Hello, 

Is my "Aggressive Payoff Plan" the right strategy, or can you help steer the ship in another direction to maximize future gains. Our goal for the next 10 years, is to create as much wealth as we can,..while not dipping into our other investments, allowing us to move out of Michigan and begin our "Life of doing Whatever we Want".

As of 1/1/15 we purchased a 14 unit apartment building. The 14 small units consist of; 4 two-bedroom and 10 1-bedroom units all within a 6900 sq.ft footprint, can you say "SMALL UNITS" Surprisingly, the vacancy rate on these apartments is and has been virtually zero..,due to the secret of" little old lady tenant selection."

We purchased the apartments from a family friend on a flexible Land Contract for $510,000. We put $200,000 down leaving us $310,000 at 5% AMT over 30 yrs. No peanalty for early payment. The monthly rents and laundry bring a monthly income of $6,890.00. Monthly expences, including my lofty $3,300.00 LC payment, averages $5,300.00 a month, leaving us $1,590.00 a month cash positive. The Tenents have not had a rent increase in over 5 years and I don't plan on increasing them THIS year. Due to the size and amenities of the units, I  only see a $20-$30 per unit rent increase available, which will keep us priced just below the competition, and affordable to the social security "Little Ladies Club" 

Here is the Aggressive Part..I originally planned on having this paid off in 10 years, hence the $3,300.00 monthly mortgage payment. However, if I was to make a $10,000.00 annual principal payment( that I will be saving from the $1,590 surplus) I could have this free and clear in 7.5 years. 

Why the urgency? My Wife and I are tired of SE Michigan and want to move to a warmer climate. Additionally, in 7.5 years we will both be in our mid-50's, which is the age I would like to have the choice to "Do Whatever I Want". 

I realize that there will be Unforeseen Expences, so we have placed a $25,000.00 buffer into our account for these swings and if absolutely necessary, we can tap into our own savings for anything MAJOR, but thats why we pay insurance, right?

So, is paying off the Apartments the right strategy or do you have any helpful  thoughts or ideas that will allow us to capture more revenues,while be able to keep our 7-10 year plan and Not have to dole out any more of our own Capital. Any and all related experience or stratergies is welcomed.

Thank you,

Mike Cotter