All Forum Posts by: David Ogas

At this point, I am a prospective investor who is looking to get into multifamily real estate. In short, I'm in the research phase of my development and in doing so, I've encountered several strategies for acquiring real estate and developing a portfolio.

Whether it be 20% down and then later, utilizing another 20% down to buy more properties, or by utilizing the BRRR method, the thing that I can't seem to understand is how anyone is profiting if they're constantly owing money to the bank, without paying off the mortgage in full from the first property?

On the surface, it appears that you're only making partial payments on one property, and then moving on to the next property by adding another mortgage that you're still responsible to pay for with interest. It would seem that if you're always in the red, that at some point, you could get yourself into a lot trouble with the bank or potentially ruin your credit.

In short, what's the point that I'm missing?

It's a 2 part process.

Part 1, get all the PERFORMING debt one can. Or that meet's one's end goal. Keyword PERFORMING debt.

Part 2, "Kill the Bank!". This is when one flips the switch from growing cash-flow, to focusing on debt paydown. Or maybe cash-flow is so fantastic that one just sit's back and let's it coast.

Remember that rents from month 1 are paying down your debt. Think about that, someone else is paying off your debt, and putting some into your equity piggy-bank, every month.

If your 65, yeah it's hard to see much benefit to starting at 65 because it's a time-play. If your with time to do 20-30yrs, it's a no-brainer. You pay once, for something that will keep paying you for eternity. It's a math game.

0 Votes

Milwaukee, Wisconsin

Hello Everyone:

In short, what's the point that I'm missing?

4 Votes

Milwaukee, Wisconsin

All Forum Posts by: David Ogas

David Ogas has started 1 posts and replied 2 times.

Post: How are you making money if always in debt?

Post: How are you making money if always in debt?