Live rent free (or low amount of rent) with your parents for a few years!!! .....and save, save, save!
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Live rent free (or low amount of rent) with your parents for a few years!!! .....and save, save, save!
I'll try this one. You do everything I didn't do and should have. Live in the cheapest place you can (if you can stand it, Mom's Place usually has good rents, but a lot of times they expect free labor and the landlady can be a little nosy).Quote:
Originally Posted by Partial
During this time, put the max you can into your 401K and don't buy anything unless you'll have the money to pay for it before the bill comes. Save up an easily liquidated emergency fund of about 3 months salary and keep it as just that--an emergency fund. As your salary increases, remember to add to the fund a little. Once you have that done, start saving so that when you're ready you can buy a house. The goal here is to save enough so that you don't have to pay PMI insurance.
While you are saving for your emergency fund and down payment, You may want to start looking for someone to share it with (as a matter of fact, roommates or buying a duplex is not necessarily out of the question but really I was referring to wife). Then, hopefully, you should be good to go. Ok, guys, what did I miss?
I was in the near exact situation described above 4 years ago to the day (except I had about 10K in credit card debt and I had to move out of WI for my job).Quote:
Originally Posted by MJZiggy
So, I found a cheap place to live - well not cheap in Sconnie standards but I didn't want to pay more than 20% of my disposable income in rent.
I paid off the CC in about a year and, of course, locked in my student loans at the lowest possible rate and pay the min each month. I got into my companies 401k as soon as I could (most make you wait a year or so) and maxed the Roth each year.
You need possessions to live - so I got 'entry level' things - furniture and other household items. I figured I'd have to buy new things if and when I get married anyways. For almost three years, I did without a car (thus saving almost 800/mo in car payments and insurance - offsetting the higher cost of living/rent of being in Cali).
I don't know about the emergency fund savings right out of college. There are just so many options if you find yourself out of steady work (move back home, get a lower paying job, go back to school) that this money could be used for investments first. IMO, the emergency fund is definitely needed if you have a house but not before then.
I had a roomie for a little while but I couldn't stand the guy after 6 months. I've live w/ my girlfriend now - splitting it like 70/30 for rent and utilities.
Partial, you're in a good spot. Get the job you want and don't settle for less. Don't stress too much about money and just find a plan and stick w/ it. I believe you'll live longer and have more fun this way.
I'm strongly considering making my first real estate investment. 2,000 sq foot home on Whitewater Campus that normally is rented out to students for $1200 per month. From what I could pick it up as a FSBO for around 120G and I'm pretty sure it's worth more. The owner just wants to get rid of it after having two wrestlers do serious damage to the place; he's got er looking good again but wants out.
Any landlord's in here ? Anybody want to share good or nightmare experiences ? Or Biases ?
The scary part is that location and house wise it's the ultimate party house everybody would dream of renting in college.
My bias would be to try to rent to chicks; right or wrong it's my view they'd take care of the property better. Stict lease...etc.
Thoughts to share from experience ?
Maybe Retailguy would talk me out of this as a bad idea ?
Cheers,
B
Only rent to girls, definitely will work out better for you in the long run. Interview the group too, before you lease.
I believe it was Motley Fools said a few years ago that that's how you should always house your children for college. You buy the house before they go in, rent it to your kid and a bunch of their friends and your student housing is paid for. You're just doing it a little before you actually need it. 1200 a month on a 120K investment doesnt' sound too bad to me. If possible, try to rent to adults returning to school or students paying their own way. They don't have time for parties and if they're older, don't necessarily mix much with the younger students.
yes, look for high GPA females with time consuming majors. I think that is the best way to go. That's a steal a friggin' steal at 120k.
Man, I have been tring to catch up with this thread and read it all, but so far really great advice.
so, i've been running the idea of opening my own business in my mind, does anyone have any tips or books on how to form a solid business plan? I would much rather work for myself then anyone else!!
Problem is, I don't know what there is a huge need in in the milwaukee area!!
Try the Small Business Administration. They have classes, etc. on what to do to get started and if it's the right choice for you.
Bretsky---
If you become a landlord, be very careful to avoid an appearance of bias in renting the place out. If you express a preference in terms of gender, race, religion, family status, disability, etc. you could be opening yourself up to a discrimination lawsuit.
He'll be alright as long as he doesn't make an non-politically correct statements. I think its retarded that a renter has to worry about a lawsuit, they should be able to give their property to whomever they feel comfortable with. Stupid, stupid supposedly progressive but really just a pain in the ass laws.Quote:
Originally Posted by the_idle_threat
I've got experience. PM me if you want some details.Quote:
Originally Posted by Partial
I agree that these laws can be a pain in the ass, but I wouldn't be so quick to dismiss their reach ...Quote:
Originally Posted by Partial
Jancik v. Dept of Housing and Urban Development was decided the 7th Circuit Court of Appeals in 1995. Wisconsin is part of the 7th circuit, so this ruling is binding precedent in Wisconsin with regard to the Fair Housing Act (FHA).
In this case, an apartment owner in Illinois got nailed to the wall to the tune of over $55,000 in damages, fines and opponent's attorney fees. This does not include his own attorney's fees. His indiscretion? He ran a newspaper ad that contained the phrase "mature person preferred," which led a local watchdog group to set him up with two "test" renters to see if he would discriminate against them. He asked several very politically incorrect questions which touched upon race and family status, and the watchdog group filed the complaint. Aside from a $10,000 civil penalty, the remainder of the damage award went to the watchdog group to pay "damages" and attorney fees.
The legal reasoning in the case held that an advertisement alone violates the FHA even if the offending statement does not "jump out at the reader," and that "the statute is violated by 'any ad that would discourage an ordinary reader of a partiucular [protected group] from answering it.'"
Protected groups under the Act include "race, color, religion, sex, handicap, familial status, or national origin." So he was guilty just for the ad, separately and in addition to his inappropriate questions in the interviews.
So my point is: if you are going to be a landlord, be very careful. Jancik's verbal indiscretions were fairly substantial, but I think the ad was pretty mild. What landlord wants to rent to "immature people?" The situation you guys were describing above (where a gender preference was stated) could be cause for trouble. And as seen in Jancik, you don't even have to go so far as to deny housing to an actual bonafide applicant to be liable. Your newspaper ad could be cause enough, and/or a watchdog group could "test" you and earn a big payday in the process.
This above is not legal advice, by the way, even if I were in a position to give it. :mrgreen:
"They don't have time for parties and if they're older, don't necessarily mix much with the younger students." MJZiggy
Uhh ? Dam right College students find time to party. Big Time Ziggy.
Yes B. Rent out to 'the Ladies' as young men or alot of them - don't know how to wipe their arse. That is 'a fact' I discovered - living with about 55 people in three year's to get my degree.
Young people are a blast of fun though. I have many great memories of those I met at University. :mrgreen:
Nah, I wouldn't talk you out of it as a bad idea (it's not), but you better make sure that you're properly capitalized before you leap. I've owned several rental properties (none at the moment), and someone WILL trash your home eventually no matter what you do. The more rentals you have the higher the possibility. The two worst incidents that I've had are: one guy used the kitchen drawers as "boxes" to move his things and left the apartment a complete disaster, and two - the toilet plugged, instead of calling me, the tenant got an axe, cut a hole in the floor and shit in the hole for three months. I had to get a hazmat crew in to clean it up. The odd thing was, he lived there for 18 months and NEVER missed a rent payment. Never paid it late, either.Quote:
Originally Posted by Bretsky
If you are not capitalized to the point that you can bank some rent money to fix problems, or can afford to have it sit vacant for a couple of months to find the "right" tenant, then it is not the right time for you to buy. I'd probably pass on a rental for "students" unless you are a contractor who can remodel frequently. It is not a market for the fainthearted, although it can be very lucrative. Lots and lots of risk, though.
There is a reason that the bank wants to see 10% down on an investment rental. You know this first-hand, I'm sure.
What concerns me, in my limited vantage point into your life, is that you said you upgraded your home recently, back to a 30 year mortgage, and you couldn't pay it down right now. If that's the case, how will you "fund" the rental? Why put your beautiful new home at risk? There is a time and place for everything, don't put your exisiting home at risk. Your wife will not be impressed when something "goes awry", and she has to move to an apartment.
Great to see you back RG, it's been awhile.
I was wondering if anyone has any opinions on buying a small house versus a condo right after I graduate. My dad was saying buying a one bedroom condo is a really bad idea since its really hard to sell. I posed the point of it I bought anything bigger, I wouldn't be able to pay above the minimum mortgage payment for a few years and would end up paying a lot more for the place than what I would be able to sell it for when I got married and I wouldn't use the space.
I guess I am pretty naive to how much of my money will really be dedicated to a mortgage payment each month, but it just doesn't seem like a good idea to get a bigger place for the added eventual value of it if I have a hard time paying anything above the minimum payment.
If I did go for the one bedroom one bath condo, I would pay it off probably within 5-6 years.
To my mind, it depends on the location. If it is in a neighborhood that emphasises schools and kids/etc. then it might be a problem. If it is in an urban area, there will be a market based on young, single professionals. At any rate, if you can get it paid off in 5-6 years and manage to live in it that whole time, that would be pretty amazing. Don't forget though, with condos come association fees so you also have to measure what amenities are available and what all you get for that money.
Quote:
Originally Posted by MJZiggy
Pretty amazing? Why?? Pretty smart. Every American could have a PAID FOR house in 10 years, no matter their income. The process is actually quite simple.
1. You need 20% down. (There are ZERO exeptions to this).
2. You need to purchase two homes.
3. The first needs to be approximately half the value of the home you ultimately want to own. A small house/condo/duplex is PERFECT. Location is important. You need to look to re-sale value.
4. You need a 15 year mortgage to take advantage of the lower interest.
5. You need to run an amortization schedule to pay the home off in 5 years.
6. You sell 1st home at 5 - 6 year point, hopefully adding a bit of appreciation.
7. You purchase Home number 2 - your dream home identified in the beginning- at a slightly higher price than you would have 5 years ago, and dump EVERY DIME of equity/cash you received from home #1.
8. You again take the 15 year loan, or lower term if available focused on MINIMIZING the interest rate.
9. You again run an amortization schedule for 5 year repayment.
10. You invite all your friends over for a "mortgage burning" party, and begin to live debt free for the rest of your life.
Yes, I realize that this is ambitious and not something everyone would consider. It, however, CAN BE DONE for EVERYONE. Whether it is a 2 bedroom trailer or a small condo, or a 30 room mansion, it WORKS. It takes discipline, it takes persistence and it FORCES you to live below your means. You cannot make two $500 a month car payments and pay a mortgage payment approaching $2200 a month (for most of us, anyhow), but you CAN MAKE THAT payment if you don't have two car payments.
In the end, it isn't a "stretch" or "overly ambitious", it is about choices. We all make them, we just don't focus on the impact of some of those choices.
Off my soapbox now...
Quote:
Originally Posted by retailguy
That's great advice if I could A) find something is SoCal under half a mil and B) have 20% of a half a mil in cash handy...
Guess I'll either have to suck it up and by a property somewhere else and move back here for 'the second house'. Bummer...
Anyway I can put down just 5 or 10%? Should I tap my 401k savings (one-time w/o penalty) to do this OR just continue renting/investing?