Thought of an idea on the way to work about ways to leave the workforce
I called it "The Buddy System".
The "Buddy System" would have two people (the Buddies), both who currently work but who want to exit the workforce to generate income off Real Estate full time.
Both of the Buddies have around $150K in equity available.
The Buddies form a Partnership
Both Buddies apply for and get a Line of Credit against their equity.
One Buddy quits work, his name is QuitBuddy (he applies for his LOC first though)
One Buddy stays at work, we'll call him TreadmillBuddy.
The Buddies then have $300K in funds, but QuitBuddy will need to draw down around $50K-70K in living expenses in that time. so we're down to about $230K. $230K in funds should be enough of a float for someone to do at least 5-6 cosmetic renovations and resales in a 12month period.. assuming only 4x$50K profit each (1 every 3months) thats a $200K profit. It could also be quick resales, no renovations, because QuitBuddy is out and about 5-6 days a week looking for deals etc.
At the end of the period. QuitBuddy is refunded his costs of living (say $70K) and then the profit is split 50/50. So TreadmillBuddy gets $65K cash and QuitBuddy gets $65K cash. TreadmillBuddy then quits his job (he's got enough to live on for at least a year) and the pair start to do another round of renovations (TreadmillBuddy might get another LOC first).
One Buddy needs to keep working for at least 1 year so that the living expenses for the pair is $140K in the first year.
Not sure on the specifics.. it seems like a kinda nice idea though! Sort of like Leg-up approach to get over a wall.
Duncan
I called it "The Buddy System".
The "Buddy System" would have two people (the Buddies), both who currently work but who want to exit the workforce to generate income off Real Estate full time.
Both of the Buddies have around $150K in equity available.
The Buddies form a Partnership
Both Buddies apply for and get a Line of Credit against their equity.
One Buddy quits work, his name is QuitBuddy (he applies for his LOC first though)
One Buddy stays at work, we'll call him TreadmillBuddy.
The Buddies then have $300K in funds, but QuitBuddy will need to draw down around $50K-70K in living expenses in that time. so we're down to about $230K. $230K in funds should be enough of a float for someone to do at least 5-6 cosmetic renovations and resales in a 12month period.. assuming only 4x$50K profit each (1 every 3months) thats a $200K profit. It could also be quick resales, no renovations, because QuitBuddy is out and about 5-6 days a week looking for deals etc.
At the end of the period. QuitBuddy is refunded his costs of living (say $70K) and then the profit is split 50/50. So TreadmillBuddy gets $65K cash and QuitBuddy gets $65K cash. TreadmillBuddy then quits his job (he's got enough to live on for at least a year) and the pair start to do another round of renovations (TreadmillBuddy might get another LOC first).
One Buddy needs to keep working for at least 1 year so that the living expenses for the pair is $140K in the first year.
Not sure on the specifics.. it seems like a kinda nice idea though! Sort of like Leg-up approach to get over a wall.
Duncan