Buy more bldgs vs. pay down loans

[Kenneth LaVoie]

Hi All

I am a firm believe that "no financial decision should be made using financial criteria alone", meaning you have to consider personality, what lets you sleep at night, etc that being said, my wife and I have decided to do a 180 and instead of buying more units, we're going to start early amortization of mortgages. I cannot tell you of the relief we both feel having decided this. I wanted to run our basic plan and reasoning by y'all and see if any pros and cons come up.

1. We're in our mid 40's and just got into this 3 years ago - We have 49 units, bought over those 3 years (yes, the first few purchases were .. how do we say ... not very good!). 4 SFH's, two 2 units, the rest 4-11 units. We own 2 houses and a duplex f & c. Most loans <4 units are 3/3 at 5.25% re setting to about 4.5% soon. >5 units range from 5-5.95%, 5/5's, all 25% down, 20 year amort.

2. We are doing a couple modifications where our 5% 5/5s will be moved to 7/1's to give us a bit of breathing room. No crystal ball, but we're going to assume rates will be much higher in 5-7 years, at least 2 full points.

3. we may still buy a unit or two if we sell 1-2 of our lesser investments. In other words, we aren't looking to expand but we can certainly "trade".

4. If we sell a building we will probably pay off debt. We will also put 1,000-,1500 per month on the HIGHEST interest rate loan first vs. the "Debt Snowball" method of lowest balance loan first. Reason? We wish to kill the biggest offender first. It will take a little longer (than starting with one of our smaller loans) but when that 153,000 - 1,093/MO loan is paid off our cash flow will increase nicely. Then we can put THAT extra coupled with the current extra paydown and really get the ball rolling. Also, the timing is about right. We wish to be completely financially free in 7 years when our daughter graduates HS. We can have that big loan paid off by then , I believe. Especially if we also sell a lesser investment and put the proceeds twoard it.

5. We're just tired of working so hard. We want to get the machine "oiled" and running impeccably and we always seem bogged down with renovating new buildings. We want to be free-er and I think 50-ish units will serve us nicely.

6. We also have a lawn care biz and web design biz to pay some living expenses while we're socking away on debt.

I'd love to hear feedback or similar stories. All I know is that I feel GREAT today!!