having trouble with a very basic concept-wisdom is appreciated!

[Jack Johnson]

having trouble with a very basic concept-any wisdom is appreciated!

help me get my head around this concept -" leverage " for lack of a better word

have 5 properties - 3 are paid for (worth approx 150k each) and 2 - I'm paying ~2.5-3% note on - all properties cash flow and I use a ~ + 10% cap rate on properties I buy

part of me says pay off the 2 - I am paying interest on before I buy another property

the other part - is toying with the concept of - doing a cash out refinance on the properties that are paid for and buying more properties - I hear alot of people talk about pulling out equity to buy other properties - but the conservative in me - thinks this is robbing peter to pay paul - sure I would have more properties but more debt on more properties

how does this get me closer to financial freedom - rather then just bragging rights that i have more properties with more debt ?

so better to have 5 properties paid for or 10 properties I'm paying on ?

many thanks

[Jack Johnson]

i guess the biggest challenge is my stage in life - as i plan for retirement in the next 5 yrs hard to want to go leverage several notes and wait for them to be paid off in 15-30 yr notes

As one advised - its not whether to leverage but when 

Early in your career leverage is more important then cashflow 

Late in your career cashflow is more important then leverage