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Location: Formerly Pleasanton Ca, now in Marietta Ga
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Quote:
Originally Posted by mathjak107
real estate can be a job . that is what many do for a living whether as owners or brokers .
It can be, but having a property manager makes all the difference. Two are traveling all over Asia for months at a time. I don't think that would be possible if they had to do real estate as a job.
Here's another attempt at a summary. For many of us, childhood and teenage years were rigidly determined - if not by our parents, then by ourselves. Study intently, earn good grades, proceed to the next level. One steps through the hierarchy of formal education (high school, college, grad school) and then obtains a remunerative career-oriented job in an office. "Career" means several things. It means an intellectual challenge, the making of archival contributions, the garnering of a professional reputation; leaving a mark... and getting pecuniarily rewarded for it. But then, after a while, one feels plateaued and enervated. It's not challenging anymore. It's not fun anymore. One feels played out, flat, hollow. Granted, this probably ought not to happen at MMM's age-of-retirement, at 30 or so. But it can certainly happen at 45 or 50. Then what? Then one makes a radical break.
This radical break need not mean cessation of labor in exchange for pay. It could be a second career, where perhaps one actually works for longer hours per week, in more strenuous conditions, than in one's former employment. But it is indeed "retirement", in the sense of a clean break of an erstwhile rigid pattern. One retires not from the workforce, but from the implacable rigidity that was inculcated in one, started at age 10.
Boy, is this right on.
In my case, I never really gave a thought to retirement....it was just be as successful as I could at every level. Valedictorian, ivy undergrad, Wall st career, followed by jobs at prominent tech companies. In school, success was measured by GPA. In the career, it was measured by salary. Success, not money per se, was the objective.
And then it hit me...Wtf am I doing? I hate this treadmill lifestyle. I have nice cars, house, but I really could care less. I looked at my liquid net worth, realized it was more money than I’d ever dreamed of, and walked away at 42. Haven’t had a penny’s worth of income other than divs/interest/cap gains in 13 years.
I had done no retirement planning at all, but luckily I’ve never really been a consumer. I was smart enough to realize though, that I’d have to pay much closer attention to all things financial going forward. And I have. Luckily, I haven’t really had to sacrifice much, and the bean counter in me actually enjoys being much more financially aware.
I don’t consider myself anything like mr money mustache.
It can be, but having a property manager makes all the difference. Two are traveling all over Asia for months at a time. I don't think that would be possible if they had to do real estate as a job.
We have always used douglas elliman for mgmt . But it can be costly for good mgmt and to be kept out of the loop from the daily hassles.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,345 posts, read 8,557,056 times
Reputation: 16674
Quote:
Originally Posted by mathjak107
We have always used douglas elliman for mgmt . But it can be costly for good mgmt and to be kept out of the loop from the daily hassles.
I pay 9% of my gross rents and with my next purchase it should drop to 6%.
A small price to pay that was factored in at the beginning to have the freedom.
I know 3 people that retired in their 30s investing in rental properties. All were single people with average jobs
Can you say more about :
1) what their pay or salaries were
2) after they bought their first home -- how they paid for their subsequent homes?
(saved money, took equity from the first house to buy the second?)
3) did they get any gifts or inheritances
4) How much were these homes? did the people put in any sweat equity, doing work on the homes themselves?
I'm single, no kids, lived in the DC area, in an apartment and then a home.
I'm just always curious how other singles, buy multiple homes.
I'm not enough of a risk taker I guess. So I don't think it's as easy as some people make it out to be.
I just never felt I had the capital to get a second house.
(and for the last ten years I've made close to six figures, and saved a decent amount. But I also never loved off of 30-40% of my gross just to save more, save more save more, either)
So I just like to hear details of how people did it....
(Also, my definition of retirement means life of leisure, your time is totally your own -- no working for money -- period. No second career, no part- time, no consulting, no 'on call.')
Can you say more about :
1) what their pay or salaries were
2) after they bought their first home -- how they paid for their subsequent homes?
(saved money, took equity from the first house to buy the second?)
3) did they get any gifts or inheritances
4) How much were these homes? did the people put in any sweat equity, doing work on the homes themselves?
I'm single, no kids, lived in the DC area, in an apartment and then a home.
I'm just always curious how other singles, buy multiple homes.
I'm not enough of a risk taker I guess. So I don't think it's as easy as some people make it out to be.
I started in 1985. I was attending college [UC-Fresno] on the GI-bill [I had already served 6-years in the US Navy] and working f/t for Minimum-Wage, when we bought three houses on a single lot in California, for $75,000. We got a 'first-time home-owner' zero-down FHA 30-year loan at 10.5% My family lived in one house and we rented out the other two houses.
Then in 1987 I re-enlisted and we were stationed in Scotland. Where I bought a five-plex [for 30,000 pounds], we lived in one unit and we had four tenants. [Their mortgages are different, we paid the interest, but there was nothing going to the principle. There was a life insurance policy that we paid on that when it matured it would roll-over and pay-off the outstanding mortgage].
Then in 1990 we sold the Scottish property and we were stationed in Ct, we got a Tri-plex for $125,000. That was another 'first-time home-owner' 30-year loan at 10 and a fraction%
In 1993 we were stationed in Wa, where we got a Four-plex property I was underwater for the closing I do not recall the exact amount, our rental income carried the mortgage payments.
In 1997 we went to Italy and we were put into government leased quarters. We sold the Ca and Wa properties and rolled the equity into the Ct property.
I got my pension in 2001, and we returned stateside. We refinanced the Ct property and we used the money to buy our retirement homestead in Maine, with cash [no mortgage].
After 16 years of living on pension, we got an inheritance. We used it to buy a commercial downtown building that we are remodeling into apartments.
Quote:
... I just never felt I had the capital to get a second house. (and for the last ten years I've mad close to six figures)
My highest salary income was about $65,000/year. You have far more salary income than I ever had.
Seems like the way he made his, what, 800k stache, including home equity, was very achievable given he was in tech for the nine short years he was working. I was working in Silicon Valley during the years in question (1997-2005) and can tell you the numbers he talks about as far as income and returns on options,etc, are actually low. But for his young age, maybe not.....
Right place at the right time as far as employable skills are concerned.
Second observation is that he obviously lived well below his means, although not as a pauper, while he was working. He has carpentry skills and thus can maintain a home much cheaper than most of us.
The guy has common sense and obviously an eye toward the future, doesn't have a need to impress or keep up with the Jones. I saw pictures of his home. He did most of the work, and isn't living as a pauper - good for him.
Then I read how he "retired" at 30.
He says his family only spends 25k a year. Not surprising in property tax cheap Colorado.
But I still think he was crazy (at the time....now he's getting rich off the blog). At age 30, not knowing what in hell was going to happen to health care , and with a wife and child......
Maybe he knew his"backup" skills could carry him. But it's disingenuous to claim he was forever retired. He's not.
The short answer (as he has mentioned) is how many other households at his income level are financially independent in their 30s..or even their 40s? Answer: Very few.
According to data from the Federal Reserve, the "Next 9%" (top 10% income earners excluding the top 1%) only save about 12% of their household income, nowhere near enough to retire in their 50s, let alone their 30s.
It depends on how you define "retired". Many people who reach early financial independence go on to do other things...and sometimes they end up making more money when they don't actually need it than when they had to have it. You know...many people, even high income people...operate in desperation mode. They have such a thin margin for error, they don't have any bargaining power at their jobs...to negotiate higher pay, or to try their hand at a side business. When you can afford to lose your job, you can afford to take more risks...and those risks can pay off handsomely.
The website has helped me focus alot and plan. And overall, understanding money in general.
What I am afraid of, is the healthcare. They are sticking their necks out wanting to live on investments if there is no real security regarding healthcare. It surprises me there aren't more over there that consider themselves retired though they still need to work p/t for healthcare.
Because no matter what, I still see me working 20 hrs a week to obtain the indemnity plan which provides a set amount for almost everything + $1000 year towards dental, 50K life insurance, and disability. And I know I am taking a risk not being able to plan on catastrophic insurance via the affordable care act. My guess is repeal is in its future.
Honestly due to that website, I already "feel" retired. You cannot put a price on that peace of mind
A lot of people are moving to places like Costa Rica, Ecuador, and Thailand and paying cash out of pocket for a fraction of the cost of paying for health insurance in the U.S. And they claim to get good health care. Maybe not a solution for everyone, but something to consider.
^^ Did you use equity from the first houses to buy the subsequent ones?
We moved equity around a few times.
The first time that we had to make a down payment was our fourth property [Wa].
Quote:
... Did you save up a new down payment each time, did you ever pay cash?
I had to pay the closing costs each time.
Our retirement home was paid using cash.
Quote:
... Also you got a zero down loan to buy, THREE houses? two of which the loan company knew would be investment rentals?
Are those deals available today?
I think that after 2008 they stopped doing zero-down mortgages.
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