Author Topic: Cash out small mutual fund to invest in real estate?  (Read 722 times)

kayne

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Cash out small mutual fund to invest in real estate?
« on: February 20, 2017, 03:21:20 PM »
DH and I are considering buying a small sfh (about $90-100k) or duplex ($180-200k)  in a college town 7 hours away where his mother currently rents on a fixed income. The duplexes cash flow better.  Due to 25 down requirement, cash at closing for a duplex would be up to $55k and we have about $40k cash on hand. We have $15k in an old troweprice blue chip growth fund we can cash out.  Would you do it with the stock market so high?

Early 40s, two kids, income $230k, $160k of that is very secure, the rest secure.  We have at least $400k equity in our primary residence in a vhcol area, piti $2500, student loans of $400 a month, and $7k left in a car loan at 1.9 percent.  Currently max out one 401k (other job has terrible 403b) and two roths.  The $230k is recent -- $25k raise as of Jan 1 -- but we have little income growth potential in our current positions.

waltworks

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Re: Cash out small mutual fund to invest in real estate?
« Reply #1 on: February 20, 2017, 04:08:27 PM »
Can you rewrite this so it makes more sense?

-Are you buying a place to rent to the MIL? If so, will that cause problems if the house has issues or the finances aren't working out well on your end or hers?
-Do you have any previous landlording experience?
-Do you want to own a bunch of other rentals, or just this one?
-What do you mean "cash flow"? What would your rents and costs be?
-Why would you need to take money from a stock fund if you only need another $15k? For you guys that's what, a month's salary after taxes?
-You've listed some random expenses, and your income, but not an actual money in/money out sort of case study, so we can't really provide much advice on that aspect (if you were even asking?)

I mean, you make a f-ton of money. If you don't spend like drunken sailors you should be FI in a very short period of time. It is hard to imagine a single home/duplex worth $100k making much/any difference for your long term financial goals unless you're trying to scale this up down the road. On the other hand if you just want to do your MIL a favor, making her pay you rent might or might not be a good idea.

Start from the beginning and ask some specific questions.

_W