some mental accounting is involved, I think.<br /><br />We share some of your views on the region re: water. Though currently residential use is not even 10% of all water used, so there's quite a lot of slack in the overall system. Agriculture is taking the lion's share, and if things got to the point that residents were hurting for water, I'm sure adjustments could be made.Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-12845936598089113212016-06-21T06:43:03.405-07:002016-06-21T06:43:03.405-07:00This comment has been removed by the author.The Old Chick in the Backhttps://www.blogger.com/profile/08527939493854661744noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-23045533120592791992016-06-21T06:40:08.767-07:002016-06-21T06:40:08.767-07:00I'm not debt averse if the money is going towa...I'm not debt averse if the money is going towards an investment so I think your plan is good. Leverage can be a good thing. I have to say that I'm always jealous of housing costs in low cost of living areas. Even the more expensive house would is considered inexpensive here. And your rental properties in Indy look good...I'm going to e-mail you for more details as I may be looking in that area in the future!Andrew@LivingRichCheaplyhttp://www.livingrichcheaply.comnoreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-5612762589564984812016-06-21T04:59:33.773-07:002016-06-21T04:59:33.773-07:00Hey, friend!! My only piece of advice would be th...Hey, friend!! My only piece of advice would be that if you do make the leap, to buckle down big time for a couple of years and get that new mortgage paid off ASAP. Do you have a financial SHTF backup plan, say, for if one (or both) of your jobs went bye-bye or if the American economy hit the skids? Laurie @thefrugalfarmerhttp://www.thefrugalfarmer.net/noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-38318375640462681062016-06-20T20:23:39.492-07:002016-06-20T20:23:39.492-07:00Yea I get it just show her a picture of your curre...Yea I get it just show her a picture of your current house and a picture of the one you could afford if you sold the one you are thinking of renting. The uncertainty of interest rates is exactly why I opt for ARMs right now. The break even point for the cost to refinance to a 30 year is about 2 years if I ever get worried about rates getting to a point that I don't want to be involved. Either way if the economy is strong enough to handle those rates my other assets will have appreciated that much more.Anonymoushttps://www.blogger.com/profile/11114546840365929566noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-43581852341612572512016-06-20T19:57:18.480-07:002016-06-20T19:57:18.480-07:00Yes, my best friend is in Denver. I would say it ...Yes, my best friend is in Denver. I would say it falls into the handful of cities I think have a bright present and foreseeable future. I didn't realize it had new light rail stations as well.<br /><br />Passive is a tax treatment, not a measure of effort :-). That being said, the most important part of being a landlord (besides buying a smart property at the right price in the first place) is your tenant evaluation process (and reference vetting!). Maintenance issues are sort of on you in the first place (i.e., what quality is the place and how do you maintain it). It's not for everybody though. Getting the right tenant(s) is key.Tinhttps://www.blogger.com/profile/17710280020482764792noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-66581462425120313652016-06-20T17:34:48.062-07:002016-06-20T17:34:48.062-07:00Actually, CatMan and I are both in Denver, which i...Actually, CatMan and I are both in Denver, which is booming beyond belief right now. I do have to say, if I had bought four houses instead of one back in the early 1990s, I'd be rakin' in the dough!<br /><br />Question about owning rental properties (for anyone out there) - I know a handful of folks who have done it, and all of them have absolute horror stories about nightmare tenants who wouldn't pay the rent, literally tore the places apart and had to be forcibly evicted. Even in the best of circumstances there were your midnight plumbing disasters and a whole host of other maintenance issues. Frankly, it doesn't seem like a very "passive" way to earn income to me. Is there a secret to doing it successfully? Does using a property management company solve all of those problems? Just curious how people are making this work.EcoCatLadyhttps://www.blogger.com/profile/15704811319510740473noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-62899754658433026092016-06-20T17:23:40.104-07:002016-06-20T17:23:40.104-07:00I can understand what you are doing, particularly ...I can understand what you are doing, particularly if you have no other debt. I have often thought about the same thing with us. I like our house, but I believe that we will move to another home in a better school district in a couple of years. Our problem with that plan is student loan debt. That is what keeps me from going down that path. However, if that were gone I think I might follow a similar path even though I am not a handy person.jasonedwards57https://www.blogger.com/profile/13725522432598704753noreply@blogger.com