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  • #31
    The new house would also be a house my mother would retire in. I want to rent out her current house and buy and new house for her to live in an take care of. After 20-30 years it’ll just be another asset afterwards. But I do agree that I need to be able to manage it and will require due diligence on my part.

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    • #32
      Originally posted by Molarr View Post
      The new house would also be a house my mother would retire in. I want to rent out her current house and buy and new house for her to live in an take care of. After 20-30 years it’ll just be another asset afterwards. But I do agree that I need to be able to manage it and will require due diligence on my part.
      That just makes the idea worse. What's wrong with her current house?

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      • #33
        Why would that be a bad idea? Honestly, I thought it would kill two birds with one stone. Current house neighborhood has gone downhill. This isn’t gonna be rushed, probably sometime in 2020. I already have her on payroll $15k a year managing my social media. The current house mortgage with hoa/taxes/insurance is about $800/month. The area rents for $1500/month. The rental income could pay gig current house and supplement new house. Any shortfall can be covered by the salary I’m already giving her.

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        • #34
          Originally posted by Molarr View Post
          Why would that be a bad idea? Honestly, I thought it would kill two birds with one stone. I already have her on payroll $15k a year managing my social media. The current house mortgage with hoa/taxes/insurance is about $800/month. The area rents for $1500/month. The rental income could pay gig current house and supplement new house. Any shortfall c sac n gff red covered by the salary I’m already giving her.
          There's so much more that goes into being a landlord than making sure you can rent it out for more than the mortgage cost. With all due respect, your reply demonstrates a lack of knowledge of being a landlord. You're right, though, rental income COULD pay the current house and you could make some money. You COULD also lose money on it. You may have difficulty finding a tenant, you may need a new roof, the HVAC may go out, the water heater may start leaking and cause a huge mess, etc. Houses cost a lot more than just the mortgage, insurance, taxes, and HOA. I'm just a random guy on the internet but you don't sound ready to be a landlord.

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          • #35
            I’m gonna have to do something. Either rent out the current house or sell it. $100k is still owed and could probably sell for $250k. Then I’d have to figure out what to do with that money if I choose that route.

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            • #36
              Originally posted by Molarr View Post
              I’m gonna have to do something. Either rent out the current house or sell it. $100k is still owed and could probably sell for $250k. Then I’d have to figure out what to do with that money if I choose that route.
              I'm still confused why you have to do something. Your mom already has a house and place to live. Either way, I wish you the best of luck.

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              • #37
                Do you have siblings? The issues with buying mom a house, paying for utilities and HOA fees, managing her old house and collecting rent & paying expenses, etc. are quite a mess. Add in any food, long term care, nursing home, personally visiting and helping. Then see if it's a perfectly even split in the eventual inheritance.

                There is so, so much potential for mistrust and misgiving in the family over the next decade or three. Tread extremely carefully.

                The situation you're describing is just about as far away from a purely business-minded investment in rental property as I can imagine. The mix of downside risk and upside potential just doesn't look that good.

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                • #38
                  Seriously how much disability and business overhead expense insurance so you have?

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                  • #39
                    I have 3 disability policies. Two guardian and a standard plan. I don’t have overhead insurance.

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                    • #40
                      Dentists need a lot of DI and BOE. It's a physical job and you're a business owner. All your investment and loan repayment ideas fall apart if you can't produce. There are good plans available through the ADA.

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                      • #41
                        Originally posted by CordMcNally View Post

                        I'm still confused why you have to do something. Your mom already has a house and place to live. Either way, I wish you the best of luck.
                        I think the confusion for CordMcNally (and the rest of us) is that you do not seem concerned about the $1.4M of debt. It gives me heartburn just to write that number. Can you pull out your tax returns and see what the interest was that you paid last year? That is money just gone.... yes, you may have gotten back ~30% in taxes but you had to pay 100% to get the 30% back. Not smart. Also, a lot of us understand what it means to be out of debt or close to out of debt.... and what that means to building wealth. You are not close to this yet. My only debt is my mortgage and very small mortgage on a rental property (our old house that we kept). This bothers me. That is good. Your caviler approach to your debt is frightening.
                        Please take this to heart, maybe listen to some Dave Ramsey (since he is so anti-debt, maybe he will make you understand) and start working on that while saving for retirement (I would not do the "baby steps" but have you treat the student loans as priority while saving 20-30% and get those student loans done in the next 3 years). I would not take out a mortgage for your mom but you could sell her place and buy a $150K place for her, would that work? Pay cash, you don't have to worry about her paying for it and she will be safe and set.
                        Good luck, with whatever you choose.

                        Oh, by the way, I bought "Fire Your Financial Advisor" and would recommend the content for you.
                        Last edited by SLC OB; 12-07-2019, 07:27 PM. Reason: typo

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                        • Molarr
                          Molarr commented
                          Editing a comment
                          With the current landscape of dental school debt ran amuck by greedy private schools and a flawed government loan system I’ve taken a new approach to how I view money. I think in order to build wealth it’s important to be able to manage debt. The practice and real estate loans don’t bother me because those are just gonna increase in value as I build equity. That $450k I made was after the loan payments. They are both at 4.5% as well so not too bad. With the student loans I’ve been able to avoid paying more than $500/month up until now through the repaye forgiveness program. Instead of paying my loans the first three years I was able to use that extra cash to put a down payment on my office and real estate. This led to even better income potential compared to my associateships. But now since I am making more I won’t benefit from repaye so I’ll have to refinance. I will do some due diligence and get educated on my nexts steps, but that is pretty much where I’m at now. I’ve only accumulated about $50k on top of my principal since I graduated 4 years ago. With repaye the government was paying a portion of the accumulated interest. It’s a great tool if you know how to hack it.

                      • #42
                        •Invest in a new social media manager, your mom will be just fine in her new job. She seems pretty level headed, so why not cut her loose while you get your act straightened out.
                        •Once a quarter have a sit down with your CPA, the one that you have set you up the accounts for all the retirement accounts he can figure out.
                        write out the amounts you need to deposit so 35% of your net hits the retirement accounts. Yes, probably need a taxable. Just use 3 funds with each.
                        • Sounds like your in good shape with DI policies. Three, wow. Might want to check on the amounts though. Call your DI guy and just make sure your close to the max you can get. Amounts matter.
                        • Keep $50 in an Efund, dump ALL the rest on the loans.
                        • You job is to make money, not solve what I think is coming down the road. More issues! Don’t even spend the time noodling them. The answer is no!
                        Do your job, pay your taxes, save that quarterly retirement and payoff those loans.
                        • Mom will probably welcome an early termination notice for Christmas. She didn’t like the social media gig anyway. Pay wasn’t much.
                        Probably talking trash about how cheap you are anyway.
                        The above is sarcastic of course. But it’s probably your best path anyway. Stay on the path. Pretty easy.

                        Comment


                        • #43
                          Yes I meet my cpa quarterly. I see him next week so I will bring this to his attention. I will bring up the 401k plans and Roth. I think he mentioned a lot of what you all talked about before. It’s just up until this point I was so preoccupied about other things like accumulating a buffer for the practice bank account and keeping the office growing strong. Fyi I bought/overpaid this office it was collecting about $400k a year in 2018. This year, 2019, I grew it to about $1M in collections. So it’s been a crazy year.
                          And honestly the social media job isn’t serious and mainly a way to give her money monthly. I actually have a marketing company do a lot of it already. She does work another job as well just cannot earn a lot. I have two other siblings so we all contribute. I know this is baggage but it’s the hand we were dealt.

                          Just trying to get the most bang for my buck

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                          • #44
                            Originally posted by Molarr
                            With the current landscape of dental school debt ran amuck by greedy private schools and a flawed government loan system
                            You're pulling in $1,000,000 per year because of these terrible systems.

                            __________________________________

                            Originally posted by Molarr View Post
                            Yes I meet my cpa quarterly. I see him next week so I will bring this to his attention. I will bring up the 401k plans and Roth. I think he mentioned a lot of what you all talked about before. It’s just up until this point I was so preoccupied about other things like accumulating a buffer for the practice bank account and keeping the office growing strong. Fyi I bought/overpaid this office it was collecting about $400k a year in 2018. This year, 2019, I grew it to about $1M in collections. So it’s been a crazy year.
                            And honestly the social media job isn’t serious and mainly a way to give her money monthly. I actually have a marketing company do a lot of it already. She does work another job as well just cannot earn a lot. I have two other siblings so we all contribute. I know this is baggage but it’s the hand we were dealt.

                            Just trying to get the most bang for my buck
                            A lot of details seem to be coming in piece by piece. I would recommend you provide a more comprehensive listing, in 1 post, of all current incomes, assets, debts, expenses, siblings, etc... And what your goals are. I'm honestly lost in the details at this point. But I should be sleeping instead of posting & eating Taco Bell.

                            I love WCI forums. But you if you get a comprehensive post together, Bogleheads forum would also be a good place to cross post & ask questions. But I think you may get a lot of the same answers you have been getting here already.

                            Comment


                            • Molarr
                              Molarr commented
                              Editing a comment
                              Ok here it goes.
                              Personal Assets non-retirement
                              ~$220k cash in savings
                              ~$32k in stocks

                              Retirement accounts
                              $50k in a vanguard target fund, this needs to be revamped I know
                              $10k previous job ira
                              $27k from previous sep from associateship

                              Practice account
                              $75k buffer at all times
                              $60k credit line available

                              Debt
                              $500k student loans, on repaye. will refinance and aim for 3.5% or lower
                              ~$600k practice loan 4.5%
                              ~$300k practice real estate loan 4.5%

                              So, from what I've gathered this is my gameplan
                              - create a 401k and roth asap and funnel about $60k into there
                              - I am probably not gonna offer health insurance to my staff as I would rather increase their pay and wait for a few years for the office to mature before added that benefit.
                              - refinance the student loans and put a $100k down bringing it to $400k a new lowered interest rate.
                              - I pay myself salary about $8k/month pretax which comes out to about $6k after tax. From this $6k I pay for my cost of living and fun expenses
                              - remaining monthly profits are going to be split 20% liquid savings, 20% some investment and the remaining 60% towards student loans.
                              - I am gonna put the new investment house on hold, I don't want to be spread too thin.

                              so from my ($220k cash)- ($60k retirement investment) - ($100k towards student loans) will leave me at $40k liquid cash I can keep as an emergency fund. from here I can continue building liquidity monthly while paying off the loans and investing. As my liquid gets higher and higher again I might just lump sum payments into the student loan or use the excess towards something else.

                          • #45
                            “You job is to make money, not solve what I think is coming down the road. More issues! Don’t even spend the time noodling them. The answer is no!
                            Do your job, pay your taxes, save that quarterly retirement and payoff those loans.”

                            That is the most bang for the buck. But I guess you already had that one figured out!

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