Hello from REI guy in the Bay Area!

[j007]

Hi there, I'm new to the forum

I'm almost 40 and, like most of you, am looking to retire "early" (at least early for me.) I decided to register here to get some new ideas but equally importantly, for some moral support.

A few years ago, it really dawned on me that I'm not getting younger and that I need to think more about some sort of exit strategy. (Having a stressful job also helped that realization)

During the downturn of '09, I got into real estate as an investment (and now as a retirement) strategy. Not being a stocks-and-bonds guy at all, it really felt good to find something financial that I understood well and would generate me some actual hard income not just so-called "growth".

In the past several years, I've been doing landlording / REI and it's been working out really well. Once I understood what a powerful investment vehicle it was, I've been plowing nearly all my savings into acquisitions.

But, now the new idea has soured a bit and it's turned into a crazy retirement race with myself. I'm accustomed to working my a** off, but I never knew that taking the early retirement route would be this grueling and grim.

From a rough estimate, if I stick with things for another 7 years or so, I may be in shape for some sort of retirement. But, that's a long time to suffer and, at the rate I'm going, I'm not sure I'll make it to the end without incurring some health problems.

For those of you that are still a ways from the end, what do you do to manage your stress and keep yourself upbeat?

Thanks for listening. Hopefully, I can meet some like-minded people here and we can all help each other.

- Jason

PS - If anyone has questions or is curious about real estate investing, let me know. I'd be happy to answer to the best of my knowledge.

 

[samclem]

Jason,
Welcome to the board. We've got some folks here who can share their real estate techniques and stories.

So, what's causing the stress--the "day job", the landlording, or both?

If the "bay area" is SF--is your plan to stay there or find somewhere less expensive to retire?

Again, welcome.

samclem

 

[j007]

Hi Sam, great to hear from you!

The stress is really a combination of the job and the hard push toward early retirement. If the job was a little less stressful, I'd feel like I had a little more time to work and wouldn't be worried about a stroke by 50. But, I get paid pretty well and I'm afraid moving to a lower-paying job would put things at risk. I'm torn. Also, 40 is looming and I think that this is a pressure in and of itself.

I dunno. I just talked with a financial planner and he thinks we're doing ok financially. But he admits that it's mostly because of my job.

My wife is working full-time on our real estate biz which is in the beginning stages and not yet producing the income that it potentially could. Same with our rentals. Once we get about 10 going, most of our living expenses will be taken care of by passive income, but I'm just trying to get to that point as fast as possible. So, in short, there's so much work that still needs to be done and I'm feeling overwhelmed.

And, yes, Bay Area means California, but we're definitely not in San Fran. Like you said, WAY expensive. I'm in the East Bay, which is more reasonably-priced.

 

[xyz]

Welcome, you will certainly meet many kindred spirits here. Most folks here including myself have worked hard for their early retirement due to a high degree of stress. For me, it has become easier as I get closer to the day (which is 44 days - 15 work days away!). A good plan and steady progress works. Look forward to hearing more from you.

 

[martyp]

It is good to have a goal and plan for ER but it is not worth killing yourself over time periods of 7+ years. A year or two maybe . . . My advice is to not obsess over retirement this early. Work hard but stay healthy and have a life. Practice living below your means but still remain happy.

BTW. I'm also an East Bay resident. If you already own your house and you are used to the cost of living then it is not that hard to get by affordably. There is so much to do here that is free or low cost. It's a great place to ER.

 

[ronocnikral]

It's not clear to me if when you "retire" you are going to kick the real estate to the curb or not, but the words you wrote above regarding your D-dub working full time on your business and considering your time you put into the biz, I wouldn't expect this to decrease. And while "retirement" can mean a lot of things to a lot of people, I have a hard time of fitting the words "full-time" and "Work" into my definition.

 

[obgyn65]

Welcome, j007.

 

[j007]

Hi everyone, thanks for your posts!

Martyrp, it's good to hear from a fellow east bay guy. We should chat.

Rono: As far as the REI biz goes, when I finally pull the pin, it's true that I may continue the investing. But, at that point, if I do, it'll be small-potatoes, maybe an acquisition every few years if the right thing comes along. The main thing at that point is that I'll be able to focus mostly on what makes ME happy rather than putting all the eggs into the "tomorrow" basket. If it's still REI, that's fine. If it's not, that'll be fine too. All good problems to have.

I don't really think about or plan anything related to post-ER life. To me, it's too early and a little sad, like planning what you'll do when you win the lottery. A nice thought on a lazy Sunday, but when you realize it hasn't happened, it just brings you down.

Like some of you said, though, if I'm to get to the end, I'll have to change things. DW also thinks so. My lifestyle has to change, I've got to break bad thought habits, and try to reduce stress. I'm trying, but that will also be a journey in and of itself!

Take care, everyone.

 

[pb4uski]

....The stress is really a combination of the job and the hard push toward early retirement. ...Also, 40 is looming and I think that this is a pressure in and of itself......Once we get about 10 going, most of our living expenses will be taken care of by passive income, but I'm just trying to get to that point as fast as possible. So, in short, there's so much work that still needs to be done and I'm feeling overwhelmed.

I think that you are pushing too hard. You're only 40, so realistically your 7 year time line is half of what would be typical for an "early" retirement in your early 50s.

Your're doing great, keep it up but slow down and smell the roses a bit.

 

[ducky911]

I have had rentals for over twenty years...with the down turn I bought two more in the east bay. They are doing and I beleave in the future do very well.

good luck

bob

 

[knucklehead 61]

I have had rentals for over twenty years...with the down turn I bought two more in the east bay. They are doing and I beleave in the future do very well.

good luck

bob

i have a question relating to buying rental property.
i currently own 5 rentals + primary house with a equity line on it for a total of 7 mortgages. i have offers in on 2 other props & will make another offer friday or monday.
but...i am having a tough time finding a lender who will give me more mortgages, even though i look great on paper, income, credit score, etc.
how are you guys getting more purchase loans?

 

[RetireBy90]

I think that you are pushing too hard. You're only 40, so realistically your 7 year time line is half of what would be typical for an "early" retirement in your early 50s.

Your're doing great, keep it up but slow down and smell the roses a bit.

I would just echo pb4uski. It takes a while to get positioned for retirement or financial independence. I find that if I focus on the planning for a while, get a good plan designed and implemented, then back off the focus for a while and let the plan work, then come back and review and make any necessary changes, then back off again, I'm able to work the plan but not have it take over. If you have a well thought out plan, it will take a while for it to work. Give it some time and don't expect more than the plan can deliver.

I think RE is a great investment most times and especially now, but I hire a management company. It does eat into returns, but saves a lot of stress. If you have a management company, it allows you to diversify into different locations so if the Bay Area hits a slump, your others may pick up the slack. I have a property in Reno, and recently worked with a friend that bought one for cash and even after management fees and other costs gets 5-6% return just from the rent.

One more that I'm sure you already know, Don't expect RE to appreciate much more than inflation, over the long haul. If I remember correctly, about 3%/yr.

Oh and think about diversify into other investments. That can improve your return and help smooth out ups and downs you will see in any investment.

Welcome to you, looking forward to lessons you have learned. Please share as appropriate!