423: Burned Out? How to Quit Your W2 Job and Still Achieve FIRE

28:33Yeah, definitely. Have you guys given any thought to what you would do after you leave your current jobs? like for income, would you consider switching employment? Yeah, I think so. I think that's kind of where we're at. I mean, I would love to maybe transition as the full-time, be employed full-time, and Trevor would love to be a stay-at-home dad for a while. We're just kind of in that weird spot where do we leave his high-paying job now Or do we try to stick it out a little longer? His background is not as friendly. I mean, his work experience, he's military, private contracting, nonprofit, and now at a coal mine.

29:25So it's kind of like a weird hod podge of experience. Mine is in graphic design. So it maybe could be more marketable. However, I've been out of the workforce for a decade. So that's also very intimidating. Have you given any thought to doing anything freelance? So I do have like a very small amount of freelance work. But yeah, that I suppose would be very flexible. So that would probably be a good place to start. Getting clients is also quite a bit of work. So I think that's where I haven't had... I've been putting all my extra time into the rental business and growing that. And so I don't really focus on any of my own paid employment.

30:17So ideally, I'm just trying to get a feel for what you guys would really want to be doing. And ideally, would you... I'm trying to think the best way to word this. Would you want to be flexibly employed, maybe managing several short-term rental properties since you mentioned that that's something that you enjoy? And then have your husband to work, maybe be able to come home more often, have a less stressful job with more regular hours? Would that be like a solution that would kind of work for you guys or to be able to move you in the right direction? Because it sounds like we need to find kind of a medium ground because there's no like, we need to quit right now, go do the real estate or quit and just go do graphic design.

31:03But it takes, you know, there's some lead time for that. So like, what's a transition possibility? Or how How do you see... The graphic design is a good option. But when you were talking earlier, the fact that you mentioned that you enjoy the short-term rental piece, and that those are cash flowing, and that you'll probably get better at managing those over time, that maybe that's something that you basically already built clientele, or maybe you have some experience and you're not 10 years out of that workforce. You're fresh and you're in it right now and you know how to do it. Is there a possibility that you could focus more on that?

31:39And even, I don't know this multifamily property, how attached you guys are to it. You're going to refinance and pull the cash out of it. Is there any option that you would want to unload that one and to do short-term rental properties? And I'm not trying to push you short-term rental, but I'm just trying to get you to think through what would your ideal situation be that's not like we're retired. But from a working, continuing to make some income situation, what would that look like? Yeah, I think you're close for sure. I mean, if I had a small part-time job and my husband had a small part-time job and we kind of flip-flopped and then also worked on a new property or acquiring a property, we did a lot of the work ourselves, DIY.

32:26We totally enjoy that and love it. But I think just a little more balanced where I'm not parenting to where I'm exhausted and he's not working to where he's exhausted. I think the scariest part is the cost of properties right now has skyrocketed as well as the rates. So it feels I mean, I've been watching a market in Florida for months and months and months, and I just none of the numbers work. And that may be just the MLS listing as my strategy. That's not going to work. But yeah, I would love to have, like I said in my goal, double the short-term rental income for sure. Do you see any way to double it without doubling your rental property counts?

33:18Let's look at the short-term rentals that you do have. Are they close to any of the attractions that are in St. Louis? Could you make them into a destination? There are some really great short-term rentals out there that have, like they cater to bridesmaids or what is it? The bachelorette parties, or they cater to hunting or they cater to football games or they cater to all these different things. Can your unit cater to something or several somethings that would make people want to go there? And even better, take pictures while they're there so other people can see them too and want to go too.

34:00I don't know that the two houses that we have in St. Louis could gross much more. They're pretty small, so they're limited with number of guests we can have. We would not advertise for parties at the house. or big groups. But I mean, my husband and I love that idea. We would love to have these really unique Airbnb rentals to basically entice people. But I think more rural is going to be where that's at, getting a way out of the city where there's not going to be all these regulations and neighbors to make those unique stays. And we would love to invest in that. We just, I think feel maxed out on our time to explore how to like get acquire a property that could do that.

34:54How much equity this, this fiveplex, this fourplex fiveplex. I'm just like zeroing in on this. Not that I want to like eliminate it, but I, but I want to make sure. So I had, I was talking to Mindy and Caitlin before we got on here that I had had a few bad experiences with some fourplex properties. And where they were bad investments. I'll just completely say that. And where there was a lot of cash that went into them. So when you have less control of a property, which it sounds like you have a property manager doing this property, it allows for some of the expenses to creep up a little bit more.

35:35And maybe you can't force as much equity. Although you're adding the fifth unit on this one, right? You're bringing it from a four to a fifth or you already have? Yeah, it's nearing completion. So it should be filled in the next couple months with the tenant. So when you're pulling the... How much cash are you expected to pull out of this when you refinance it? Well, I have not had always the best luck with appraisals, but I am certainly hoping for around$300 ,000 out of the property. So a value of around 375. We bought it for 205. So I basically, I want all my cash, my original cash out plus what we put in to make that fifth unit.

36:19So 300 in cash. So let's just, let's say 250. Let's round it way down to 250, which is not ideal, but that'd be great if you got the 300. But so, so now what are your plans for that 250? Do you have any plans for that? I mean, I wanted to go ahead and pay off the HELOC for now and just use that as a backup. I mean, no reason to pay interest on that when I'm paying high interest on the property. And then, yeah, we basically want to do another short-term rental. We were hoping for warm climate. So that's why I've been watching Florida because we have very long winters. They're about 10 months long where I live.

37:00Feels like it. And I also just want a rental where it's going to be safe, not going to be shut down when the neighbors decide they don't like them anymore. So we wanted a vacation destination. So that's where I've been watching. And then just having some leftover as flex to possibly look for opportunities to buy another property. I think the thing that I'm seeing maybe, and it's just like, maybe if we look at your situation currently of not enjoying the jobs, you know, like that, as far as like where life is sitting right now, the burnout in parenting and the burnout in work and the days and nights the husband is working.

37:48I would probably focus more or try to think more about like, what can that 250 ,000 do to change that situation? Like, does that allow for a better job to be taken to make it through? I mean, your kids, your kids are, you told me earlier, two, four, seven, and nine, like some awesome ages for kids, young, precious ages. And maybe these funds are funds that you use to kind of bridge a gap of taking in some employment that maybe pays less, but allows some sanity and some family life back in. And if we come all the way back to your house hacking currently, correct? In a duplex where you're living in one side and rent out another one.

38:31Maybe you make it something as simple as you move out of that one. You turn that into a midterm rental like you were talking about. And maybe you do another house hack. But because you do these little stacks and you have this big chunk of cash. You can get a better employment situation, better family life. And at the same time, slowly build a couple doors, not necessarily taking that 250 and throwing it just towards another short-term rental somewhere in Florida, which would be a good long-term investment. But you've got some more family lifestyle needs right now, which are important. And you guys have done a good job.

39:08You've got some real estate here. You've done a good job of building some stuff up. you really have. And maybe it's time to take care of your young family for just a little bit and not focus so much on like fire. Let's get financially independent. Maybe you need to just become like, well, I don't know what you would call it, time independent a little bit, or like give yourself some more breathing room so you can feel like a family and make good plans. And maybe you move a little slower, but you're sane and happier along the way. I really love that perspective, Kyle. And it has taken me a really long time to embrace this stepping back mentality.

39:48And I hope that Amanda at a younger age can figure that out way earlier than I did. I'm looking at these numbers for the fourplex. And it looks like it was bringing in$1 ,420 a month when it was a fourplex. But because you're pulling money out, because you're refinancing into a higher interest rate, adding that fifth unit is going to reduce your income to$400 a month. If you sold this property outright, you would owe taxes and depreciation recapture. Have you done the math to see if it's worth keeping versus letting go? I don't think I have really because in my mind, it's a burr. So if it exists and it pays for itself, it felt like keeping because we'd be getting out, I guess, maybe 50 ,000 more to sell it outright.

41:01but no I haven't I don't think I've tossed that around too much because I was like well if I don't have to deal with it and it didn't cost me any money why not just keep it and then someday I could refinance and cash flow a little better or or run the property managers raising the rents a lot compared to what I did and so that that will help they'll they'll continue to go up But yeah, we should think about it because I definitely don't love it. I would just look at the numbers. It can be an emotional decision. Oh, I bought this. I'm going to continue down this road. But numbers are facts. There's no emotion involved in numbers.

41:45So just look at, and maybe the numbers say, no, you should keep it. Or maybe the numbers say, now's a great time to get out. go down to Florida, buy a duplex down there and house hack down there and medium term rental, the other side of your duplex, maybe you're making more money that way. Or then you're getting out of the 10 month winter. I used to live in Wisconsin. I totally understand not wanting to be in that winter. You get the sun, you get time back with your husband because now he's not working those crazy swing shifts, which are horrible. And whoever invented them. I hope they had to work them too.

42:23He could look for a job because you've got this cash from the sale of the multiplex that you are taking down there. It's not an immediate need to go get a new job. On the other hand, the numbers might say it would cost you money to sell this property, so don't do that. So just taking a look at those numbers, running them, having a conversation with your husband? What do you think of these two options could give you more clarity on what your decision should be. But you don't love the property and it's got a lot of money sitting in it. So something to consider. You said you purchased that property during COVID because of COVID, because short-term rentals made you more nervous.

43:10So you just have... Maybe also keep in mind your decision-making, there's some emotion involved in that decision. I don't think that's bad emotion. I actually think that's pretty smart because that's diversifying. But you could also... If you ended up selling that property, you could diversify and house hack more and have more long-term rentals or long and mid-term rentals, but in a slower process. And your logic is right as far as if you're burying it and you can pull the property out and it makes sense numbers-wise to just leave it there. It's almost like a free property, but not technically because if you can get more cash out and do something better with that cash out by selling it, but there are also expenses to selling it.

43:51So take all that into account. This is a question that I should know the answer to. Is there a limit on the number of VA loans that you can have? Yeah. And I have tried to understand that a little bit, but I don't know that we could do another one. Maybe there's a threshold and it depends on where you live. about how many you've taken out. And each time you take it out, it applies to that threshold. It's called eligibility. And we also, you can't keep houses that you have used the VA loan on. So I think if we tried to do another one, we would probably have to sell all of the houses. But it may be depends on the lender.

44:39It may be depends on the VA person that they're connected to. It's like the most complex, complicated... I don't know. I don't know that I could use it again unless we got rid of our first house, the first short-term rental and the duplex. Okay. Yeah. This is a question. It's a product that is very unique and only some people can use it. So if you can use it more, that would be a whole other house hacking thing to check into. But I really don't know the rules behind it. Yeah. I mean, if you were to live in Flip, and snowball that two or three times, that would be the smartest way, I think, to build a real estate empire, to keep rolling your equity into a new property and then a bigger property.

45:25But because we did buy and holds, I think it was not the best strategy. And you just don't know that when you're 25 and getting your first house. I think you have a great opportunity in this asset that you have of this five plex that you're either cashing out or selling. Say there's$250 ,000 to $300 ,000 that you can do something with to change your life situation. Most people would not have that option right now. They might be in a situation similar to yours like burnout. It sounds like I'm 38. So I'm right in the same age bracket. And this is the age when the kids are little, The jobs are busy and it just is intense.

46:11So if you have a way to mitigate that, be careful with this little nest egg that you have and really think through what decision with that will make your life better and improve your long-term goals. You can buy another good property somewhere that cash flows and you reinvest it in that property and it builds for the long-term. That's great. But that doesn't do anything for your current situation. Try to think through a way that you can use this money to improve your current situation, whether that means that you live off of$10 ,000 of it for 3 years. You put$10 ,000 towards your budget each year from this$250 ,000.

46:50That's not a crime. It's totally fine to do that. And you invest the rest of it in something. Say you live off of... You take$50 ,000 of it and use that to live 3 years plus some part-time jobs. You can do a lot of different things. Don't think that you have to use all that money to reinvest it, to build your wealth. And then otherwise, it's not going to be okay. Your kids are... Some people say you've got 18 summers with them, and you don't get those back. So if you can invest some of that... You guys have done a good job of investing in these properties and have built some things up. And the fact that you bird something and you'll be able to pull out this amount is really good when you're at age 39 and 40.

47:32That's awesome. So take that opportunity to make some decisions that will change maybe the course of your life for the next 10 to 20 years for both you, your husband and your kids. So we don't need to obsessively look for a high ROI property at this moment is what you're saying? A CFP, but I'm not your CFP. So I can't give you specific advice. But that's what I would do. If I was in your situation, I would be looking for a way to relieve the stress on the family because the other stuff, you already know how to do the other stuff. You've been doing it. You're not perfect at it, but nobody is. And that stuff will come.

48:07But try to think through how can I knock both of these goals forward at the same time. But 10 or 20 years from now, you're not going to be like, I'm glad I just burned out for another 10 years and invested in this Florida property. That was great. You're not going to say that. You'll be glad I spent more times with my four kids and we got ourselves in a better situation mentally and physically, that's where you're going to wish you had done that if you don't do it. That's my personal opinion. If you can't tell, I feel a little strong about it. Okay. No, I love it. I think that's helpful. Thank you.

48:40Yeah, Kyle, that's coming through loud and clear and I love it. You're absolutely right. I saw something online the other day. It said, your boss won't remember that you worked late and missed your kid's recital, but your kids will. And I was like, oh my God, that makes me feel so horrible. But absolutely true. And if we look at changing jobs, if we look at a Florida move, this pie in the sky idea where he quits, you quit, You move to Florida. He gets a new job. You're now staying at home full-time or you get a full-time job and he's staying home with the kids full-time. That gets rid of childcare, which is a$1 ,300 expense.

49:28Maybe you get better health insurance and that reduces your healthcare plans. Maybe you get different grocery shopping. When you are high stress and everything is always last minute, you're going to the grocery store and just grabbing something. You're going to the restaurants and just grabbing dinner out. The travel, you're already in Florida. You just drive to the beach. Every day you drive to the beach. It's awesome. I can see a lot of opportunity to reduce some significant expenses on a monthly basis. I can see you cutting out$1 ,500,$2 ,500 easily if one of you didn't work. So you don't have the childcare issue.

50:18Because you don't work, you have more time during the day to get to the grocery store and do meal planning and cut back on the restaurant expenses. You have, well, your utilities will be the same,$584 because you'll be spending a lot on air conditioning. And again, this doesn't have to be a decision you come to right now. This is a conversation. This is a math problem. This is a, you know, what if. Talk to a CPA who can look at your specific set of numbers and say, hey, based on this, you're going to have to have depreciation recapture of X number of dollars. This would be your tax burden if you sold the property.

51:00and that can be something that is considerable. That's something to keep in mind. Maybe you bought it so recently that you don't have a huge depreciation recapture. You just have a lot of gain. Maybe there's a 1031 option. You should speak to somebody who has a lot of experience with the 1031, but you could 1031 into a duplex. I don't know if you could 1031 into a duplex if you're going to live in one half of it. So that's something to talk to a CPA and a 1031 expert about. But I think there's a lot of options out here. You don't love this multiplex. I don't really love this multiplex either, just based on the bare bones numbers that I see.

51:44It's out of state where you don't have any other rentals. It is costing a lot of money for this refi. How far into the refi are you? I mean, I'm just waiting for him to get the appraisal back and tell me what my numbers are. Okay. So you're pretty far down the road with the refi. Yeah. But it's not a commitment until we sign. Right. You would only have to pay for the appraisal.

52:14Yeah. When your husband has those seven days off, day two or three, let's have a conversation. Here's all the numbers that I've gathered. Let's discuss the different options. Here's some cities with some houses available that we can go and check out. Or if you're still able to travel right now, take a quick pop down to Florida and look at some houses and see, oh, wow, this is really great. Or, oh, this is what you can get for this price. Nevermind, we're going to stay put. Being in a property is way more eye-opening than just seeing pictures. You can't smell a picture. And you don't have to move to Florida right away too.

52:54Or if that's even a goal of yours, you can always dial things back, but not make too many life changes at once is maybe the thing that sometimes people say that maybe you dial back the job and then you move, but you can do it all at once too. I saw in the notes here, road schooling the kids or something is potentially a goal. So yeah, get out of Wyoming, take a year trip and live off of some of your savings. This is terrible financial advice, but it sounds wonderful. And then end up in Florida. There's all kinds of things that you can do. And because you have this financial, I'm not going to say windfall because it's not, you've built this, but it's coming to you and this is a good opportunity at a very specific point to make some decisions that could change the next 10 to 20 years.

53:45Yeah. Okay. Awesome. Well, Amanda, I really appreciate your time today. I appreciate you sharing your numbers with us and sharing your rentals and your situation. I think you have some homework to do. And I think you have a couple of conversations with your husband to have. Pop a movie into the TV so that the kids have something to do and they're not asking you for things all the time. But having an uninterrupted conversation with your husband or series of conversations with your husband about your options is really key. The most important thing is that you're both on the same page. This is what we want.

54:20Maybe even have a goals conversation first. It could be several conversations. Scott and I have an episode 157 where we talk about having a money date with your spouse. That episode gives some parameters for things to talk about. It's more from the perspective of a conversation with a spouse who isn't on board, but it gives you a lot of things to discuss during a money date. So maybe listen to that episode together. Talk to each other about your big goals, your small goals, what he would really like out of life, what you would really like out of life, and just work together to find a solution that makes you happy, that makes him happy, and that allows you time with the kids that you have.

55:06Yeah, definitely. I love it. Awesome. Amanda, thank you so much for spending time with us today, and we will talk to you soon. All right. Thank you so much. Thank you, Amanda. All right, Kyle. That was Amanda. I have to say, I really loved your advice to consider pulling back. Consider selling this house or taking the refi and living off of it for a little bit. So many people that we talk to are so rush, rush, rush to the end. I can't wait to get there. I can't wait to get to the end. And what I've discovered is that the journey is just as important as the end result. And I'm really glad you brought that up.

55:43Yeah. I mean, it's only because I've been guilty of the same thing. In the financial independence community, it's really easy to get fired up about saving every last penny, optimizing everything you can, having both spouses work. When there's the opportunity to make the money, save it fast and get out of the grind as fast as you can, the problem is you get a few years down the road or even a few months potentially. and you realize the priorities might be a little skewed from what they should be. But at the same time, the nice thing about being so aggressive in a financial independence journey like Amanda has been recently is that you are saving so much so that if you do get burnt out or you do need to make a life change, you now have the option to.

56:30Or if you do need to slow it down because you've done well for the past few years, you weren't not paying attention, you were trying really hard, you have more options than if you had not thought about it or planned at all. So that's what gets you to where you need to be. But sometimes it's time to take a pause and just back up for a moment and see what's really important and then decide which direction you need to go going forward. Like you said in an earlier episode that we recorded with Joe, the personal trainer slash cup. Flexibility is key. And when you have amassed a plan, a pile of money, investments, and a cushion, you have more flexibility.

57:14And I'm hoping that they can look at their flexible situation, look at their flexibleness, their flexibility options, and decide on something that really gives them some peace and enjoyment out of their life. Definitely. Me too. I hope they're able to use what they've built to bring some, like you said, some peace to their young family, which it sounds like they could really use a rest right now, really. So hopefully they get it. All right. Well, Kyle, thank you so much for joining me today in place of Scott, who's out gallivanting around doing who knows what. I appreciate you showing up today.

57:50Should we get out of here? Always fun being here. Yep. Let's get out of here. All right. That wraps up this episode of the BiggerPocketsMoney podcast. He is Kyle Mast and I am Mindy Jensen saying out the door, dinosaur. If you enjoyed today's episode, please give us a five-star review on Spotify or Apple. And if you're looking for even more money content, feel free to visit our YouTube channel at youtube.com slash BiggerPocketsMoney. BiggerPocketsMoney was created by Mindy Jensen and Scott Trench. Produced by Kaylin Bennett. Editing by Exodus Media. Copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.