Who’s going to be a mogul? In 2009 we were newlyweds with the option of buying a new home or remaining in the house my wife owned prior to our marriage. By this time, we had watched plenty of HGTV and loved the idea of a bigger newer home! I had never been a home owner and would have preferred that we purchase a home together. After discovering Dave Ramsey’s baby steps we knew that it was not the right time to buy a new house. Dave actually recommends that couples refrain from the added stress of purchasing a home until after the first year of marriage. Instead we agreed to update our existing home and created a plan to knock out our debt and save for the kid’s college. Before long we thought why not pay off the house, work at a Subway/Starbuck’s part time and just travel the world!
Two Become One
Combining our finances allowed us to hammer the car notes and student loans. With two salaries we also began to double down on the house. Eventually we started to see a change in the economy. The recession had begun. Americans were losing jobs and homes like hotcakes! Colleagues disappeared from our places of employment. We froze all spending and went back to saving for our six month emergency fund (we already had about three months). We would not be caught unemployed with no cushion. About a year and half went by while we waited to make sure that we would remain gainfully employed. Mrs. Lee and I stood firm on our savings, setting aside every dime we could and bracing for the inevitable. Before long I was called to the front office by human resources. While losing my job was unpleasant, having the emergency fund made the experience a lot less stressful.
Timing is EVERYTHING
Another six months went by before I found a new job. The decision to stay in our starter home paid off big time! Unemployment and my wife’s income was enough to pay our mortgage and other bills without touching the emergency fund. Prior to meeting Mrs. Lee, I had dreams of becoming a real estate mogul. While Mrs. Lee was on board with owning “a rental” the mogul part would require further discussion. After returning to the workplace for a year we thought the timing was right to purchase an investment property. In 2013 interest rates were low, the mortgage was our only debt and we were sitting on a nice down payment A.K.A emergency fund.
We Did It
We began sharing our interest in real estate investing and my wife’s co-worker gave us a book called “The Millionaire Real Estate Investor“. The book was truly an eye opener! We still recommend it to this day. After reading the book we grew even more excited about the possibility of realizing our dream. At this point we had not considered our primary residence as a starting point. We began our search with a realtor and came to the realization that prices had begun to rise. The combination of rising home prices and low interest rates lead my wife to believe that we should change our strategy. Rather than purchase our first investment property, this was the time to buy our next home. At the time, I did not agree. After reviewing the numbers, I began to come around. Our 3 bedroom 2.5 bath starter home in an established neighborhood would make the perfect rental. After 4 years of marriage, we got the newer, bigger home and became landlords with a cash flowing investment property! Yes indeed, 2013 was a good year for Team Lee! Did I hear the word mogul?
Hindsight: We wish we had begun searching for our 1st investment property sooner. Once you know, don’t hesitate. Take action.
Key Takeaway: Understand your financial position and the options available to you.