Author Topic: Man with a plan .........................seeks advice  (Read 4893 times)

andy.LtD

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Man with a plan .........................seeks advice
« on: January 25, 2015, 06:44:59 AM »
Brief history my wife and I are 45

Self employed bought a nice property 25 years ago that stretched me to the hilt, however it will pay off now.
Had a serious accidentin 2008 that left me unable to work as before so....

Situation is ZERO savings, no insurance payout or State benefits

However we have been forced into a mustache lifestyle we live on her salary of $30k a year  so I had a flash of inspiration.

I did think of the idea about 4 years ago but decided that any plan should be done when my physical and mental health were back at 100% , not quite there but


My plan:

SELL THE HOUSE= $750K TOTAL PROFIT WE WILL WALK WITH

BUY OR RENT A SMALLER PROPERTY

MAYBE $150-200K

buy 5 rentals would generate $3000 a month minus expenses

Use the rest to buy properties to rent out ................or buy fixer up houses just tidy them up maybe 1 or 2 a year in a semi retired idea until I am confident how our finances will work out. My wife says she wants to carry on working until she sees a good income/expenditure in the positive.

what would you do??

andy.LtD

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Re: Man with a plan .........................seeks advice
« Reply #1 on: January 25, 2015, 06:57:41 AM »
One school of thought is with that amount of capital, we could live easily for 25+ years on the little interest if frugal

caliq

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Re: Man with a plan .........................seeks advice
« Reply #2 on: January 25, 2015, 07:14:08 AM »
I'm not the most experienced mustachian, but I would suggest that you not put all your eggs in one basket, especially if you've never been a landlord before.  Possibly buy your primary home, buy one or two rental properties to see how you handle it, and invest the rest?

Also, if you really have legitimately been disabled for seven years, you should be entitled to SSDI.  You paid into that system, the same as you pay into regular Social Security.  I don't know how much time you've put in to pursuing that but it might be worth it.

ambimammular

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Re: Man with a plan .........................seeks advice
« Reply #3 on: January 25, 2015, 07:19:04 AM »
Spend sometime on the real estate and landlording part of the site and see if this plan still appeals to you.

If you do decide to go for it, I'd go slowly. Purchase one rental.
I like your wife's caution and your excitement. Just re-evaluate and see how you feel about your plan one year in. If you're not disillusioned, and she's more sold on the idea, snatch up another.

You've got enough of a nest egg that there's no reason to rush in only to find that you don't have the temperament for it, or that you'd rather be in another part of the country, or your health stops you from fixing up old places.

Otherwise, I love it. Good Luck!

SaintM

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Re: Man with a plan .........................seeks advice
« Reply #4 on: January 25, 2015, 08:57:27 AM »
As much as I like renting properties for income, I agree with the recommendations to diversify across and within asset classes: real estate, paper assets (stocks/bonds/funds), and perhaps a small business franchise.

andy.LtD

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Re: Man with a plan .........................seeks advice
« Reply #5 on: January 25, 2015, 09:20:33 AM »
Investing (shares,bond) kind of worries me. I had an accident in 1983 I got a great settlement but it collapsed in the big stock market crash. I lost $35k overnight so I waited until the fund had revived and then bought this property. Kind of old school but I like to see my money. I've owned a rental property as well for this period so know the pitfalls, but am using the site for other ideas/problems. The government managed to put that many barriers in my way for disabled money I had to give up.My mental health was suffering and close to cracking up . SO I have had a year and a half of Diy,decorating etc to get the house ready. 
Looking forward now to a great 2015

NICE!

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Re: Man with a plan .........................seeks advice
« Reply #6 on: January 25, 2015, 09:58:46 AM »
I don't know how the taxes would play out, but selling that $750k house to buy the much smaller/cheaper place and then invest the rest sounds wisest to me. If you're not capable of doing much you'll need to contract out a lot of repairs & property management, which will make it much less profitable.

If your wife makes $30k and plans to continue doing so for awhile, you can keep that stash growing for even more security. However, I'd say that if you're living on less than $30k (presumably, since taxes eat a part of that), you could absolutely retire on that stash. You'd have to be prudent, but that's right at the 4% safe withdrawal rate. Your wife could even substitute teach if she wants to stay current, work a bit, and have a foot in the door...all the while staying flexible for whatever ya'll want to do after FIRE.

andy.LtD

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Re: Man with a plan .........................seeks advice
« Reply #7 on: January 25, 2015, 02:38:54 PM »
Thanks so far, no I'm back to 90%. But decided working on motors in cold environment is too difficult now. I'm capable of most building, plumbing work but not electrical so think the property ideas seems to make the most sense. So basically need to commit to a way to FIRE

marty998

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Re: Man with a plan .........................seeks advice
« Reply #8 on: January 25, 2015, 02:57:43 PM »

what would you do??


Don't shout

My eyes. They burn. owwww.

Tell us about this accident of yours. Not being insincere, but what about it prevents you from working? Actually, it looks like you've had 2, one in 1983 and another in 2008....

If you really can't work (even a desk job for 1 day a week) then go for the plan you outlined. You need income producing assets. No use living in a nice house if you can't pay the bills or pay for food.

My advice? Split the proceeds half to Property and half to high yielding dividend shares

andy.LtD

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Re: Man with a plan .........................seeks advice
« Reply #9 on: January 25, 2015, 03:08:54 PM »
Ok, I had my arm chopped off through an accident. Then I was 16 I became self employed as motor mechanic/restorer then 25 years later I fell from a lorry and snapped tendons in my other arm. This proved challenging and very long recovery. During this period (my age category I suppose) a few friends and colleagues died and made me question "meaning of life " I  can work but intend a restructure to "live the dream " thus the question?

thedayisbrave

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Re: Man with a plan .........................seeks advice
« Reply #10 on: January 25, 2015, 03:22:53 PM »
I would do what some have outlined here.  Sell the house and use the money to downsize and buy a rental property or two.  Not five.  Invest the rest in index funds (sounds like you may be a little gun shy from last time, so these are "safer") and live on your wife's salary as much as possible, which it seems like you're already doing.  Lower housing costs (from a smaller house) should help too.  Work if you can, but this should allow your stash to grow for the next 20 years.  Reinvest your rental property income either back into rental properties or funnel them toward your stocks - but don't take them to live on.

You don't mention what area you're in... some are better than others for rental properties.  That may play into your decision on how much to allocate to which bucket (% to real property/real estate, % to stocks/bonds).

Good luck!

caliq

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Re: Man with a plan .........................seeks advice
« Reply #11 on: January 25, 2015, 04:41:43 PM »

what would you do??
Tell us about this accident of yours. Not being insincere, but what about it prevents you from working? Actually, it looks like you've had 2, one in 1983 and another in 2008....

If you really can't work (even a desk job for 1 day a week) then go for the plan you outlined.

Dude.  That is super rude and judgmental.  You can give the guy advice without implying he's mooching off the system. 

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Re: Man with a plan .........................seeks advice
« Reply #12 on: January 25, 2015, 10:40:11 PM »
Dude.  That is super rude and judgmental.  You can give the guy advice without implying he's mooching off the system.

Maybe I'm blind but I didn't read any judgement in the question. I saw curiousity. A lot of people say they "can't" here and elsewhere, until later we find out that it isn't exactly true. It sounds like it is true in this case, although I know nothing about employment for persons with disabilities.

marty998

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Re: Man with a plan .........................seeks advice
« Reply #13 on: January 26, 2015, 01:23:37 AM »
No judgement at all. It was curiosity. Accidents can mean anything and in absence of knowing what it was we're all giving what could be termed "unlicensed" advice.

There's a massive difference in scale between say a broken toe and being a quadriplegic. And even people without the use of all limbs can still work. We live in a world that is increasingly reliant on intellect rather than physical capabilities, and I see this as a positive for people with disabilities who would otherwise be excluded from working/earning.

In this case it seems like our protagonist has had 2 rather unfortunate incidents in his life. It's so easy to just give up in these situations. Mindset is 3/4 the battle and I commend his attitude for wanting to better his situation.


andy.LtD

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Re: Man with a plan .........................seeks advice
« Reply #14 on: January 26, 2015, 03:29:33 AM »
No problem from this end. I met a guy who bought a small business near recently. After greetings we exchanged he told me he retired at 45. Worked like mad 6  days a week, 12 -14 hours a day. It always was his plan, save hard work hard until you don't  to.
I've just decided to enjoy remaining 20-25 years of high quality life till I slow down
If folks want to work till the end, good luck to them.

It's just as folks are checking out(of this world) not one has said to me " I wish I'd worked longer , bought this car,house etc, 99% say time you cannot buy it.

We all know the rules
NO-ONE GETS OUT ALIVE

andy.LtD

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Re: Man with a plan .........................seeks advice
« Reply #15 on: January 26, 2015, 03:32:54 AM »
PLAN

andy.LtD

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Re: Man with a plan .........................seeks advice
« Reply #16 on: January 27, 2015, 06:26:12 AM »
His great advice was prepare and plan for the future you can create!!!!!!!

not planning means it will not happen?