just QUIT at 44.

[joebloe]

I FINALLY CALLED IT QUIT and offered to sell my biz to a friend. He has until next weekend to think about it and I have until next weekend to reverse course. I'm a little scared cause my days of making mucho dinero will come to a complete stop. But I'm also satisfied that maybe I already have enough money for a very comfortable lifestyle to no longer need any more money. Did I make the right choice to quit now? Here's my current situation if I quit now:

Age: 44, married w/ 10yo
Cash saving: $1.5M ($1.2M + $300k from biz sale)
SEP-IRA: $525k (all in Vanguard ETF)
RE invest worth: $1.7M (20+ new homes paid in full $1.2M)
RE monthly income: $14k net
mortgage: zero
debt: zero

$170K annual rental income + $65k annual cash withdraw ($1.5M saving at 1% interest over 25 years) = $235K annual living money for the next 25 years. I take social security at 62 if allowed...don't care to wait until 70 for increased benefit. I also withdraw from my IRA at 60 if allowed. Rental properties could be sold off if money is tight or kid need money for college. Is my calculation and expectation correct? Am I missing anything?

 

[Walt34]

Looks like you're good to go. Congratulations!

 

[jon-nyc]

You don't say what your expenses are but most people could make your numbers work, that's for sure.


Congrats, from another who retired at 44 with a youngster at home.

 

[pb4uski]

You don't say what your expenses are but most people could make your numbers work, that's for sure...

+1 Most people would consider $235k a year income to still be mucho dinero.

If your $1.5m is all cash, I don't think a 4.3% WR is sustainable but you probably have a lot of wiggle room.

Congratulations. Financially you are all set.

But..... are you ready emotionally? What are you going to do all day?

 

[panacea]

Very nice- Congrats!

 

[heeyy_joe]

Learn to fly and buy a plane.

 

[Milton]

But..... are you ready emotionally? What are you going to do all day?

Seriously?

 

[pb4uski]

Seriously?

Believe it or not, that is a significant issue for some people.

 

[ajs56]

Congrats - on all aspects of your portfolio. The RE income will sontinue as long as you hold it, which will likely be until you determine that it's more of a PITA than you are willing to deal with. At age 44, that could be a long time, and if you actively manage or maintain your income RE, that might be something to keep you engaged just enough. Or, if you decide to hire out the management, you seem to have plenty of cash flow for that also. Enjoy!

 

[ajs56]

Believe it or not, that is a significant issue for some people.

So true... always better to be running toward something rather than away from something. At age 44, you have a lot of time to fill, be aware and plan accordingly. Oh... and enjoy!

 

[Fermion]

But..... are you ready emotionally? What are you going to do all day?

With 20+ rental houses I think there would be plenty to do while retired? That is an average of one new roof a year and a leaky toilet every two weeks.

 

[Walt34]

With 20+ rental houses I think there would be plenty to do while retired? That is an average of one new roof a year and a leaky toilet every two weeks.

Yuck! Sounds like w*rk to me.

 

[pb4uski]

With 20+ rental houses I think there would be plenty to do while retired? That is an average of one new roof a year and a leaky toilet every two weeks.

Yuck! Sounds like w*rk to me.

Good points and that had crossed my mind as well, but it sounds like the OP is pulling off managing the properties and working now so is seems he'll have some free time on his hands.

 

[Spanky]

With 20+ rental houses I think there would be plenty to do while retired? That is an average of one new roof a year and a leaky toilet every two weeks.

The OP may have farmed out all property management tasks to a firm.

 

[Spanky]

+1 Most people would consider $235k a year income to still be mucho dinero.

That's a ton of cash!

 

[Fermion]

The OP may have farmed out all property management tasks to a firm.

Does make you wonder if we are in a rental bubble when you can get a 10% net return after farming out all of the work (if the OP has indeed done that).

 

[joebloe]

With 20+ rental houses I think there would be plenty to do while retired? That is an average of one new roof a year and a leaky toilet every two weeks.

These were all built within last 7 years so major problem coming. Only one oven needed to be replaced. A few properties needed laminate floor and fresh paint. Handyman or mgmt companies do everything.

These 3BR/2.5BA townhouses were purchased for $25k-$45k in 2011-2013, and renting out for $750-$850 monthly. The cap rate looked great and the foreclosed properties were new so I bought them unseen, based on real estate agent description. I stopped buying cause prices now $55k-$85k; not great deals anymore.

 

[Fermion]

These were all built within last 7 years so major problem coming. Only one oven needed to be replaced. A few properties needed laminate floor and fresh paint. Handyman or mgmt companies do everything.

These 3BR/2.5BA townhouses were purchased for $25k-$45k in 2011-2013, and renting out for $750-$850 monthly. The cap rate looked great and the foreclosed properties were new so I bought them unseen, based on real estate agent description. I stopped buying cause prices now $55k-$85k; not great deals anymore.

$850 a month for a $45k property is very good. That type of deal can't be found around here. Even a property soaked in pee from 29 cats and used as a meth lab would be way more than $45k around here.

 

[sewang]

I FINALLY CALLED IT QUIT and offered to sell my biz to a friend. He has until next weekend to think about it and I have until next weekend to reverse course. I'm a little scared cause my days of making mucho dinero will come to a complete stop. But I'm also satisfied that maybe I already have enough money for a very comfortable lifestyle to no longer need any more money. Did I make the right choice to quit now? Here's my current situation if I quit now:

Age: 44, married w/ 10yo
Cash saving: $1.5M ($1.2M + $300k from biz sale)
SEP-IRA: $525k (all in Vanguard ETF)
RE invest worth: $1.7M (20+ new homes paid in full $1.2M)
RE monthly income: $14k net
mortgage: zero
debt: zero

$170K annual rental income + $65k annual cash withdraw ($1.5M saving at 1% interest over 25 years) = $235K annual living money for the next 25 years. I take social security at 62 if allowed...don't care to wait until 70 for increased benefit. I also withdraw from my IRA at 60 if allowed. Rental properties could be sold off if money is tight or kid need money for college. Is my calculation and expectation correct? Am I missing anything?

Have you take tax into account? Also which state you get such high rental return?
I have a few properties in different state. None of them returns as high as yours.
good job!

 

[dshawg77]

$850 a month for a $45k property is very good. That type of deal can't be found around here. Even a property soaked in pee from 29 cats and used as a meth lab would be way more than $45k around here.

Where does JoeBlow live?