What The Best Way To Move Forward On My Path To Financial Fredom Through Real Estate

[Quinlan Moran]

Hello all, before you answer this question here's a little background.  

My wife and I are 28 year olds, living in Southern California and we are starting to create our financial freedom portfolio in real estate. We each have W2 incomes and gross around $500,000 - $600,000 per year. We closed our first investment property in February 2024. It's a single family home in Waco Texas, purchased with $40,000 - 25% down with an interest rate at 7.25%. Collectively between our personal residence mortgage and rental mortgage we are at a 50% LTV ratio. If you were in my shoes what would you be doing? Looking for more deals? paying off the high interest loan? waiting and saving capital to purchase when the markets better? Something else? Let me know, as I am struggling with what to do in our current market.

Thank you for your help and guidance.  

[Ryan Kelly]

@Quinlan Moran I was actually corn and raised in Waco. A $40,000 home may have better cash flow on paper, but it’s likely a dump in a poor area of town. At your age with high salaries, you should be focused on buying the best real estate in the best markets you can. Over the next 10-20 years, great properties can appreciate well AND then can be converted into better cash flow. Dumpy properties won’t appreciate and won’t give you the same option. As I tell my clients, you can convert equity to cash flow but you can’t convert cash flow to equity. You may never replace $500k to $600k a year just in cash flow, but if you want a good retirement, focus on equity and cash flow will come down the line.