To lever up or not?

[Bob Hines]

I'm sitting at a crossroads in my business and I'm looking for different points of view on which road to take.

Currently I own two 2/1 SFHs that are rented. Rents are $585/month on each and I have about $22k in each of them. Essentially I own them free and clear and have some nice cash flow coming in along with a good ROI.

My question is, what should I do next?

A. I could purchase 2 more houses like this for cash this summer and own 4 houses with no mortgages.

B. I could use leverage to buy 1, maybe 2, 2 to 4 family building(s) with mortgages. This would give me 4-8 more doors.

I know most people take out mortgages to start and then you hear, "once you get one paid off, things really start getting good" and such. I'm in a fortunate position to start off with no mortgages. Should I stay in the 'good' place and self finance purchases with cash flow or ramp up with leverage as I still have good cash flow coming in from these 2 properties to pay down faster/get more mortgages? I'd like to hear your opinions on this.