wandering
Dryer sheet aficionado
- Joined
- Mar 29, 2017
- Messages
- 25
Hey
Alright, first post here, please overlook the lack or misuse of abbreviations here... e.g. I think DH means ... spouse? But if I accidentally misuse it in the context of a designated hitter or something... just tell me (and feel free to laugh at me behind your screen).
Also, I hope I'm posting this in the proper forum. Moderators, feel free to move it or tell me how to if not.
>> This is a "calling for all wisdom" from you older, wiser folk who have seen more than I have, experienced more than I have, and from the looks of this forum... thought a lot more than I have about life, marriage (I'm particularly grateful for all the openness and vulnerability I've seen on E-R.org) and investments.
I'm also going to do my best not to lay down in the chair and treat you all like you are my therapist, attempting instead to focus here on the practical aspects of a couple conundrums which make up my financial life.
1- Humbling myself: I don't want to learn my lessons through suffering, I'd rather just listen and be shown/proven what I'm doing, what it could cost me, probabilities, and the intuition of the masses here at E-R.org, before the loss and suffering come.
What am I talking about?
I'm the guy with all his eggs in one basket.
But it feels like I have a golden-egg laying goose that will only produce them into this one basket!
I'm having a hard time deciding what to do next.
Story/Work: For about 5 years, I worked in real estate (specifically, the financial, acquisitions, capital raising and development side of real estate) in a pretty small and homogenous town.
I spent 3 years putting together a real estate investment portfolio of 9 single-family homes, 4 duplexes, and 1 fourplex, all within a couple miles of each other (not diversified geographically). I'm about to go under contract on another duplex in the same town (hoping today or tomorrow).
I also own my personal home, in a separate city from the rentals.
These rentals are in a college town, I started picking them up in 2012, and historically I've had less than 5% vacancy on the entire portfolio. I have a property management team that is not perfect, but my company of choice in that town, and they are professional, expensive, and not slum lording by any means... since I hired them the overall expense ratio of properties is around 50%, and they aren't old or class-C properties.
The assets would likely be appraised just over $4 million, I've recently refinanced three and am closing another big refinance in the next week or two. That will land me with five 30-yr fixed mortgages, excluding my personal home (15-yr fixed), and all the rest are ARM's, generally 5/1's with either 20 or 25 year amortizations.
The Bank Debt = about 64% of market value.
The Private Debt = another 20% of market value.
So... deep breaths... I'm 84% leveraged. I say deep breaths because, I feel a small pang of anxiety just typing that out. A year or two ago, I was probably at 94% , but the real estate market recently experienced some growth.
That makes my real estate equity (pre-closing costs of a sale) around $600,000. (Swells with pride, then remembers that if the market hiccups he loses 1/3 of his net worth with a 5% drop in the market).
*** I have about $2,500 in stocks. (Pauses for the crowd's laughter to die down).
*** I probably have $100,000 or so in equity in my personal home.
*** I own an unsecured note receivable for $117,500 on lame terms from a real estate deal that went bad, and the payor is making I/O payments on that, with a balloon here in just under 6 years. I hardly count this on my personal financial statement because of the rocky nature of the history behind this...
*** I own a couple pairs of jeans, a printer... ok, ok, cheesy, I'll stop.
(Just realized I've been saying, "I" this whole time, without properly introducing my wife and daughter, so pretend I've been saying "we"...)
We have probably ~$50,000 or so of cash in the bank.
2- In light of #1 above, you might have already guessed that I'm a typical guy on this forum, but maybe with a bit more naivety than most of you... but what we have in common is a (desperate?) desire to have financial independence. I want to retire as early as possible, not because I'm tired of my day-job (I've never really had one), but because I want to live my life playing, having fun, exploring, and discovering.
I'm not one of those, "I love work" guys. I do want to have a full "contribution bucket" in my life... but I don't quite know what makes me feel that way, and I want to be free to discover that without pressure and the need for a paycheck alongside it.
I also want all of the above with a wife who is happy with our finances, content, and understands what she needs to in order to continue life successfully if I were to die. We do have term life insurance ($1 million to my wife, $450K to a real estate company I founded that relies heavily on me for asset management), and my wife is very intelligent, but also pretty dependent on me for the handling of all the ins and outs of our (somewhat complex) financial/real estate situation.
My wife and I do fall into the category of, "Not financially compatible,"... but somehow we've survived. How? Combination of luck, upbringing, fear of abandonment, and sincere loving commitment (some good ingredients, some bad, but we are where we are). Advice here is welcomed.
So, while these real estate assets have been snowballing and making the net worth figure grow pretty rapidly, which is so hard for me to let go of... it feels like I need to make some big changes to our balance sheet, and the financial operations of our life-- lest the day of doom fall upon the little town my portfolio is in, crushing everything, or the grim reaper visit me and leave my wife with a complicated situation to deal with along with her grief.
It seems that if I make a big change now: (A) I might be dodging a major bullet that could manifest, but (B) I might be selling my golden-egg laying goose underpriced, and signing myself up for the career horror stories I've always personally avoided and that I read about here and elsewhere on the internet, as well as see my peers experiencing on a weekly basis.
3- I'll try to just make this third one succinct, I thought about not mentioning it at all, but it just feels too relevant.
::Lays down on therapists bedside couch:::
Another factor in my life is that 15 months ago, my wife and I were 26 weeks pregnant, visiting family out of state, and our beautiful daughter decided Christmas Eve was simply too gorgeous of a night to not experience outside the womb.
So, we were blessed with the experience of having a 26 week micro-premie 2,000 miles from home and community, and we journeyed through the rollercoaster of her growth to full term in the NICU. It changed us.
Upon our return, we were different people, so we moved from our city of friends [who had become strangers to us, because of our being different people] to a new city (this is why I live away from my portfolio now), and we are in the midst of a unique version of "Post-NICU Trauma" that has me a bit confused about what I want out of life, work, career... and the DH (??!?) is certainly just as deep in the trenches of, "Who am I? What do I want? What do I do next?".... as I am.
I just mention this because it's a subjective but important factor in the equation. And I would like to welcome any wisdom or advice here as well.
Allegedly 97%+ of couples who have a long-term NICU stay like ours end up divorced, and while we don't judge divorcees at all, it's not what we want. Some days it's hard (actually, some months) but we have also become much, much closer through the past year and a half... more honest with each other, more humble, more accepting... yet also more stressed, more easily triggered, less tolerant of things we don't like about each other's behaviors...etc
Throw that in there with #2 and #1, and tell me what you think. Anything. Advice on marriage, advice on my financial situation, what to do next, how to still keep early retirement as a top priority amidst feeling like your wife deserves and has easily earned $500K of do-whatever-you-want money (she just gave and gave and gave to our baby in such an intense season... while I basically emotionally short-circuited on hour #1).
Thanks in advance, if I take a while to respond... I will, just give me time.
Alright, first post here, please overlook the lack or misuse of abbreviations here... e.g. I think DH means ... spouse? But if I accidentally misuse it in the context of a designated hitter or something... just tell me (and feel free to laugh at me behind your screen).
Also, I hope I'm posting this in the proper forum. Moderators, feel free to move it or tell me how to if not.
>> This is a "calling for all wisdom" from you older, wiser folk who have seen more than I have, experienced more than I have, and from the looks of this forum... thought a lot more than I have about life, marriage (I'm particularly grateful for all the openness and vulnerability I've seen on E-R.org) and investments.
I'm also going to do my best not to lay down in the chair and treat you all like you are my therapist, attempting instead to focus here on the practical aspects of a couple conundrums which make up my financial life.
1- Humbling myself: I don't want to learn my lessons through suffering, I'd rather just listen and be shown/proven what I'm doing, what it could cost me, probabilities, and the intuition of the masses here at E-R.org, before the loss and suffering come.
What am I talking about?
I'm the guy with all his eggs in one basket.
But it feels like I have a golden-egg laying goose that will only produce them into this one basket!
I'm having a hard time deciding what to do next.
Story/Work: For about 5 years, I worked in real estate (specifically, the financial, acquisitions, capital raising and development side of real estate) in a pretty small and homogenous town.
I spent 3 years putting together a real estate investment portfolio of 9 single-family homes, 4 duplexes, and 1 fourplex, all within a couple miles of each other (not diversified geographically). I'm about to go under contract on another duplex in the same town (hoping today or tomorrow).
I also own my personal home, in a separate city from the rentals.
These rentals are in a college town, I started picking them up in 2012, and historically I've had less than 5% vacancy on the entire portfolio. I have a property management team that is not perfect, but my company of choice in that town, and they are professional, expensive, and not slum lording by any means... since I hired them the overall expense ratio of properties is around 50%, and they aren't old or class-C properties.
The assets would likely be appraised just over $4 million, I've recently refinanced three and am closing another big refinance in the next week or two. That will land me with five 30-yr fixed mortgages, excluding my personal home (15-yr fixed), and all the rest are ARM's, generally 5/1's with either 20 or 25 year amortizations.
The Bank Debt = about 64% of market value.
The Private Debt = another 20% of market value.
So... deep breaths... I'm 84% leveraged. I say deep breaths because, I feel a small pang of anxiety just typing that out. A year or two ago, I was probably at 94% , but the real estate market recently experienced some growth.
That makes my real estate equity (pre-closing costs of a sale) around $600,000. (Swells with pride, then remembers that if the market hiccups he loses 1/3 of his net worth with a 5% drop in the market).
*** I have about $2,500 in stocks. (Pauses for the crowd's laughter to die down).
*** I probably have $100,000 or so in equity in my personal home.
*** I own an unsecured note receivable for $117,500 on lame terms from a real estate deal that went bad, and the payor is making I/O payments on that, with a balloon here in just under 6 years. I hardly count this on my personal financial statement because of the rocky nature of the history behind this...
*** I own a couple pairs of jeans, a printer... ok, ok, cheesy, I'll stop.
(Just realized I've been saying, "I" this whole time, without properly introducing my wife and daughter, so pretend I've been saying "we"...)
We have probably ~$50,000 or so of cash in the bank.
2- In light of #1 above, you might have already guessed that I'm a typical guy on this forum, but maybe with a bit more naivety than most of you... but what we have in common is a (desperate?) desire to have financial independence. I want to retire as early as possible, not because I'm tired of my day-job (I've never really had one), but because I want to live my life playing, having fun, exploring, and discovering.
I'm not one of those, "I love work" guys. I do want to have a full "contribution bucket" in my life... but I don't quite know what makes me feel that way, and I want to be free to discover that without pressure and the need for a paycheck alongside it.
I also want all of the above with a wife who is happy with our finances, content, and understands what she needs to in order to continue life successfully if I were to die. We do have term life insurance ($1 million to my wife, $450K to a real estate company I founded that relies heavily on me for asset management), and my wife is very intelligent, but also pretty dependent on me for the handling of all the ins and outs of our (somewhat complex) financial/real estate situation.
My wife and I do fall into the category of, "Not financially compatible,"... but somehow we've survived. How? Combination of luck, upbringing, fear of abandonment, and sincere loving commitment (some good ingredients, some bad, but we are where we are). Advice here is welcomed.
So, while these real estate assets have been snowballing and making the net worth figure grow pretty rapidly, which is so hard for me to let go of... it feels like I need to make some big changes to our balance sheet, and the financial operations of our life-- lest the day of doom fall upon the little town my portfolio is in, crushing everything, or the grim reaper visit me and leave my wife with a complicated situation to deal with along with her grief.
It seems that if I make a big change now: (A) I might be dodging a major bullet that could manifest, but (B) I might be selling my golden-egg laying goose underpriced, and signing myself up for the career horror stories I've always personally avoided and that I read about here and elsewhere on the internet, as well as see my peers experiencing on a weekly basis.
3- I'll try to just make this third one succinct, I thought about not mentioning it at all, but it just feels too relevant.
::Lays down on therapists bedside couch:::
Another factor in my life is that 15 months ago, my wife and I were 26 weeks pregnant, visiting family out of state, and our beautiful daughter decided Christmas Eve was simply too gorgeous of a night to not experience outside the womb.
So, we were blessed with the experience of having a 26 week micro-premie 2,000 miles from home and community, and we journeyed through the rollercoaster of her growth to full term in the NICU. It changed us.
Upon our return, we were different people, so we moved from our city of friends [who had become strangers to us, because of our being different people] to a new city (this is why I live away from my portfolio now), and we are in the midst of a unique version of "Post-NICU Trauma" that has me a bit confused about what I want out of life, work, career... and the DH (??!?) is certainly just as deep in the trenches of, "Who am I? What do I want? What do I do next?".... as I am.
I just mention this because it's a subjective but important factor in the equation. And I would like to welcome any wisdom or advice here as well.
Allegedly 97%+ of couples who have a long-term NICU stay like ours end up divorced, and while we don't judge divorcees at all, it's not what we want. Some days it's hard (actually, some months) but we have also become much, much closer through the past year and a half... more honest with each other, more humble, more accepting... yet also more stressed, more easily triggered, less tolerant of things we don't like about each other's behaviors...etc
Throw that in there with #2 and #1, and tell me what you think. Anything. Advice on marriage, advice on my financial situation, what to do next, how to still keep early retirement as a top priority amidst feeling like your wife deserves and has easily earned $500K of do-whatever-you-want money (she just gave and gave and gave to our baby in such an intense season... while I basically emotionally short-circuited on hour #1).
Thanks in advance, if I take a while to respond... I will, just give me time.