32 years old in MCOL area with solid IT job of 7 years.
Salary: $80K
Net monthly income: $3600
Leftover after rent and bills: $1000
Roth IRA, HSA, employer 401K match all maxed
$15K in savings. Assume my mortgage would be the same as what I’m paying currently to rent.
Have a leased Lexus and I’m handing back the keys in June when the lease ends (which will free up $600 in extra cash flow per month). I’m also living in an apartment and the lease ends in July.
Scenario 1) I can go out and buy a $10K Toyota in cash and have $5K as a small emergency fund while I build it back up using the extra cash flow. Sign apt lease for another year while I build up my savings again to put down on a house/duplex later.
Scenario 2) I can take that $10/15K and put it down on a duplex now and house hack. Build equity and have a home secured for the future. Eventually buy another home and rent out the 2nd part of the duplex I was formerly living in for cash flow and extra equity.
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Thoughts on each scenario:
Scenario 1 - I’ll have a paid off reliable car for years to come and increased cash flow to build the e-fund up faster. But the downside is that I continue to rent.
Scenario 2 - an FHA loan allows me to put $10K down to secure a home (another $5k in savings for maintenance), build equity and create extra cash flow in the process. Downside is I wouldn’t have much for a down payment on a car so I’ll be paying a higher monthly payment and have a car that is not close to being paid off.
What would you guys do in my circumstance?
Submitted February 04, 2020 at 10:58PM by DS_Gen50 https://ift.tt/31qLAyh
