Getting $30K in 1 Month - 25 to Life

Aight, BOOM!

          So like I said in the last post, I saved up $20K in 2 years. No problem. I knew this would be easy because I did it 2 years ago. Whenever I have $20K in my savings, I always start seriously looking at houses. This time, my location of choice was Cape Town, South Africa. I searched on property24.com because I like their inventory and the interface is easy to use. I filtered my view to only look at the cheapest properties in my favorite area. Luckily, I had a friend from the US who stayed in an apartment complex in a cool part of Cape Town. She said it was safe and a great place to live. That's all I needed to hear to start looking for apartments in the exact same building! Move over girlfriend, I'm your new neighbor! Lol.

           Any-who....the apartment was listed for about $50K. I couldn't go to look at it in person because I was thousands of miles away, so I asked my friend to go look at it for me. She took videos and sent them to me. I emailed the listing agent and told them I was interested in purchasing the property. They emailed me back a copy of the contract. I filled out the contract, signed it, and returned it to the listing agent via email.
           Next step was to pay the downpayment. If you're a foreign buyer, South Africa's rule is that you have to pay down at least 50% of the purchase price, and then get a mortgage on the other 50%. I tried to open international bank accounts with several banks in Cape Town but I had no luck. All the banks required that I either have a South African ID# or a visa. Of course I had neither. I had 50% of the purchase price, BUT I couldn't get a mortgage. That's when I realized that I would have to pay for this $50K apartment fully in cash.
         I went to my bank in the US and made a wire transfer of $20,000 to the real estate company in Cape Town. I was now the official owner of this cute little apartment in Cape Town...well almost. The process was delayed a bit because I had to find ways to get the other $30K. I kept telling the real estate company that my US bank had restrictions of how much money I can send within a short period of time (because of fraud). So the seller just had to wait until my bank allowed me to send another large sum of money. During this time, I was hustling my resources (Google) to find out how I could get this $30K.
         After much reading and some browsing, I learned that I could use my credit card.
        I had two credit cards: one was already in use, paying off some student loans. The other had a limit of $17K and was barely ever used. I was able to get $15K cash from my credit card at 0% interest for a year. This is called a cash advance. My bank loans me the $15K and I don't have to pay any interest on this loan for one year. However, if one year passes by and I haven't finished paying off the entire $15K, I would be charged about 22% interest per statement period.
        Ok, so I saved $20K, borrowed $15K from my credit card, that adds up to $35K. Where did the other $15K come from?
I borrowed it from a trusted family member who knows I'm about my money so they have nothing to worry about.

The Breakdown:

List Price: $50,000
Downpayment: $20,000
Cash Advance: $15,000
Personal Loan: $15,000

Bonus: This property also had a tenant already living there so I was collecting rent right away. The rent is just so tiny when you convert it to US dollars lol. But money is money.

What do you want to know next?

Property 2 - 25 to Life

Life became a lot more expensive after purchasing my first income property. My student loans were no longer in their grace periods, so Sallie Mae was entitled to a fair share of my monthly income. Also, I started a serious relationship. Seriously, who knew love would be so expensive? I found myself spending more money during my vacations. Love makes you hungrier I guess. When I was traveling as a single woman I barely ate food. Now, walking around with this handsome giant, we were trying everything (except meat for me). I was also spending money on Airbnbs. When traveling alone, I always stayed with a friend or family member for free, but most people don't have space for me and my handsome giant. So now I have two additional expenses - Sallie Mae and love.
          I was looking for other ways to make up for the extra spending so I started tutoring an old student in math and reading. That only lasted a short time because my student started doing way better in school - she didn't need me anymore. In short, I didn't find any immediate way to make extra money so...I tailored my goal to fit my brokeness. Instead of going for another single family wholesome house in America, I started looking outside of the country.
         I looked at houses in Italy, Ghana, South Africa, Jamaica...and probably on Mars.
I knew that maybe one day I'd find myself living in Cape Town, South Africa since I survived it there for 5 months while I studied abroad in college. No, I didn't just survive, I thrived. I loved Cape Town so I devised my plan to own some type of liveable space there.

         Remember in my first post how I saved up for property 1? Well I did the same for property 2. I saved $20,000 within 2 years and purchased a 1 bedroom apartment. But, the apartment did not cost just $20K. It actually was listed for about $50K. How did I come up with the other $30K?

The Buying Process - 25 to Life: Property 1

In the midst of all this saving, I contacted realtors in my top 2 cities of choice. I went to look at houses during my time off from work. It only took a couple of weekends for me to decide the perfect location. Once I figured out which house I wanted to buy, I immediately put down an offer and waited to hear back from the seller. If you're an indecisive person and you take too long put down an offer, someone else might put an offer on the property you like and you end up going with your second choice. . . or maybe you end up with nothing at all.
         The seller's counter-offer was $3000 more than I wanted to spend so I brought up some problems I saw on the property. I asked the seller to either fix the problems OR just sell it to me at my offer price. It would've probably taken up too much of their time to fix the issues - or maybe it would've cost them more than the discount I asked for. Either way, we agreed on my offer price.

List Price: $137,500
My Offer: $130,000
Counter-Offer: $133,000
Final Sale Price: $130,000

How Did I Finance the Property?

I paid down 20% of the sale price because I wanted to avoid mortgage insurance. Mortgage insurance is just a penalty for being broke. The mortgage company charges you extra money each month, just in case you lose your one little job and can't pay them anymore. At least they got some money out of you up front. So any-who, 20% of $130,000...

Downpayment: $26,000
Mortgage Loan: $104,000

My monthly payment was $744. Nice, right! But it went up since homie took office in 2016.

Stay tuned to hear about property #2.

25 to Life: Property 1 - The Saving Process

In 2014, when I graduated college at age 22, I had never worked a full-time job and I had no money in my bank account. But, I looked good on paper. My resume was already two pages long with all the serious volunteer work I had done, along with running the non-profit organization I founded. My goal after graduating college was to own a home before the age of 25. This meant that I had three years to get this done.

Backtrack -- I have the same cliche immigrant story as many other Americans. I was born in the Caribbean, migrated to the US at age 12 and tried to assimilate. I knew my purpose here was to change the financial and social dynamics of my family. My motivation was to move up the social ladder - it still is.

I spent latter half of my college years researching different ways to make money online. I needed large sums of money fast, because time waits on no one, plus before you knew it, I'd be 25. By the time my senior year came around, I had taught myself some valuable things about money and finance.

• Sadly, there are no legal shortcuts
• You need money to make money
• You actually have to work for it
• Nobody cares about your struggles

After college, I took a job offer that paid less than $60,000/year. It sounded like decent money coming right out of college but after paying NYC taxes, it dwindled down to a very modest amount. I was taking home a little over $30,000 a year. After paying rent, grad school tuition, transportation, travel expenses, insurance, bills, bills, bills, it seemed impossible to become a home owner in 2 years. 

Of all the research I did online about how to make more money, only one worked for me so far. I realized that I didn't have any money in the first place, so using the other strategies were far-fetched. The strategy that worked for me was SAVING. Plain old boring SAVING in a regular bank. 

I was able to save enough money in less than two years, and before I turned 24, I purchased my first home.  

Don't get me wrong, I also explored the other money-making strategies I learned online, like purchasing stocks, mutual funds, etc., but those are more long-term. I needed money fast, and straight up saving money at the bank worked for me. Of course after making my down payment on the house, my bank account was looking hungry but I just started from scratch again. The bright side: I am not paying mortgage out of pocket. In fact, I am profiting off the house I bought. 

Ask me how in the comments section. 

My next step was to repeat this process in the next two years. Did it work?

The Breakdown of Acquiring the 1st Property

Year 1

Employment: Full Time from 7am - 5pm
Gross Salary: $56,200
Net Salary: $36,962
Pay Frequency: Twice per month

Each paycheck was roughly $3000. From each check, I paid myself $500. Since I got paid twice per month, that's $1000 paid to myself each month, for a total of $12k that year.

What did I do with the other $24k?
I paid rent, which was $500 per month for a bedroom. That's a total of $6000 for the year.

Now I'm left with $18k...
I also paid about $3000 per semester for graduate school, totaling another $6000 per year.

We're at $12k now...
Ummm...I spent most of that on travel and life insurance. I took approximately 5 vacations and decided to do something that sounded responsible. LIFE INSURANCE (whatever that means).

Year 2

Employment: Full Time from 7am - 5pm
Gross Salary: $59,800
Net Salary: $38,059
Pay Frequency: Twice per month

Each paycheck was roughly $3100. From of each check, I paid myself $500. Since I got paid twice per month, that's $1000 paid to myself each month, for a total of $12k that year, and $24k in 2 years.

What did I do with the other $26k?
I paid rent, which was $500 per month for a bedroom. That's a total of $6000 for the year.

Now I'm left with $20k...
I also paid about $3000 per semester for graduate school, totaling another $6000 per year.

We're at $14k now...
Ummm...I spent most of that on travel and life insurance. I took approximately 4 vacations and decided to do something cool - HOT YOGA, and a GYM MEMBERSHIP.

Do you think this strategy can work for you? Let me know...seriously. 😝