Paid Cash for all deals Good or Bad?

[Joshua Robinson]

Hi everyone, so here’s the story. I played in the NFL for 8 years. While playing I always said that when I retired I wanted 10 properties and no debt. I was afraid that if I allowed debt to pile up while playing, and something crazy happened I could be in trouble. So while investing in real estate I did so very slowly and paid all cash for every deal. I retired this past season and I’ve been weighing the idea of refinancing my homes to take money out of them or getting a line of credit against a few properties. I currently have just over $2mil in equity in those properties. I’ve been listening to BiggerPockets faithfully for the past 9 months and I really think I’m going to start leveraging but I want to weigh all my options and not overdue it. So what I’m looking for are thoughts and suggestions on if I should refinance my current properties or if you think I should leave those properties in cash as security and leverage all future properties. Recently on a BP podcast someone said, and I don’t remember who it was. But they said they intentionally had one property completely paid off and in case something crazy happened like Covid 19 they’d take money out of that home to get through. I liked that idea but again, I’m open to others. Thanks in advance!

[Mason Hickman]

@Joshua Robinson

Very cool story! Can you live happily off of the cash flow that the rentals are throwing off or are you yearning for more? If you're happy with the income, while you won't be optimizing your returns because of all the equity in the properties, you've already made it to the "finish line." I'm sure there will be a bunch of people who come on and say you need to leverage up in order to get better returns on your equity but there's something to be said for having peace of mind without debt.