We are considering a complete life change. Before I keep dreaming, I figure I should ask someone much smarter than myself.
My wife and I are both about 35 years old we have 3 kids almost 5,3,2 years old. We currently live in Northern VA 20 miles outside of DC were cost of living is pretty steep.
My wife stays at home with the kids and I run a carpet cleaning business that I started with a friend 10 years ago.
I know the cost of living in costa rica is NOT terribly low, but it is less then where we live now in Northern VA. The climate and lifestyle is what appeals to us. We have been there before and are planning a 1 month trip in January to really scope it out. We would probably rent there at first and either decide to stay long term or move again… maybe even back to the states who knows! I would look at this as the beginning of my semi retirement journey.
I won’t go into the future plans anymore as my main question is… am I in a good enough position to take a risk like this if we decide to?
We have NO Credit card debt, but do a little credit card hacking for extra cash and maybe travel in the near future.
We have NO car loans
No cable TV, we share a netflix with my brother
My business - I own 50% of a carpet cleaning company with a good friend. We have 3 employees who do most of the work… answering phones, scheduling, and the actual cleaning. However, we still work 10-20 hours a week in the busy season and 0-10 hours in the slower season. My take home pay this year will be around 60k, last 2 years were closer to 100k. Total sales the last 3 years were around 400-475k. Assets are probably around 150k with 50k in equipment loan debt.
Ideally my friend would buy me out and I could maybe get 200k-250k for that (really rough guess). Other options would be selling most of my shares, but keeping a small portion and continue doing online marketing for them …. or... Selling part to the one or all employees and part to him etc...
Any ideas on how to structure this would be great! He is a good friend and it has been a great partnership, so I want to be very fair to him. I think a deal like this would increase his income dramatically, but of course he would also have to pick up my slack.
We own 3 homes
My initial plan would be to keep all 3 homes and rent them out for now (2 are already rented self managed). We absolutely love our current home and would be hesitant to sell it until we are sure we are not returning (we back to woods and a stream on are on pipestem, walking distance to Elementary school, great neighbors)
1st Rental
Rent $2,250
PITI $1695
Value $390k
Mortgage Bal $230k
Equity $159k
Cashflow $430/Month (after $170 in Maint Reserve Hoa etc..)
2nd Rental
Rent $1450
PITI $902
Value $240k
Mortgage Bal 120k
Equity $120k
Cashflow $350/Month
3rd Rental (Current Residence)
Rent $2600
PITI $2000
Value $500k
Mortgage Bal 300k
Equity $199k
Cashflow $325/Month
RE Equity $478k
Vanguard Taxable $201k
My Roth IRA $22k
Wifes Roth IRA $22k
WIFES OLD Roth IRA $5k
Wifes 401K $34k
2 Cars $15k
Savings/Cash $10k
Sale of Business 200k?
TOTAL NET WORTH 978K
Potential Income
4% of 284k in stocks = $11,360
200k from sale of business invested in stocks 4% = $8,000
Real Estate Cashflow = $13,260 (does not include debt paydown of $1,400/month… not sure if/how to include this, but I think I am missing something)
Total $32,620
I need to do a little more research, but I estimate our expenses will drop from 60k to 30k as we currently pay $1250/month for health insurance (lowest cost plan w/ highest premium - Health insurance in CR is very cheap), and will find a rental in Costa Rica for around 1k/month vs the 2k we pay now.
I cannot wrap my head around how to account for the $478k in RE equity in terms on income… 4% of equity, cash flow only, etc…
Should I just be basing everything off of the 978k net worth (minus cost to sell RE) *4% Since we may end up selling it all?
I am not opposed to working part time in the future probably on the internet somehow (in fact I am sure I will do something small at least), but not terribly motivated to right now while all 3 kids are not in school, so I do not want to rely on needing a side income.
Thank you all so much for your time, this site has quite literally changed my life!