Laney's On the Path to Financial Freedom ... Hopefully

I am knee deep in trying to organize our tax information for 2012, so I haven't really had the time to post much that is going on in the Blau family life these days. Lots of time I have wanted to, but sorting through accounting numbers all day long sucks all of the creative juices right out of me. Our financial life is so ridiculously complicated that it takes all of my brain power just to figure out which information is relevant to our accountant who is actually going to prepare our taxes. When I get that information to her ... eventually ... I have a ready made post about my accounting adventures that I'll post. Oh how I hate the tax code in this country!!!! 

Anyway ... 

Yesterday Laney bought her first investment property. That's right. Laney is now a home owner. At eighteen. Craziness! When I was eighteen I was struggling to find money to keep my car gassed up even though I had a good after school job. Thinking of my financial future? Not so much. Luckily for Laney, Herman is her parent, not just me, so she has someone there who gives her ideas of how to maximize her potential for income even at this relatively young age. I don't know many high school seniors who are home owners, so this is a strange thing that Laney has done.

Here's how it happened.

We already are in the investment property market as a family. Herman is constantly looking for low priced homes that our two investment companies can purchase cheaply, but these homes are also homes that have a high enough market value that he starts out already with lots and lots of equity in the homes as well. Then, after fixing them up a bit we rent them out, and the renters actually pay the mortgage for us. Eventually (hopefully in the next two to five years) we'll have these properties paid off, and that rental income will be monthly security income for us. Barring something drastic like Fort Leonard Wood being shut down (a possibility, but highly unlikely) we should be set all through our retirement. (And even if the post closed, the worst thing that would happen would be that we would have to start over investing since we would not hold any loans to default on).

In the process of looking for these good deals, Herman found a five year-old trailer being sold. The guy selling it had just gone through a nasty divorce, and he just wanted the thing gone. Herman made an offer with the promise of being able to close quickly. Since we have a good personal relationship with our bank, we could make this happen, so the guy agreed. He was able to purchase the trailer on a large country lot that actually has hookups to add a second trailer if we want for only $20000. A steal really. The land itself is worth that much. At that price with the potential equity, Herman thought that it would be the perfect property for Laney to buy for investment. She had the money saved to use as a down payment, and because we would co-sign for this first property, she would be able to get a loan relatively easily. 

Yesterday Herman and Laney headed to the bank and closed. I wanted to get a picture of them closing, but Minsy was asleep at that time, so I stayed home. But Herman got a picture of her at the front door of her new investment.

Isn't she cute?

The trailer really is a cute little place. She'll be able to charge enough rent to make the payments as well as pay our property manager to manage it for her while she is away at school or her mission. The loan is actually a five year loan, so she won't really be able to make enough income on it to pay for her mission since the payment is so high, but it'll be paid off by the time she is 23 (maybe sooner!), and after that it will be pure profit for her. Hurray!

Herman's plan is to help each of the kids do this if they choose. It was so, so hard for us to get our first home loan. Really it was hard for the first two. We struggled. We didn't have any help from anyone. It all worked out, but it does not have to be that difficult. We have years of experience to guide us now, and we hope to help our kids to gain that knowledge sooner, rather than later. We didn't pay for this house for Laney. She is responsible for payments ultimately. She paid the down payment and will pay the management fees. The advantage for her will be that she will be using her money in a way that will ultimately benefit her. She will be gaining a good knowledge of how credit works. Hopefully seeing her money potential grow will help her to make good financial decisions in her future as she plans for how to use her money.

I am super grateful to be married to a man who is basically smart about money. Not perfect. We have made some missteps along the way, but ultimately our decisions have been made in order to better our financial outlook in the future. These properties that our companies own will give us the financial freedom to do whatever the Lord has in store for us, and I say, the sooner the better. This path has been a long time in coming. We have had enough ups and downs along the way to last a lifetime, but we are in a good position, and that gives me peace in a world that seems to be falling apart around us. Thankfully (and hopefully) our kids will be able to benefit from the knowledge our experiences have given us and get on the path to a solid financial future much sooner. Life is good!