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So my dad started investing in rental properties nearly a decade ago. He's somewhat in debt but the rent covers all of the mortgage payments, and leaves alittle at the end of every month to get by(food, car payments, etc.). He doesn't have much saved for anything else around the house.
His whole craze about buying rental properties is starting to bug me.
I am going off to bootcamp shortly and long story short he wants my pay checks to go into a joint account with him so he can help me save/invest. Aka he wants to take 80% of my pay and invest it into homes. supposedly I am getting whatever profit comes out of investing...however long that's gonna take.
I have 3 options, either flip homes, rent it out, or build capital. Neither of which will yield me much profit per dollar/time invested. Flipping has its regulations and capital, and renting isn't doing much besides offering me a semi reliable monthly pay check. I have no issue building capital as long as they're into liquid assets, but real estate isn't exactly easy to sell, especially with the money I'm working with(we're talking roughly 15-20k cash). I'm not looking to take a loan at all.
Is my dad thinking too far into my future? Is he addicted to investing? He keeps buying more and more rental properties with borrowed money. Sure he's making mortgage payments but it won't be a good decade or two before he even sees profit(he'll be in his mid 70s by then).
Is my dad thinking non sense and being greedy or is he really getting at something? I am single, no dependents. I don't plan to have kids for atleast another 6 years so it's not like I need a house. I certainly wouldn't mind turning profit on investments but I still want to live a life and have spending money. 80% into savings leaves me like $200 a month for necessities...that's about it.
Sounds like your dad's hooked on investing in real estate, to the point of possibly being over-leveraged.
Your investment plan should be YOURS, not your father's. If you don't feel comfortable investing in real estate yet, then don't. There's nothing wrong with investing in more liquid assets, and historically real estate hasn't offered high returns. Anyway, you should build a cash emergency fund of about 6 months' living expenses before you even start to worry about investing.
You're going to have access to the Thrift Savings Plan. Put your money into that before handing over 80% of your pay or investing in anything.
You need to be investing in something that interests you so that you will be motivated to learn as much as you can about it and make decisions that make sense for the life you want. You may find that you are more interested in other types of investments. Don't let someone else lock you into something you don't want and that might not be appropriate for you or even interesting to you.
I say be careful. If you do it make sure you see all the books. It's never a good idea to co-mingle funds like that unless it's a spouse and some would argue even that. You really have no idea what his debts are and you could put in thousands and lose it if the books are cooked.
Everything is probably on the up and up but like I said this is a business proposition so you have to know the numbers and know your risk. You can always make an allotment of a certain amount and still keep a separate account. That way your still in control.
That being said are you his only heir? 80% seems much.
That being said are you his only heir? 80% seems much.
I got a brother who's pretty much a bum. Mid 20s, no job, education and no outlook at all. Supported by my parents. My mom works job just so she's got some thing to do and some extra spending money. I'm the only one who's gonna really brining in a solid pay check, hence the 80%.
Now I wouldn't mind putting 80% in if I was the only one(besides my mom), essentially I'll be putting in 80% and getting back 50 because of the bum...
I defiantly will plan to have my pay sent to my own checking account. I feel like the joint will cause more issues if I go along with it rather than just ditching.
I got a brother who's pretty much a bum. Mid 20s, no job, education and no outlook at all. Supported by my parents. My mom works job just so she's got some thing to do and some extra spending money. I'm the only one who's gonna really brining in a solid pay check, hence the 80%.
Now I wouldn't mind putting 80% in if I was the only one(besides my mom), essentially I'll be putting in 80% and getting back 50 because of the bum...
I defiantly will plan to have my pay sent to my own checking account. I feel like the joint will cause more issues if I go along with it rather than just ditching.
This math is off. There could be losses along the way with the real estate scheme
I got a brother who's pretty much a bum. Mid 20s, no job, education and no outlook at all. Supported by my parents. My mom works job just so she's got some thing to do and some extra spending money. I'm the only one who's gonna really brining in a solid pay check, hence the 80%.
DANGER, WILL ROBINSON! All the more reason to keep YOUR money firmly under YOUR control!
And if you can use the Thrift Savings Plan, all the better. From what I've heard, it's fantastic. I'd invest there while I could, and save any real estate purchases for down the road when the TSP may no longer be an option and when you're no longer so mobile. Both house flipping and landlording work best when you live reasonably close to your investment properties.
DANGER, WILL ROBINSON! All the more reason to keep YOUR money firmly under YOUR control!
And if you can use the Thrift Savings Plan, all the better. From what I've heard, it's fantastic. I'd invest there while I could, and save any real estate purchases for down the road when the TSP may no longer be an option and when you're no longer so mobile. Both house flipping and landlording work best when you live reasonably close to your investment properties.
My dad handles a lot of maintenance on his properties since he's got free time. Buying investment properties and maintaining them shouldn't be an issue since he can handle them. The fact that I wouldn't have any spending money is what's bugging me.
After all, you make money to spend right?
As much as I want to have my money in my control, I also don't want to be on bad terms with my dad either, like I'm greedy or something. He's put out a handful for me through the years, so it's not like I don't want to let him borrow money. I just want to get my priorities straight first. I mean if I get bit in the a** with payments, he's the only one who can bail me out or atleast take over payments in return for the assets(like a car, or motorcycle etc.).
You need to budget an amount for your own personal spending and expenses, and set aside 6 months of expenses in an emergency fund. If you are in the military you should still create that emergency fund equal to what you would need when you get out and have to pay rent, utilities and expenses. Once you have accomplished that then you can consider investing some of your money, possibly in real estate, but it could be much safer and profitable in something like this. https://www.bogleheads.org/forum/vie...p?f=10&t=88005
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