A Million in Assets Acquired Whats Next

[Derrick McCoy]

Hello BP,

     This is my first year doing buy and holds in real estate. I managed to acquire over 1 million dollars in assets this year by purchasing properties based on the 1% rule. All of the properties collected are cash flowing enough to cover the debt by 1.25% or more. Now that I have collected the properties and able to make the monthly mortgage payments and pay the investors their agreed on percentage how do I accelerate the payoff of the mortgages to collect the full rents monthly. If anyone has some proven strategies please share with me for considerations.

Derrick

[Thomas Rutkowski]

Don't pay off any of the mortgages. You've built your business by putting as little of your money into it as possible and using OPM. Keep it that way. I don't think you fully understand the value of leverage.

If your properties doubled in value overnight, how would you access that value? Your wealth is trapped until you sell or refi.

Increasing your investment (to build equity) will decrease your ROI.