Pay off home mortgage or investments

[John G.]

I have a question for everyone.  I know it's more of a question where the answer is dependent on a persons goals.  But just curious everyone's take,

If one were in a position to pay down debt on home mortgage with rental income or pay down rental mortgages.

What's your take?

[Zach Ward]

Everybodies circumstances are different. If you are young (I'm 34) and you have a reliable W2 job that can bale you out in a pinch (I'm an RN so have excellent earning potential and job security) then be aggressive with leverage. I shoot for a minimum 20% equity with goal at 30%. Do the math. If spending 10 years paying down one mortgage is only going to increase your cash flow $300 a month was that length of time worth it? I made one 20% DP= 16k I saved,and turned that into 3 more houses that I put nothing down on. Total of 6 now in 2 years cash flowing 2k a month total. You make your money by buying below market and then using equity to absorb more properties. Keep in mind the more properties you have the better you are hedged against a vacancy or repair. 1 property in portfolio means 100% vacancy or 100% repair cost. If I've got 10 then I'm only 10% vacant. Put cash flow back for "rainy day" fund. Then U can start using OPM

(Other people's money) to buy more property instead of working doubles and over time like I did with my first purchase. I want to retire in my 40s with 20 plus doors, not have 2-3 properties paid down in my 60s and just get by. Figure up your R.O.I.!!! 

You want 6% or you want 46%? Power of compounding interest is most powerful force in universe said some smart guy way back when ;)