Author Topic: Reader Case Study: Mountain Resort town home ownership and lifestyle  (Read 2070 times)

mountain stubble

  • 5 O'Clock Shadow
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  • Posts: 2
Greetings!

Well, here goes my first post.  I can't wait for the face punches and critique, good thing my face is already pretty rough around the edges.  I found MMM's blog about 6 months ago, read every article and am growing the 'stach towards FI.  Boy do I want to do what I want when I want.  I have a good start, but need some advice to fine tune the plan.

Background;  Early 30's, single, no kids, and love where I live.  I was a total dirtbag in my 20's and lived on almost nothing and made nothing.  It is proving to be an invaluable skill, I can tighten up the ship and live in my truck if need be.  Started this job 3.5 years ago and I am here.  Outdoor activities are very important to me and the higher cost of living seems to be worth it, but I'm not completely sure after digging through the blog.  The BIG expense I have is my house, but I live with a couple of people so that helps.

The numbers/mo;

Income (pre tax): $12730
Job: $ 9470
Rental 1: $725
Rental 2: $1285
Primary residence: $1250


Expenses: $7940
Income tax: $2100
Rental 1: $54k on mortgage 30 yr @ 4.25% plus maint/hoa = $600
Rental 2: $88k on mortgage 30 yr @ 5.25% plus maint = $ 735
Primary residence: $387k on mortgage 15 yr @ 3.65% plus bills/maint = $3615
Vehicle ins/gas/maint: $150
Cell phone: $27 (yeah Republic!!!)
Sailboat: $80 Punch!! (side note, shared 50/50 with someone to save on money and a huge passion of mine)
Food: $150
Travel to work: $500 (I have to fly many, many, many miles to get there, and I will not live where I work.  When the job goes away, so does the expense.  I'll try to block this punch :-)

Assets:
Rental 1: $90,000
Rental 2: $130,000
Primary residence (3/2/2 nothing special): $500,000
Truck (20 MPG): $10,000 (no loan and another PUNCH!!  I do have a scooter that gets 90 MPG)
Camper for my truck: $6,000 (going on craigslist next week, wanna buy it?)
401k: $55,000 (I am maxing this out and being matched $3000/yr by employer)
Roth IRA: $17,000 (I have left this alone for a number of years, but am maxing this year and every year forward until FI)
Other investments: $24,000

I feel that I am doing alright and I'm trying to come up with a way I can leave this job in 5 years.  My crawl space in my house is huge and I am considering building it out to a 1 bedroom/1 bath in law unit and moving in there and renting the whole house out (should be able to get $2000/mo for the house).  Then when/if I have a family I can take the house and still have income from the in law unit.  I'm thinking the cost will be around $25K to build(permits in this area are ridiculous)  Is this a good idea?

So, where can I improve?  Should I put more money in the stock market, pay down the mortgages, or buy more houses, or...? I'm thinking the mortgages for now, as the stock market seems a bit overpriced at the moment.  Also, the rentals are 40 miles away and I don't really want to deal with another one, so buying more RE is out at the moment.  My goal is to have the 2 rentals free and clear in 5-7 years. How can I reduce my tax burden from my job? 

Well, that's the story, and I'm sticking to it. Maybe MMM will dish a left hook himself!  Thanks for the help and I hope I can give out some punches to those that are deserving someday. 

Mountain Stubble


Fuzz

  • Bristles
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Re: Reader Case Study: Mountain Resort town home ownership and lifestyle
« Reply #1 on: September 05, 2014, 01:01:16 PM »
How did you go from dirtbag to 100K/yr job? That's impressive.

If you're flying for work, it sounds like your not always home. What about a roommate? Also, there are destination mountain towns (Jackson, WY; Aspen, CO) and cheap mountain towns (Driggs, ID). You would be at FI in a cheap mountain town pretty quick. Is remaining in a destination mountain town important to you? No judgment if it is, there are lots of pretty towns with great recreation that I wouldn't want to live in (Dillon, MT).  On the other hand, Lander or Whitefish could be nice middle ground.

As far as your rentals, have you looked outside your immediate area? Arebelspy has some neat posts on how he lives in Vegas but bought in the Midwest.

mountain stubble

  • 5 O'Clock Shadow
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  • Posts: 2
Re: Reader Case Study: Mountain Resort town home ownership and lifestyle
« Reply #2 on: September 05, 2014, 02:40:15 PM »
How did you go from dirtbag to 100K/yr job? That's impressive.

If you're flying for work, it sounds like your not always home. What about a roommate? Also, there are destination mountain towns (Jackson, WY; Aspen, CO) and cheap mountain towns (Driggs, ID). You would be at FI in a cheap mountain town pretty quick. Is remaining in a destination mountain town important to you? No judgment if it is, there are lots of pretty towns with great recreation that I wouldn't want to live in (Dillon, MT).  On the other hand, Lander or Whitefish could be nice middle ground.


0-100k = oil and gas

I have 2 roommates currently and the build out of the basement would produce another $800/mo of income if I lived in the basement.

I am definitely considering moving to a cheaper mountain town, but my roots have been grown here for the last 11 years, and I love it so much.  I am having quite the dilemma between where I live and not having to work if I don't want to.