To Buy More Or Payoff What You Have And Retire?

[Justin S.]

I am starting to accumulate enough units where if they are all paid off I could "retire" and be more than comfortable. 

I would love to hear some stories of one the following:

1. Their strategy to keep accumulating enough units to retire on cash flow even with mortgages

2. Once you have accumulated enough units, rapidly pay them off to retire mortgage free.

I struggle with which approach works better/faster and what approach certain people took and how they achieved it.

I look forward to the responses    

[William Jenkins]

Paid off properties are wonderful.  I see the infinite leverage model that has been touted by so many, and I think it is flawed on so many levels.  Borrowing is not bad, but the borrow, borrow, borrow strategy is horrible.   I sometimes wonder how many of these posters are going to disappear overnight when the next downturn hits.  

So Bob, walk me through this.... You took $400k out of your property, and figure that your net worth has "stayed the same."  I guess that depends on what you use the $400k for.  Are you spending it on your lifestyle, or are you actually accumulating assets with it?  Regardless, you say it as fact that you will simply do it again after a few years.  Why are you so certain of this?   

Most who use leverage will always preach how smart they are, and tout that they are all about "using other peoples money."  They talk about interest deductions, but fail to realize that it does not cover the cost of interest.  They talk about all of their "equity," when it is simply a BS balance sheet number, based on BS property valuations, and 100% subject to the slightest real estate downturn.  

If you are getting older and retiring, then I would suggest paying them off, and simply living off the cash flow.  You can always pick up another property with financing if the deal presents itself.