Mindy:I think that Erik is killing it on the interest rates and I missed the 2. I would not, but again, I am comfortable with moderate debt and this kind of debt, mortgage debt. One thing that my husband and I came to an agreement on is, I used to be, I want to be completely debt free. He said, I would rather take the money and invest it. So you are crushing it on the interest rate, but again, paying off your debt and being completely debt free is a mindset that some people are way more comfortable with. That is something that you and your wife should discuss. I guess it really is a mindset more than really looking at it from afar. And then continuing to focus on the accumulation of assets from the context of a strong liquidity payday loans advertised on tv position. Scott:And then having that capitalized rental business, you have some debt, but your income and your cash positions in that case will be pretty conservative to me and allow you to continue to be aggressive on loan search the investing front rather than prepaying all of the debt. Mindy:I agree with Scott, with taking the rental out of your personal expenses. You had a question about the HELOC since it is related solely to the rental property, is that correct? But you took the money out of your primary residence and put it into the rental.
So the 100 approval payday loans rental owes you money, not you owe that money back. Is that a general going into a slush fund thing or is that a specific bill?
This was something that my wife and I sat down, because we had time during the pandemic to start to think about other ways of having some income. We wanted to try to find something that was a little on the safer side, because we were both working full time. I think for us having that cash flow of 400 or so a month was something we could feel good about while we learned the ropes. I like that this is the roof and the exterior maintenance is already covered for you. The best bad credit small loans way to learn how to screen tenants is to actually screen tenants and then realize I made a mistake or you could read the BiggerPockets tenants screening guide. Scott:Given that context, I would not be prepaying your home mortgage or need to borrow money fast your rental mortgage or your car payment. I really do paying off the HELOC faster than the rent mortgage or the primary mortgage. And loan search so the focus I think should really be on how do I accumulate cash at a faster and faster rate, which brings us back to your income and expenses. That tells me that the leverage point for you here is really going to be on the expense side. There may be other, you said you have stipend things and stuff.
Your 15 year refinance is going to, again, compound this problem in the short run.
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Because, well, at that interest rate, if you could pull that money out and put it towards the HELOC and payoff the HELOC at this 1. You call up your lender and you say, I want to back out of this mortgage and I want to take more money out at a higher interest rate. The single biggest part of all of your spending is going towards this mortgage payment right now.
How much is your house worth and how much is the mortgage amount? Mindy:I would reach out to them and ask them what it takes to pull some money out. Try to compare them with no points are the same amount of points prepaid with that stuff. More debt is never better than less debt, but the terms of that debt really matter a lot. Mindy:Another thing to think about, you can repay your 30 year loan in 15 years.
Once you have saved up a ton of money, you can start cranking it out and still end up paying your mortgage off in 15 years or 20 years. I would definitely not refinance at a 15 year and then begin prepaying that additionally, before prepaying the HELOC. I would either continue with your 15 year mortgage, but attempt to pull some money out. Or I would try to get that 30 year mortgage and pull some money out. It definitely should refinance if you can get a lower interest rate by a substantial amount. I really appreciate you taking a look at the numbers loan search and really crushing it. We do go as a family to, not any particular places, very extravagant, but it does cost money to have four of us, or three of us and the two year old. The rest of that, believe it or not is a lot of groceries. Have you been with the same company for a long time? Like Scott said, re-categorizing your expenses into rental property and personal. Do you have opportunity to contribute to a 457 plan? My sister-in-law just asked me, this was so awesome.
Listen to the millionaire educator episode of our show as well. I would take care of that problem with the recapitalization. Mindy:I would to see you rewrite out your expenses and your debts based on the way that Scott and I categorize them. Your retirement contributions are not an expense because they come out before your check. And now we write checks to these things on a monthly basis. I love the notebook because it is in your face right there. If you said to me, Scott, I want to retire in 15 years with my pension and have no debt whatsoever. Erik:That makes a lot of sense, but we definitely need to sit down and discuss that. Scott:The reason I do this is because I know this is your life and a lot of things. Again, that comes down to you owe your lender nothing.
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More contributions to 403(b) or that next rental property investment.
Just got a couple of big decisions to make around the debt management and then button up on the expenses. I think that a lot of people are going to get some value out of this, to look at their own situation and say, where can I make some tweaks that will really have a long term benefit for me? I appreciate you sharing your finances with us today. I just appreciate how real, how wonderful, how authentic all of this is. And those things that he could be doing better would be different if, again, if his goal was to sit there at the time when he was eligible to fully fund his pension with no debt, just complete freedom of the no debts and an asset base and a pension, all that stuff. Listeners, we recorded the episode you just finished listening to way back on December 9th. We are recording this followup episode on February 2nd, almost two months after we spoke with Erik.
Well, we were so excited, my wife and I to have our of clarity, looking at our ideas and where we want it to be.
That does give us a little bit more flexibility as far as what we do with our money going forward.
I wish I could find it again, but they were talking about fire versus fund, which is financial understanding and new directions. Anyway, after we were able to chat, we were in the middle of our refinance on our primary residence.
I emailed or contacted our loan officer pretty much the next day after discussing it with my wife and we were both on the same page. We ended up doing a cash out refinance instead of a 15 year. We were actually able to cash out, pay off the HELOC and start capitalizing our real estate business right off the bat. Now, when we did talk to you back in December, you had some ridiculous low interest rate, was at 1. Did we have any other debts that we were trying to pay off? I think you have the primary residence that you were refinancing. You have the HELOC on the primary to pay for this rental and now the rental is just by itself.
We figured that there were better things to do with that cash then pay it off.
They had a great guest on who was talking about 403(b)s and the wide world of strange 403(b) dealings. We had one of those very high price 403(b)s, actually both of us through our school districts.
The 403(b)s at different jobs, when I look at the different options in my district, I have maybe seven or eight different providers. Both my wife and I went with the first one who came in and said, hey, would you to open a 403(b)? But I looked down the list for a low cost provider with my district, luckily we have one. And so after filing the paperwork back and forth and back and forth for about, well, really, since we were on before, I have finally been able to get that money moved without penalty, without taxes, over to a different provider.
You want to make sure that they make the check out to the new pretax account name, whatever that may be. You need Mindy Jensen, the 401(k) to have this money. I just want to throw that out there really quickly.
With a 403(b), it sounds like you have more options. But the core three, the big ones, the big three, the housing and the car and the transportation and food.
We do go out as a family once a week to have a dinner out. So we just, instead of going out every week there, we would go maybe once or twice a month.
It was more exciting for the girls than sitting there at a stuffy restaurant. We would go there just for a frosty and the kids, you get the little tiny one and the kids are super excited about it, but we go around and drive around and look at all the Christmas tree lights.
We go and we drive past them and they love looking at them. It honestly feels very similar to how we felt before. Mindy:Everybody I talked loan search to who does the, I cut everything out and then they add a couple of things back in. As far as the paying down principal early versus investing it, looking at the numbers, it just makes sense. Help us reach new listeners on iTunes by leaving us a rating and review! Mint Mobile were the first company to sell premium wireless service online-only and, now, Mint Mobile is introducing their unlimited data plan for JUST 30 bucks a month. Use your own phone with any Mint Mobile plan and keep your same phone number along with all your existing contacts.
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