remotedesktop
Confused about dryer sheets
Background:
I just turned 40. My net worth is 3.2 million. 1 million liquid cash, the other 2 million is equity in my houses including primary residence and rental properties for a total of 8 properties. Cash flow is about 30K a year because I cash out refinanced a couple years ago to buy more properties with the equity rather than using cash on hand. Real estate has been my bread and butter, it's how I made my 3 million. At this point, I make 1 million a year off of it (appreciation, cash flow and principal pay down). Again, I make 1 million a year off appreciation and such when the market is good, which is most of the time...factor that in.
I was planning on buying two more houses with a total of 300K down to ride the appreciation wave long term, two more houses that will be paid off when I'm older, etc. I had planned on retiring at 40 with 1 million, this was the plan I made when I was 30. Now I have three times that but life is more expensive and complicated than it was 10 years ago.
My living expenses:
Because I rent out part of my house, I mostly live for free housing wise. Outside of that my living expenses as far as base are 1K, but realistically 2K. That includes money to date, buy a trinket here and there, etc. To be really comfortable I'd like to have 4K a month passive income in retirement. With a paid off house, in a low property tax state, utilities, taxes, maintenance, insurance should round up to 1K. That leaves 1K for gas, car insurance, food, incidentals, internet, phone, etc. So that brings me up to 2K per month. But I'd like another 2K buffer as I have occasional rental expenses such as repairs, appliances, etc. plus I date a lot and when in a relationship we have a tendency to travel. I've been to Tampa and Orlando 4 times in 3 years with 3 different women (one of them twice).
The why:
I'm tired of working and life. I've had many recent heart breaks and I don't want to work anymore, that's one less problem I have to deal with. I haven't wanted to work for a long time but now I'm really done. I had two health scares and almost died at 29 and 34, I'm not promised another day. They say stress causes cancer. I've worked so hard, MBA, 18 career certifications that were hard to get, own and manage rentals, two full time tech management jobs, two part time jobs. I've been working so hard. To top it off I've had a series of failed relationships last few years. After having a long period of stability with one girl for 9 years, I'm an emotional mess, dating is getting harder as I get older, the women are not as good looking and all seem to have baggage/issues. After a recent life assessment I did, I realized everything in my life that I worked toward came to pass. But my relationships are rocky. I'd like to take time and heal, grow and find a life long forever girl. One that I'm compatible with and stays forever.
How I'm thinking of doing it:
-Relocating from WA to a cheaper part of Texas, Tennessee or Florida. With the equity of my primary residence, I should be able to buy a paid off house for cash. That will drastically reduce my living expenses.
-Take 1 million cash and put it in index funds or split between Apple, Tesla, Amazon, Google and Microsoft and live off 3% withdrawal rate of about 30K a year. Supplement that with rental income from properties as is, which is about 24K a year cash flow.
OR....
-Still relocate, but cash out refinance 1 million out of the houses before retiring. Between living off index funds and 1 million pulled out of the houses, that money should EASILY last me 10 years, realistically 15-20 years. By then the rents will have risen enough that they will cash flow enough I don't have to cash out refinance anymore for money to live off of. There are some people who do the cash out refinance thing every few years to live off of. Bonus is that it's tax free, it's a loan so not taxable income.
OR....
-Still relocated, use the 1 million to pay off 3 of the rentals, which should give me about 6K a month cash flow plus another 1K from the others that are still mortgaged. Move into a paid off house and retire. I like this because I've always lost my money in the stock market no matter what I've done. Options, swing trading, day trading, index funds, you name it. But real estate I've always made money. It's how I made my 3 million. At this point, I make 1 million a year off of it...so in a year I'll be worth 4 mil, in 2 years 5 mil, etc. At that point I could really retire without worrying. Maybe I hold off for now and grind a little longer. But two full time jobs, two part time ones, 8 houses and all the studying has really worn on me. Add to that endless heart ache from relationships last few years and I'm emotionally done. I want to destress and go live.
Some problems with this:
If I move to FL, TX or TN, I'll be too far to manage the properties. My best friend will move with me but he said his parents could help out. So far I've been doing ok with video tours and hiring contractors lately as a test of managing remotely. Not cheap but way cheaper than a PM. Liquidating them and moving them is risky as I may move somewhere else if I don't like it, or move back. But the properties make it very difficult to relocate since they are easier to manage locally. If I hire a PM, all my cash flow is basically gone.
Edited to add:
My real concern is managing the properties remotely. I'd like to leave them in WA for appreciation. I can live off of index funds 40K a year in a paid off house comfortably. That's really what my question comes down to. What do I do with the properties? I don't want to sell right away and move them. I might not like it at the new place after a year or two and move back or somewhere else.
I don't like the idea of doing syndications only with the money as I have no control. So far video tours and contractors are working well me not having to go to the properties. I intend to try to do that from out of state only having my best friends parents check on them when needed (since he is moving with me).
My hobby at that point will become just dating. My work will be managing my investments and properties remotely.
Also, another consideration I had was rather than putting 1 million into index funds to supplement rental income, I thought about using the 1 million to buy three paid off houses to rent out which should give me an extra 3K a month on top of 2.5K a month from existing properties. Conservatively let's say I take home 5K a month cash flow. with a paid off house, that is no problem for me to live off with plenty of buffer. Mind you I'm still making 1 mil a year off appreciation plus another nearly six figures from principal paydown.
I'd honestly feel better with real estate as I've always had terrible luck in stocks.
But if it wasn't for the rentals I'd be free to travel work and property management free....So then again index funds would give me 120K a year cash flow at 4% SWR or 90K 3% SWR. Then I never have to worry about managing rentals, which is a stressor locally but even more so 3K miles away.
I could just wait one year and hit 4 million NW or wait 2 years and hit 5 million net worth and then I'll have more options.
I just turned 40. My net worth is 3.2 million. 1 million liquid cash, the other 2 million is equity in my houses including primary residence and rental properties for a total of 8 properties. Cash flow is about 30K a year because I cash out refinanced a couple years ago to buy more properties with the equity rather than using cash on hand. Real estate has been my bread and butter, it's how I made my 3 million. At this point, I make 1 million a year off of it (appreciation, cash flow and principal pay down). Again, I make 1 million a year off appreciation and such when the market is good, which is most of the time...factor that in.
I was planning on buying two more houses with a total of 300K down to ride the appreciation wave long term, two more houses that will be paid off when I'm older, etc. I had planned on retiring at 40 with 1 million, this was the plan I made when I was 30. Now I have three times that but life is more expensive and complicated than it was 10 years ago.
My living expenses:
Because I rent out part of my house, I mostly live for free housing wise. Outside of that my living expenses as far as base are 1K, but realistically 2K. That includes money to date, buy a trinket here and there, etc. To be really comfortable I'd like to have 4K a month passive income in retirement. With a paid off house, in a low property tax state, utilities, taxes, maintenance, insurance should round up to 1K. That leaves 1K for gas, car insurance, food, incidentals, internet, phone, etc. So that brings me up to 2K per month. But I'd like another 2K buffer as I have occasional rental expenses such as repairs, appliances, etc. plus I date a lot and when in a relationship we have a tendency to travel. I've been to Tampa and Orlando 4 times in 3 years with 3 different women (one of them twice).
The why:
I'm tired of working and life. I've had many recent heart breaks and I don't want to work anymore, that's one less problem I have to deal with. I haven't wanted to work for a long time but now I'm really done. I had two health scares and almost died at 29 and 34, I'm not promised another day. They say stress causes cancer. I've worked so hard, MBA, 18 career certifications that were hard to get, own and manage rentals, two full time tech management jobs, two part time jobs. I've been working so hard. To top it off I've had a series of failed relationships last few years. After having a long period of stability with one girl for 9 years, I'm an emotional mess, dating is getting harder as I get older, the women are not as good looking and all seem to have baggage/issues. After a recent life assessment I did, I realized everything in my life that I worked toward came to pass. But my relationships are rocky. I'd like to take time and heal, grow and find a life long forever girl. One that I'm compatible with and stays forever.
How I'm thinking of doing it:
-Relocating from WA to a cheaper part of Texas, Tennessee or Florida. With the equity of my primary residence, I should be able to buy a paid off house for cash. That will drastically reduce my living expenses.
-Take 1 million cash and put it in index funds or split between Apple, Tesla, Amazon, Google and Microsoft and live off 3% withdrawal rate of about 30K a year. Supplement that with rental income from properties as is, which is about 24K a year cash flow.
OR....
-Still relocate, but cash out refinance 1 million out of the houses before retiring. Between living off index funds and 1 million pulled out of the houses, that money should EASILY last me 10 years, realistically 15-20 years. By then the rents will have risen enough that they will cash flow enough I don't have to cash out refinance anymore for money to live off of. There are some people who do the cash out refinance thing every few years to live off of. Bonus is that it's tax free, it's a loan so not taxable income.
OR....
-Still relocated, use the 1 million to pay off 3 of the rentals, which should give me about 6K a month cash flow plus another 1K from the others that are still mortgaged. Move into a paid off house and retire. I like this because I've always lost my money in the stock market no matter what I've done. Options, swing trading, day trading, index funds, you name it. But real estate I've always made money. It's how I made my 3 million. At this point, I make 1 million a year off of it...so in a year I'll be worth 4 mil, in 2 years 5 mil, etc. At that point I could really retire without worrying. Maybe I hold off for now and grind a little longer. But two full time jobs, two part time ones, 8 houses and all the studying has really worn on me. Add to that endless heart ache from relationships last few years and I'm emotionally done. I want to destress and go live.
Some problems with this:
If I move to FL, TX or TN, I'll be too far to manage the properties. My best friend will move with me but he said his parents could help out. So far I've been doing ok with video tours and hiring contractors lately as a test of managing remotely. Not cheap but way cheaper than a PM. Liquidating them and moving them is risky as I may move somewhere else if I don't like it, or move back. But the properties make it very difficult to relocate since they are easier to manage locally. If I hire a PM, all my cash flow is basically gone.
Edited to add:
My real concern is managing the properties remotely. I'd like to leave them in WA for appreciation. I can live off of index funds 40K a year in a paid off house comfortably. That's really what my question comes down to. What do I do with the properties? I don't want to sell right away and move them. I might not like it at the new place after a year or two and move back or somewhere else.
I don't like the idea of doing syndications only with the money as I have no control. So far video tours and contractors are working well me not having to go to the properties. I intend to try to do that from out of state only having my best friends parents check on them when needed (since he is moving with me).
My hobby at that point will become just dating. My work will be managing my investments and properties remotely.
Also, another consideration I had was rather than putting 1 million into index funds to supplement rental income, I thought about using the 1 million to buy three paid off houses to rent out which should give me an extra 3K a month on top of 2.5K a month from existing properties. Conservatively let's say I take home 5K a month cash flow. with a paid off house, that is no problem for me to live off with plenty of buffer. Mind you I'm still making 1 mil a year off appreciation plus another nearly six figures from principal paydown.
I'd honestly feel better with real estate as I've always had terrible luck in stocks.
But if it wasn't for the rentals I'd be free to travel work and property management free....So then again index funds would give me 120K a year cash flow at 4% SWR or 90K 3% SWR. Then I never have to worry about managing rentals, which is a stressor locally but even more so 3K miles away.
I could just wait one year and hit 4 million NW or wait 2 years and hit 5 million net worth and then I'll have more options.
Last edited:
