Level 2

Home loans

Here's from my personal experience:

1.) Been working since 15 years old, didn't go directly to college.  Saved 20K working retail / living with parents.  Went to community college to knock out as many classes that I could transfer to a 4 year.

2.) Started 4 year college at 21 (in 2005), purchased my first property at this time to live in while going to school for 55K with 11K down payment (2 bed rooms, 1.5 bath apartment - typical rent was ~700, mortgage was ~200.  Still worked while in college to pay living expenses.  Rented out one of the bedrooms for half the typical rent to another college student for 350 / month.

3.) Started career in 2009 near the college

4.) Sold first property for 60K, purchased a better one for 62K (foreclosure - double the sqft to around 1200 - open floor plan, duplex with 2 bedrooms, 2 full bath, a yard, and garage in 2011 at 27.

5.) Moved up in career over time

6.) Sold 2nd property for 92K (yes, a 30K increase in value).  Purchased another property for 200K with 40K down to start a family in 2017 at 33.  This property is a single family home 2100 sqft, 4 bedrooms, 2 bath, oversized garage, 0.5 acres of land fenced in with gigabit internet available to work from home (software developer / security analyst).  It needed about 25K of stuff to fill it.


Savings - Typically I follow the flex 30, fixed 50, saving 20 rule after 401K is taken out of pay.  Example: On $100, 6% to 401K to get full matching, leaves $94, then $94 is split to  $18.8 in savings to create free cash flow, $47 to pay fixed living expenses (mortgage, car, insurance, HOA, Taxes, Base Grocery, Internet (for me it's job related) - things you can't be without), $28.2 in flex spending - things you CAN be without (eating out, extra grocery items over what's needed to live, nexflix, hulu, TV, etc).  If you want to speed up savings, simply tighten down on flex.  Also, take your gross pay and multiply it by 6 to get your emergency fund value.  Build the emergency fund to this number, after that you can use the extra savings over that amount for investment (e.g. safe investments (ETF/Index) or purchasing a rental property or CD etc.. whatever you're comfortable with).  You could also use it to pay off your mortgage faster with principal payments or you could recast the mortgage to allow a larger cash flow ... many options to weigh.  Example if we are in a recession or housing crash - Use it to buy cheap homes or pay down mortgage.  If in a bull market, invest.  I knew some people that had the money sitting in the bank at the last housing crash and made 50K per house they purchased - (e.g. buying for 30K, doing nothing but waiting, and then selling for 80K) - you can rent them while you wait on the market to come back.