More Funding Questions...

[twinstar_ca]

ft mac is ridiculous... had a student through our safety school a couple of months ago... married and living with mom and dad there 'cos a 1 bedroom apartment was $2800 a month... i believe in making hay when the sunshines, but there is a limit.. shame on gouging type landlords... :down:

[Daz]

1 bedroom apartment was $2800 a month

 

Kee-RIPES! That's more than I earn in a month right now...

:shock:

[Cole]

Cost of living in creston is fairly low, theres actually people who will set you up room and board for 550 a month in huge house, really nice people im really enjoying living with them!

 

No KVH isnt acreddited but that wasnt really a deciding factor as the instruction came so highly reccomended by many really succesful pilots.

 

The flying there is amazing, you will never feel like youre not learning something because... you never arent learning something, as soon as you have something down to a science a new element is introduced. As soon as you can hold a stable hover you start landing and picking up, as soon as you can land and take off you do some hover excersizes, once you can do those you learn to do more... it all builds up really quickly.

 

Have fun.

 

Cole

[Daz]

Cost of living in creston is fairly low, theres actually people who will set you up room and board for 550 a month in huge house, really nice people im really enjoying living with them!

 

Yep, that's pretty decent, and Creston's a nice quiet town. The school will certainly be on my list.

 

Thanks, Cole!

[xrkyle]

One of my thoughts would be to take out loans/LOC, then if the house sells, find a safe investment that pays the same interest as the loans charge - then the house profit would be at least cancelling the interest of my loans

 

It makes very little sense to sit on a liquid asset (like your home sale) when you're servicing debt. There is no such thing as a safe investment that will offset bank loan interest charges. Most low risk investments like GICs and bonds have trouble keeping pace with inflation, let alone prime + whatever percent. You can get into equities like stocks and mutual funds but then you're opening yourself up to the markets and that's a big risk.

 

Any loan used for investing, whether it's real estate or the financial markets, interest is tax deductible.

[Daz]

There is no such thing as a safe investment that will offset bank loan interest charges.

 

That makes sense - if there were safe investments that offset bank loans, then everyone would be doing it.

 

I'm looking at every option and learning as much as I can - xrkyle, you've been a tremendous help!

 

I'll throw out another option I'm considering - I may buy out the house from the ex. Even after she gets her half, I'll still owe less than the house is worth, and I'll be able to rent it out. I won't have the money up front for school, but at least I'll have some equity that continues to grow, and someone else will be making the mortgage payments for me. The Invermere market isn't in the crazy boom it was three years ago, but things are still appreciating slowly. I could then use this equity as leverage for school loans, no?

 

I don't know where you live but if the rental market is tight like in major cities and you could cover your mortgage payments with the income, I bet you could make a run of it. You could always reamortize.

 

The current mortgage payment is about equal to what the house would rent for, and that's with accelerated payments and a little extra being paid on the principle every two weeks (about 17 years left on the amortization).

If I refinanced and reamortized for a longer period, I think the payment would still be quite low. My ex even offered to rent it from me should I decide to go to school over this summer (did I mention that our split is very amicable? ).

 

Another thought (not related to financing): Is there a right and a wrong time to go to school? If I attended flight school over the summer, is it typically difficult to find work in the fall and winter, or is a 100 hour pilot looking at the same sort of job market all year long?

 

Thanks again for all your advice!

 

Darren Burt

Invermere, BC

[xrkyle]

Yes, that is what I said originally I believe. Keep the house, get a HELOC, rent it out and use the HELOC to go to school.

 

As long as the rent keeps you cashflow positive, you'll be ok. That's means you have to have a net income after the mortgage AND any additional expenses, like property taxes, maintenance, etc. If you're cashflow positive you should be ok keeping in mind being a landlord and dealing with tenants, especially when you're out of town - can be a big pain in the ***. Shady tenants that like to set up grow shows look for landlords like you. I'd be very wary if I was in your situation without someone I trusted in town managing the property for me while I was away.

 

There are some tax considerations to be made, the biggest one being that if you sell the house after it has been converted to a rental property you will pay cap gains on the difference of the fair market value when you sell and the FMV when you converted to a rental.

 

Also keep in mind that you'll be making very little money when you start out and will probably be in the lowest tax brackets (21% in BC). So any tax deduction that you get from all this won't be that substantial compared to say someone earning 100k a year and having a marginal tax rate over 40%. I guess what I'm saying is, don't let the tax deductions suck you in because they won't be that great until you start making money.

 

Oh and talk to an accountant if you're seriously contemplating this. My advice is worth about as much as it has cost you

 

Most operators hire in January and on into the Spring. Being done before the new year is ideal - so I've been told.

[Cole]

As far as when to train, you likely wont walk into a flying job, so if youre going to take out a loan for the whole amount anyway then the sooner the better in my opinion. This is based on the opinion that if say a large company has, for instance, a mass hiring free checkflight exposition, one has the credentials to apply.

 

The same thing goes for any company wanting a lowtime pilot, for the most part this is done in the early spring but I have heard of companies hiring at any and every point around the year based on need.

 

On top of this you do have a seasonal job available in the winter to fall back on after training should you not have any work lined up.

 

Always want to have a backup plan.

 

Cole

[Daz]

I still have to see if the loan thing will work - I just did some quick fiddling with some online home equity calculators and according to them, if I keep the house and buy out the wife at market value, the home equity value available to me will be precisely zip. Sigh. I'm sure there are other options, so I'll keep investigating...

 

So, I might be back to Plan A - sell the house, take my half, pay for school and finish up with little or no debt (and not much else).

But, it *is* nice to know that I do have a fall-back job of sorts. It ain't flying helicopters, but being paid to ski and blow up snow ain't a bad day job (even if the pay's not so hot).

 

Thanks Cole. BTW, I just re-read your kick the tires/light the fires post again, and it's VERY inspiring. You're helping me keep on track. Keep up the good work, and by all means, keep

posting!

 

Cheers,

Darren

[Cole]

Thanks, will do, with only 2.5 weeks of scheduled training remaining including mountain training and long lining as well as the written and flight tests plus my jetranger endorsement.

 

Lots of fun to be had!

 

Cole