174: Finance Friday: Reaching Semper FI (Financial Independence) Before Retirement with Fabio

BiggerPockets Money Podcast

BiggerPockets

Investing, Education, Business

4.6 • 2.9K Ratings

🗓️ 26 February 2021

⏱️ 75 minutes

🔗️ Recording | iTunes | RSS

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Summary

Real estate investors are known to have their hands in 20 different pots, this is doubly true for Marine and real estate investor Fabio. Fabio is a Captain in the Marine Corps and has been in service for the past 21 years. He has at least five years left before he wants to retire, but is poised to hit his “freedom number” (or what others call their financial independence number) soon.

Fabio has rental properties throughout the country: a duplex in San Diego, a house in Arizona, a BRRRR currently in the rehab stage in St. Louis, and his residence in Illinois. The problem? Some of these properties aren’t cash flowing as much as Fabio would like. He also has a high interest hard money loan on the BRRRR property he is rehabbing, plus a loan taken out against his retirement account.

This presents a handful of different options: should he sell some of the houses that aren’t cash flowing in order to pay back some of the high interest loans or wait to refinance? Which debt should be taken care of first? How can he leverage his current assets to help him build a bigger real estate portfolio.

If you’re a long-term real estate investor, you’ve probably been in a dilemma like this before. Stick around for all the lucrative options Fabio can use!

In This Episode We Cover

Keeping monthly expenses low (especially if you’re about to retire)
Taking advantage of the equity you have in different properties
Coming up with a “Freedom Number” then shooting for that goal
What to do with houses that aren’t cash-flowing
Taking out loans from a 401(k) or TSP account
Which loans to pay off first (depending on time and interest rate)
And So Much More!

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Transcript

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0:00.0	Welcome to the Bigger Puckets Money Podcast, show number 174, Finance Friday edition,
0:06.0	where we interview Marine Corps officer Fabio and talk about real estate,
0:10.5	burying and paying for college.
0:12.6	I've been trying to figure out how to get to this fine number because I don't necessarily
0:18.0	want a giant real estate portfolio, just a couple properties to kind of support it.
0:22.5	I was thinking if I can just do one property every eight to nine months with my own money,
0:27.2	then over the next five years I'll still accumulate a few.
0:30.5	Hello, hello, hello, my name is Mindy Jensen and with me as always is my
0:34.1	low-hanging fruit-slaying co-host, Scott Trent.
0:37.5	I don't know how you always produce these great intrasmity.
0:43.4	Scott and I are here to make financial independence less scary,
0:46.5	less just for somebody else, to introduce you to every money story because we truly believe
0:51.6	financial freedom is attainable for everyone, no matter when or where you're starting.
0:56.0	That's right, whether you want to retire early and travel the world, go on to make big-time
0:59.8	investments in assets like real estate, start your own business, or figure out the path to
1:04.4	retirement on a military pension, we'll help you reach your financial goals and get money out
1:08.6	of the way so that you can launch yourself towards your dreams.
1:17.2	Scott, I am super excited to talk to Fabio today.
1:20.4	During the course of our conversation we will talk about real estate because that is one of
1:24.4	the methods that he is choosing to pursue financial independence. He also gets some advice
1:31.5	from the CEO of bigger pockets, the real estate investing social network that says maybe real estate
1:37.9	empire isn't really what you need unless that's what you choose, which I thought was very
	...

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