Dear Dave,
I'm following your advice and living on a budget, but it's really hard to save a little money for a house because property is so expensive on the West Coast. My family thinks I should buy a cheap place at home, fix it up and flip it to get the extra money I need. How do you feel about this?
Alan
Dear Alan,
When you're doing this kind of work, you need to be in control of what's going on at all times. You fix the details, supervise the team and it's all up to you to make sure everything is done right.
It's not uncommon for real estate professionals to look at 100 or more properties to buy just one. It's not an easy way to make money, and it's not something you can even remotely consider doing. All that being said, can you guess what my answer will be? Fixing and flipping buildings in your neighborhood is hard enough work. Trying to do it hundreds of miles away would be a nightmare. There is no way I would sign something like this.
Keep working on your budget, and start saving as much money as possible. You might even consider getting a part-time job to bring in some extra cash for your mortgage. But waiting and saving is much smarter than trying to fix and flip a house in another state.
— Dave
Dear Dave,
I work for a construction company. The closer we get to winter, the more I think about the reduction in work and my income. I've had a few winters in the past where things have slowed down a lot. Do you think I should start building an emergency fund for slow times?
Carl
Dear Carl,
I like that you think about the future. I also think it is good to learn from past mistakes and be determined not to repeat those mistakes.
You have a brilliant idea, but you're going to have to get on your horse to make something happen this winter. Also, you might want to think about calling it something other than an emergency fund. What about your “Offseason Fund”? You might think I'm playing with the name, but hear me out. This kind of saving isn't really for emergencies, is it? It's a budget problem, because you are planning and putting money aside that leads to something you know is coming.
Remember, we are not talking about some random money. It's the exact amount you can budget for. This winter you may have to think about taking on a side job, depending on the weather and other conditions. But after that, it will be a simple matter of planning ahead and setting aside something each month to complete!
— Dave
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