1) I'm not sure what you quite mean by take advantage of opportunities. You define your life as crazy the last 2 years, it's not going to get easier with another kid on the way and you want to be ready for more opportunities? I think you need to simplify, not add on more projects/active investments. It seems like most of the opportunities you have taken on have related to real estate and have been ones that found you, not ones that you found. It's not a solid rule, but I tend to find that deals that find you, don't tend up being very good. I don't know if you really have the time to fully evaluate some of these opportunities, so I'd recommend just sitting back a bit and letting the chaos settle. If you have extra money and it seems like you should based on your monthly numbers and income, then put it towards house projects, index funds or college savings.
As for house projects, sure you can do the ones that are necessary now, but defer the ones that aren't absolutely necessary until you have the cash to do them.
2) Yes, without knowing more details, this is dumb. See above comment about deals that show up on your doorstep. I don't care how nice or experienced they are, there's risk involved in this and if they are that successful, why do they need you to take on a share of it? They could be actually nice people and really wanting to do you a favor/give you an opportunity but without all the details, it's a easy no for me. Don't pursue this further unless you have plenty of time to fully vet it and feel totally comfortable in what it's going to generate for you. Basic question that I just can't shake: why do you need to put in $300/month? If the property is successful then shouldn't it be cashflowing positive and not requiring you to put in money each month?
3) Someone more advanced on here can comment on this, but this seems like you are trying to leverage your investments to get more return. No offense, but you are already deep into real estate and I don't think going in deeper is the best right now for you given your life circumstances. Unless you have some other investment type that you want to diversify into, then I think you just leave it in index funds. If you really want to go all in on real estate, then I'd go over to the real estate group and ask about this there.
4) Nothing to contribute other than I think 529 is fine.
5) Nothing obvious. Babysitter is a big chunk but for three kids it doesn't seem terrible and you are going to need some kind of childcare for years to come.
Overall thoughts:
You're in the messy middle of life and lots of things are changing so it's hard to accurately plan for the future at the moment. You have goals which is good, but any plan needs to be flexible. You just went through a slew of real estate transactions and I'm impressed that you've been able to pull out actual monthly costs right now. I'd recommend taking a step back and focusing on family right now and priority house projects. Get a good sense of whether your monthly spend and real estate projects are actually in line with your estimates above and then develop a plan, but be ready to change it as your life evolves. See below for some questions to help guide that plan.
Questions:
1. You mentioned wanting to FIRE, but is the RE side of that an actual desire of yours or is FI the real goal. I ask because a big benefit you have is possible pension. Have you looked into how many years you need to get pension and what the min and max amounts are? 14% of your salary is going into this so what's the payoff and do you think you'll be working long enough to get that? Would your wife still be in the pension program if she gets into the new position?
2. Your wife's future position seems like it could be a big jump up for your family. Is the $200k a realistic value or is that years down the road? It's not critical but it would be good to lock in on what a realistic starting salary is.
3. Is your goal to build up a real estate portfolio to cover all your monthly expenses?
4. Do you feel like your properties are actually making money right now (other then building equity)? I'm not a real estate guy but on a glance, they don't seem like there is much room for maintenance costs, especially on the second one.
5. Going back to your goals at the start of your post, think about what each of these mean and define them clearly.
5a. You want to balance short and long term goals. What are your short and long term goals? You've listed kids future as long term. Anything else? What's in the short term?
5b. Your money is already working for you in your investments so I read additional income as increase salary at jobs or take on more jobs. Is this what you mean? As for real estate, see above to my previous comments, but think about what the purpose of your real estate is.
5c. For kids future, how much do you want to set aside? We talking full college for all of them?
5d. If you want to simplify, then I don't see how taking on more real estate fits in with this. Some properties may be simple and very hands off, others are time consuming. Index funds are pretty darn passive and hard to beat on simplicity.
6. Do you feel like your monthly numbers are accurate? It might be tough to tell with all the real estate transactions, but you should have money left over each month to save or use. It would be good to confirm this so you know your spending budget is in the right ballpark.
@lucenzo11 thank you so much for all the great information & additional questions! I will do my best to respond!
I very much appreciate your suggestion to simplify & focus on family & what we currently have. I fully acknowledge this is something I struggle with as I always feel this pressure to be producing or doing "something" to improve the lives of those I care about. My family is fairly prominent in my community & the community has made it very clear my whole life they expect all kinds of great accomplishments from me! The reminder to simplify & slow down is a great one for me to hear!
In response to your questions:
1) I view RE as a vehicle to help achieve FIRE. A struggle I have since switching to teaching is the lack of opportunity to really boost your income. No bonuses or commissions like I had previously so while we do get a slight raise each year, our earning potential is set in stone. Because of that I started looking into other ways to increase our chances of FIRE & RE seemed like an interesting option. In regards to the pension, we do need to look into this further. My concern is I don't see myself working long enough to fully maximize the pension. I would have to work at least 30yrs to get the majority of the benefits but they recently adjusted it up to 35yrs to fully max out. I will set up a meeting with the pension fund to get more information for myself & my wife.
2) Since posting we have talked more about this & she has talked more to her mentor & peers in the same space to get more info. It sounds like while the $200k is a very realistic goal, it would take a few years to develop the client base to reach this. Starting out the likelihood is more around the $90k range with it being 3-4yrs to get to the $200k mark based on her mentors experience. With my wife's current job as a district instructional coach, she could likely start by training some folks within our district to get some experience & get additional income on the side. She would not qualify for the pension (we don't believe but will clarify)
3) I would like to add a few more RE properties to give us additional streams of income. I haven't figured out how to do this yet or if I want to focus on single family homes or multi family but I would like to get further involved in RE investing if possible.
4) The first rental is definitely making money & we have very little to no maintenance costs (knock on wood) currently. This was our primary home until 2022 & we did all the major things (new roof, HVAC, water heater, etc) so we don't except any major expenses with that house. The current tenant is also amazing, takes great care of the property, & wants to stay long term. The 2nd rental is a bit tricky as there isn't much room right now in terms of extra income. However, one of the reasons I was intrigued with the house is the location as I had heard rumors of a potential development happening in the area that would really boost the property values. The great news is a month ago the plans were revealed (& work has already started) on a $81 million renovation project for the area that should not only increase the property value but allow me to increase rent.
5a) This is a great question & something we ask ourselves often! Until recently, my wife has always viewed herself as someone who would work in education until the day she died as she loves her job! Once we started having kids this has started to change as she loves being a mom & wishes she could be home more often. I have always had tons of different interests & honestly don't know what I want to do with my life! The career I thought I wanted & was super passionate about is a career that is awful for families so I didn't pursue it (confident I made the right choice with it) but in the 3 careers I have had (sales, finance, teaching/coaching) I have been successful in all of them, enjoy parts of all of them, but still feel like something is missing! This makes it hard for me to determine short term goals. Long term I think we both want the freedom & simplicity to have options to not have to rely on paycheck to live our lives & be able to spend time with those we love.
5b) I think sometimes I feel stuck with our money situation since there isn't really any way for us to increase our $$$ without taking on other jobs or just being super strict about saving. Not having the opportunity for bonuses/commissions often makes it feel like we don't have much wiggle room for things financially because we can't just come up with a big chunk of money from a great month of sales or something like that. Then when I see the money in Vanguard, I sometimes wonder if we just took out $50k (randomly chosen amount for this) & used that for either home projects, or RE investing, or paying down mortgages on higher interest rate properties, would that give us more impact right now financially vs. what that $50k will do long term. I do love the long term view of VTSAX but also wish we had more accessible money to do things now
5c) I am not thinking covering all of college. Really it is more about wanting to have some money for them to help set them up for success whether it is for college or just some money to help them out starting their lives. One thing my parents did that I thought was great was they had a set amount of $ set aside for my each of siblings for college. They shared what this number was & said if we picked a school that cost more, we would be responsible for the rest. If we had scholarships then we could get that money to help with other things (buying a car, savings, etc). So don't have a set number in mind but figured getting a start now would allow the money to grow over time. Wasn't sure if we should go the 529 route which is strictly for educational or if a Roth would be best for the kids but I heard we can't do that for kids until they have income.
5d) I understand this point. I would love to get to a point where we have a property manager if we continue on the RE investing path so then it is more passive. My old neighbor is a very successful RE investor & he has a property manager handle everything
6) I would say the numbers are close to being accurate but I also feel like the last yr or so have included so many changes that we do need to tighten up the numbers & really have a better idea/plan.
Hopefully this helps & thank you again for taking the time to share your thoughts. Have a great day!
