Looking for advice

[Joseph Boese]

Hello my name is Joe and I am from Texas. I am new to BP, and am looking for some good advice. My goal is to become Financially independent. I have always been a saver and haven't carried a lot of debt.

I currently own 3 investment properties. 2 of them are free and clear and I owe 130k on my third one. Both my free and clear properties appraised between 160-170k. I have always thought that I should pay one condo off then buy another. After reading BP I am quickly realizing I could use some leverage and try to make my dreams a reality. What should my next moves be to maximize my earning potential in the next 5 years!

Looking forward to making new connections and getting some great advice. 

[Steve Vaughan]

Originally posted by @Joseph Boese:

Thanks for the reply! I have a good cash flow with my current condos. I have good experience buying in college towns and renting out to students. Now just trying to decide how much equity to pull out to buy more places. Is it better to put down a big down payment to get a higher "cash flow" back from the rent or to use that money to buy multiple places?

 Congrats on owning a couple $170k places free and clear, Joseph. That's awesome!

Most here will advise to leverage everything. Borrow from your 401k, your mother, partner up, etc. But most have never owned anything free and clear or maybe nothing at all. Remember that.

I am ok leveraging at about 80% residential assets in my own name. I don't want PMI and I don't want to be a high equity target for litigation. At rates in the 3s it also makes good long -term financial sense as well. When the payment gets too annoying I'll swoop in, pay them off in one shot and move 'em into an LLC or something.

I am good with high equity positions in my commercial assets that  I place inside LLCs. Got the asset protection, borrowing rates and terms aren't as good and I tire quickly of commercial annual reporting requirements. My 10 unit mixed-use pays off soon, quickly followed by a couple 7s. Commercial lenders can stick it. I'm never going back. If I wanted to report to someone I would have stayed in my cubicle.

It will come down to your risk tolerance too, of course. Having equity gives you options. That's the important thing. Congrats again!