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Updated over 3 years ago,

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2
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5
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David Levesque
5
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Growing Wealth, but accumulating more debt?????

David Levesque
Posted

One thing Brandon preaches a lot is growing your portfolio. Buying 1 small multifamily opens the door to buying another and then another, until eventually your portfolio reaches over $1M. Ideally, you should be making deals that earn you positive monthly cash flows until you reach that financial freedom sweet spot. 

One thing I can't wrap my head around is the fact that the more properties you purchase, the more debt you go into (assuming you are taking out a loan to purchase each property). If I were to purchase 5 properties over 3 years for $200k each, which yield $1k each in monthly cashflow, I am essentially going into $1M of debt at the end of the 3 years to take home $5k a month. I will have $1M of assets on the books but also (roughly) $1M of debt to go along with it. I was always taught that debt is bad and that you should look for ways to always eliminate as much debt as you can. I want to start getting into multifamily rental properties but cannot wrap my brain around getting into that much debt even if it means a more comfortable lifestyle with the increased income. Can anyone tell me what the next step would be to start paying off some of these mortgages after you've acquired that financial freedom? is there an end-game strategy, or next step, to really start milking some equity out of these properties? 

Thanks!!

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