With my employer’s local office closing and my new commuting requirements, any thoughts of living in the corporate world longer than absolutely necessary were now buried and that body was ice cold. I was now seriously planning my retirement despite being in my mid-40s. I never planned to sit on my bum or retire to a golf course or beach; I only wanted the freedom to decide what I could do, when I wanted. More importantly, I wanted to be there to see my kids grow up and help them with education and life. They were coming up on their teenage years, and as all parents know, this would be a critical time for them. The more influence I could have and guidance I could offer, the better off I figured they would be.

I started envisioning what I would do with my retirement. Maybe start a house flipping business to help add to retirement funds while offering a ton of flexibility and I would decide if I want to take on a project or take months off at a time. I’d have time to play guitar again, something I hadn’t dedicated much time to since the 1990s, and I could write my own original music. Since our kids were home-schooled, I would be home to help teach them. Most importantly, I would get to map out each day rather than having a 50-hour per week work commitment, hopeful that I get some enjoyment out of the upcoming weekend. Friday nights were usually spent resting and trying to unwind from the week, either Saturday or Sunday was used to catch up on errands that I didn’t have time to do during the week, and Sunday nights I’d spend being disgusted that the weekend was ending and obsessing about tasks that needed to get done the coming week.

I had already started making the changes needed to dig my way out of debt again, but this time it wouldn’t be a slow dig. It would be as fast as possible and by any and all means necessary. I had already bumped my 401k contribution up to 10% of my salary, the car loans and high insurance that went with them were gone, and I now owned some stock outside of my 401k as an employee/owner at Golder.

My new hero, Mr. Money Mustache was again there to coach me indirectly, and his blog entry “News Flash: Your Debt is an Emergency!!” (https://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/) hit me hard. Yes, my debt was, in his words, a “HUGE, FLAMING EMERGENCY!” I considered using 0% credit card offers and getting a personal loan, but neither of these would be quick enough for my goals; I wanted out of debt yesterday, and I still had student loans to contend with. Then, I started researching the 401k loan option.

I know a lot of people are apprehensive about this, but for me at the time, it made too much sense. I could borrow from my own savings and investments, pay it back with interest to myself, and be out of credit card debt immediately! I’d lose out on the gains while the money was out of my 401k, but with average increases of 401k investments in the neighborhood of 10% annually and credit card debt interest at over 15%, it made sense to take a hit of 10% on my investments to stop paying 15% against credit card debts.

So, I pulled the trigger, and got a $22,000 loan against my 401k to pay off my credit card debts. Paying off those debts was an amazing feeling that I hadn’t had in a very long time! Overnight, my debts were reduced to the 401k loan, student loans for my wife and me that totaled about $380 per month, and a mortgage of just under $900 per month. More than ever, we had plenty of cash flow to wipe out debt with a quickness.

Since buying investment properties was again an option, I was able to convince my wife to get her real estate license to help with our future investments. If we started buying investment properties, we’d get a kickback of a couple percent from each house purchase with her acting as our buyer’s agent. Plus, any commissions she could earn in the meantime with other clients would help pay what debt we had remaining. Those commissions helped… a lot. By mid-2016, only a few months after becoming a Realtor, she sold her first house and we got that first commission check. Later that year, she had another commission. In early 2017, another commission.

It only took a year, and between our improved cash flow position and real estate commissions, we had paid off both the 401k loan and my student loan. While these were being paid off, we were looking at investment properties, both with rental and flip potential, but none met our standards for profit potential. We toured and considered offers on a few, but they were either under contract or had an offer coming in that was higher than we were willing to offer. After a year or so of aggressively looking, in mid-2017, one fell in our lap. A friend called me and explained that she was moving out of her family’s property, and that it would be available for sale if I was still interested in an investment. Hell yeah I was interested!

I knew the neighborhood well since we had friends that had lived there for 15 years. We made an appointment to meet the owner and see the house. It definitely needed some love, but other than potential damage to the roof at the back of the house, it had good bones. Nothing major had been upgraded since it was built in 1950 including windows, siding, kitchen, bathroom, flooring… okay, it needed a lot of love! We went home and made two lists with estimated costs. The first list outlined what it would need to be marketed on the Multiple Listing Service (MLS) with my wife as the seller’s agent, and a second list that outlined what would be needed to flip the property and resell after rehab. We then arranged a follow-up visit at the house to review what we came up with. We then outlined two proposals based on those estimated costs, the first assuming my wife listing the house for sale on the MLS and estimated net proceeds to the owner after some necessary repairs. The second proposal was an “as-is” cash offer considering the repairs needed plus upgrades we would want to make to do a proper flip, to fully upgrade it to a modern home. Honestly, our cash offer was higher than we would have made if we hadn’t known the owner, but it was a price we were both happy with and a deal was made! We arranged closing for a couple months later in September.

The stage was being set for my retirement: we had no credit card debt, my student loan was paid off, we had a small mortgage of $900 per month along with my wife’s student loan payment of $200 per month, and were in the process of buying an investment property that we planned to flip. This was in addition to the rental property we still owned and my rapidly growing 401k with 10% of my salary being contributed.

Oh, yes, the rental property we already owned. We had refinanced it in 2008 into a home equity line of credit, one that was going to have the payment go from an interest only payment of about $600 monthly, up to about $2400 per month to pay back interest and principal since the 10-year HELOC period was ending. We had warned the tenant that this would be upcoming by late 2017, and that we wanted to sell the property, but it was time to reach out and remind them of the impending change. After a few discussions with them that included the price and timeline, they said they would be buying the house, something they planned when they first signed the lease. I put them in contact with a mortgage broker and asked them to get everything lined up over the next couple of months and I would contact them in November to set up a closing.

As the closing date of our new flip approached, the reality hit; we were about to own 3 houses! Even though this would only be for a relatively short time, it seemed a bit scary. That said, we had plenty of equity in our properties, a bunch of available credit to help with the flip (considering all our credit cards were paid off), and a 401k to fall back on if finances got really tight. This was scary but also very exciting! Retirement from the corporate grind combined with real estate investment was in our near future, and I was stoked. We were about to find out though, as with other things in life, the roses you’re smelling could be masking a big pile of you-know-what.