Thanks for the replies - even Walt's... albeit a little gruff and snarky. They all give me pause for consideration.
Here's an example of my most recent house that I purchased in June 2020 (which is where our normal RE acquisition funds went):
Contract Price $180k
20% DP: $36k
Interest Rate 3.5%
Closing costs $9k
Prop Taxes: $3.7k/yr
Insurance (2% deductible): $1k/yr
Assumed maintenance: $500/yr
Renovations: $19k
ARV: $200k-ish
Equity:$56k
Rent: $1595+$35/mo pet rent = $1630
I think that covers everything. I know folks will say I'm underestimating maintenance costs, and that is possible, but part of the $20k rehab was a new HVAC unit and I will replace the roof myself in a year or two... so yes there may be maintenance issues, but the average costs of my other 3 properties were about $500/year, so I'm just going with that.
Although I didn't get expect to need to explain my total financial situation just to get some advice on a financial decision, I'm happy to give some more details.
I'm technically FI. My wife and I could both stop working and we could figure a way out to live without needing jobs. However...
A good portion of our assets are in tax deferred accounts. I'm in the process of setting up a Roth Conversion Ladder, but that will take a long time to get fully converted.
Also, we have been talking about having a child. This is a relatively new development. Our first 7 years of marriage this was not really on the table, but over the last couple years, it's been seeming more like something we are ready for/interested in. This adds some murkiness to our future financial costs, and if I can add to our buffer, I will.
Also, as some others may have experienced, once you quit working full-time, you are available to all sorts of new things. Some of those new things are free and some cost money that you hadn't originally planned on. So rather than being constrained OR going back to work full-time, I look into ways to grow wealth outside of the W-2 world... to me that seems like real estate.
In regards to the jobs that both my wife and I have/had... we recently moved to a new town/state and both thought it would be a good idea to get jobs for a couple reasons... 1) to meet people and get plugged into the community and 2) so that we could have W-2 income to get a loan on our personal residence. She got a full-time job that she enjoys, and I got two part-time jobs, one at a small engineering office and another at the local bike shop. Both of my jobs underpaid me compared to what I was making before we moved, but the AMOUNT of income was less important to me than the bank seeing that we had regular jobs. Two part-time jobs felt like too much time management and so I quit one of them at the beginning of this year. The second job, the one i got laid off from, was proceeded by a conversation with the firms owner that if work got scarce, I understood him keeping his full-time employees busy by taking my hourly work from me and giving it to them... it took 4 months of covid to get to that point, but it finally happened, no big deal. I've got a house that has plenty of projects to keep me busy (which I enjoy).
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And I disagree about landlords not being able to create good in the world. When I was in college, one of the people I learned the most from during those 5 years was my landlord. He turned out to be a great person, and offered some life lessons that I wouldn't have learned anywhere else.
Also, do you know what kind of housing crisis would exist if there were no landlords? We meet a need of society.
We have built relationships with tenants and although we are strict with our rules, and who we let live in our properties, almost all tenants that have ever left have always thanked us for providing the house to them and being prompt to make repairs when necessary. You can do good in this world and make money at the same time.
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