32 and wanting to retire in a few years

[haha]

I have found that this is a much better option than I realized.  After working for a professional engineer (bridge designer) for many years, I found that I was burnt out.  It was incredibly stressful to look myself in the mirror and feel that I wasn't putting out my best work (I mean best work in terms of output--nothing has ever collapsed  )  These feelings are damaging to one's self-esteem and are of form of violence to one's self IMO.

last spring I transferred to a seasonal construction position.  I find that it is much easier for me to give my all when I know that in October I can stop for 6 months.  Even though I was working 60 hour-weeks, the time flew by.  Plus, I make as much money in 6 months as I did before in 12.

Can you tell me what kind of work you are able to find for a 6 month gig? Do you go back to your same employer in spring? Can you keep health insurance somehow? I have a son who toys with going full time as a snowboarder, but I think he realizes that he would likely never really have any money. He has math/ comp sci degree, and none of your construction experience. But I suppose there might be seasonal opportunities for him also.

Haha

 

[bosco]

Can you tell me what kind of work you are able to find for a 6 month gig? Do you go back to your same employer in spring? Can you keep health insurance somehow? I have a son who toys with going full time as a snowboarder, but I think he realizes that he would likely never really have any money. He has math/ comp sci degree, and none of your construction experience. But I suppose there might be seasonal opportunities for him also.

Haha

sorry it took me so long to respond--I've been off cruising around and haven't checked in here for a while.

To answer your questions, I am a construction engineer in a far-north (above the Arctic circle) community. Construction typically shuts down during the winter. My employer (the State of Alaska) figured out that it saved them money to allow people like me to bugger off during the winter if they wanted--assuming the contractor shuts down. Some kinds of jobs they might not in which case I would have to stay, but usually human productivity is low at 40 below. So yes, I go back to my same employer in the spring. There are opportunities, even for people without engineering degrees but you pretty much have to be in the area to take advantage of them.

As for health insurance during my layoff, I can use COBRA but the premium is pretty high (my employer will not cover the premium while I am laid off). After shopping around, I discovered that there is a such thing as temporary medical insurance. It is high deductable, but only costs about $100 per month. The catch is that you must specify in advance how many months you want it and pay up front. In my case, I must return to work May 16, so this is easy. The risk is that if I purchase insurance through May 15 and get run over by a beer truck on May 10th and am lying in my hospital bed, on May 16 the coverage ends, period. So if I cannot report back to work because I am in intensive care, I have a problem.

However, I am 52 years old and if I was that stove up, I could claim early retirement and my retirement medical would kick in. So I feel I am covered although I feel I had better get a power of attorney into the hands of my wife (a good idea anyway).

 

[haha]

sorry it took me so long to respond--I've been off cruising around and haven't checked in here for a while.

As for health insurance during my layoff, I can use COBRA but the premium is pretty high (my employer will not cover the premium while I am laid off).  After shopping around, I discovered that there is a such thing as temporary medical insurance.  It is high deductable, but only costs about $100 per month.  The catch is that you must specify in advance how many months you want it and pay up front.  In my case, I must return to work May 16, so this is easy.  The risk is that if I purchase insurance through May 15 and get run over by a beer truck on May 10th and am lying in my hospital bed, on May 16 the coverage ends, period.  So if I cannot report back to work because I am in intensive care, I have a problem.

However, I am 52 years old and if I was that stove up, I could claim early retirement and my retirement medical would kick in.  So I feel I am covered although I feel I had better get a power of attorney into the hands of my wife (a good idea anyway).

Thanks Bosco. This is a funny reply.  Sounds like you have just about the ideal set-up.

Ha

 

[bosco]

Thanks Bosco. This is a funny reply. Sounds like you have just about the ideal set-up.

Ha

yes, it is very ideal, for me at least. Also, due to the benefit calculation formula, working seasonally and making overtime while I do work will increase my DB pension when I finally do ER, approximately 2 years from now.

 

[vic]

Uggh.... Prudhoe Bay, AK. Had a one year stint there until oil dropped to $9/barrel. We worked through the winter. My job was mainly *outside*. They would only stop work when it was to cold for the steel and it would get brittle (don't worry about us human beings).

Some interesting experiences too. Toby the bear was cute. Especially when the workers were making faces through the window in the steel shop door and figured they were safe. Toby was a smart cookie, opened the door and start roaming around. Gone were the funny faces.

Vicky

 

[wstu32]

isnt it just wonderful that you are in such a position... a lot to be thankful for during this Christmas season.... angel:

 

[needtoretireearly]

Update:
Thanks for all your responses.

Just bought a house with the extra space that I need and want. I close in 3 weeks! I put 20% down. The seller was motivated, needed out fast. They had trouble selling it because the walls and ceilings of the ENTIRE HOUSE are all painted LIME GREEN (which I will paint). It has tons of upgrades and the inspection I had done went well.

After some bargaining, I got a REALLY good deal on it. It is located in a growing area on the outskirts of Atlanta and will likely appreciate in value. It is also 10 minutes from my work so will save me a LOT of stress, time, and gas as I now drive almost 2 hours round trip for work each day. My interest rate is 5.875, 30 yr fixed. I did the calculations and I would be better off taking the extra cash for investing, rather than getting a 15 yr fixed. The interest rate is not that much different for a 15 yr fixed. I will invest the extra cash and make a higher return. Also the rate was not low enough on an interest only loan to justify it, even though that would have freed up more cash for investing. So I went with the 30 yr. My payment is about $816 a month, $1000 per month when you add the taxes and insurance.

I do not know how long I will stay in that house as I can't predict the future. But at present I am thinking I will stay a long time. At least 5 years. Maybe 20 years. Who knows.

I will be keeping my condo as rental property. The rent will be enough for me to break even after upkeep expenses. Plus I'll get the tax deduction. These condos are renting great but selling poorly. That is why I am renting it instead of selling.

If I enjoy renting my condo, then one day I might decide to rent my house and move again. This would not be for SEVERAL years however. I may not do that at all, it was just a thought, for the far off future once I've lived there several years.

When you calculate saved gas costs, I am not paying that much more for my house than I am for my condo. Maybe $100 more a month. Plus I will have a lot less stress, living closer to work. This will definatly help me to make more money, as I work in 100% commission sales. When I am tired from all the driving and frustrated due to traffic, I definatly don't make as much money selling.

So even though retirement is my ultimate goal, I am certain that this house purchase was a good idea.

My one bedroom condo does not leave me any room for entertaining during the holidays.

My new house has a guest room so I can welcome my out-of-town friends and not feel like there is no space for them.



My boss's husband is VERY successful at real estate investing. They finance by owner several properties.

I was thinking of getting into that, just with my condo, since I have enough income that I can carry two mortgages.

I am not sure if I want to do that or just rent. But they said lots of times pple pay a large (several thousand dollars) down payment, then live in the house a few months and can't pay the bills. So you get to keep the deposit money and they have to move out.

Another option would be lease to own.

I believe I'd make more money doing this than just renting the place.

Does anyone know much about this?

I definatly will get with my boss's husband. He REALLY knows his stuff and will tell me how to do this.

The only thing is, he said, you must be able to pick up the mortgage if your tenant can not. Which I can do. Also if they damage the place, in a owner finance situation, and they can't make the payments and move out, I would be stuck with the bill. It is a risk.

 

[Martha]

If you are thinking of selling the condo on a contract or with a "lease to own," with the mortgage still on the property, you have a number of issues to look at. The major issue is with your mortgage lender. Nearly all residential mortgages provide that the entire mortgage loan balance is due in full if the property is sold. So if you sell on a contract, your lender could require you to pay off the mortgage. This would make potential buyers very nervous.

Many mortgages also require you to live on the property and prohibit its use as rental property. In your case, it might be no harm, no foul, because the lender never finds out you aren't using it as your home and tenants, unlike buyers, wouldn't care.

 

[justin]

Many mortgages also require you to live on the property and prohibit its use as rental property. In your case, it might be no harm, no foul, because the lender never finds out you aren't using it as your home and tenants, unlike buyers, wouldn't care.

Most of the mortgages around North Carolina I've seen (the standard ones) require between 6 months and 2 years of use as a residence. After that, you can do what you want (as long as you don't violate other terms of the loan/mortgage/deed of trust). I think that is to prevent the rental RE investor from using loans with favorable rates for principal residences as investment property loans.

Also, in NC (don't know the law in GA), if the seller of a house also makes a mortgage loan on the house, then that seller can't collect any deficiencies from the buyer in event of default. In other words, you can foreclose on your collateral (the house), but you won't get back any amounts still due under the loan if the sale of the house doesn't satisfy all amounts owed. This is a minority law, and may not apply in GA, but beware. Not a big issue if you're getting a 10% downpayment or so, since there's an equity cushion to protect you in the event of a default and foreclosure.

 

[Nords]

I will be keeping my condo as rental property.  The rent will be enough for me to break even after upkeep expenses.  Plus I'll get the tax deduction.  These condos are renting great but selling poorly.  That is why I am renting it instead of selling.

If I enjoy renting my condo, then one day I might decide to rent my house and move again.

Have you been a landlord before? It's worth reading this thread and perhaps even (1) Investing in Real Estate, 4th edition or later, by Andrew McLean & Gary W. Eldred (who's taken over the new editions) & (2) Landlording by Leigh Robinson (7th edition or later).

 

[wildcat]

Sounds like you are a pretty busy person as it is...you may enjoy your free time more than you enjoy becoming a landlord.

 

[tryan]

... I would add - only rely on 50% of the rents to cover the mortgage and taxes.

Your other expenses (condo fee, maintenance, vacancy, utilities, insurance ... and - oh yeah - PROFIT) will eat the rest .

Do this and you'll be fine.