All Forum Posts by: Joshua W.

Net worth = Value held - debt.  How can you say your net value is comparable when you owe so much?  I know a lot of people who "owned" 50 houses only to have them taken away when a lot of people vacated an area during an economic downturn.  You guys are willing to take high risks, that's great.  I'm not, I'm looking at low risk with a steady climb.  When I ran the numbers on buying more homes with debt involved and going quicker, my actual cash held was less than owning fewer houses outright.  Plus since I'm interested in eventually offloading the homes at retirement, things such as depreciating the home or other tax tricks won't help me.  Sure you see more cash flow now, but at the risk of your future?

We have a saying, slow is smooth, and smooth is fast.  Please refer to my original question to see why I've responded the way I have.  BTW, I never did compare "my plan" to "their plan", I wrote two separate plans, one using mounds of debt, the other not, and the no debt plan put me on a million in houses in a decade, where the debt plan gave me more houses, but the debt actually caused me to own less than a million, the banks owned more.

I was just posting what I found with the two broadcasts I did with my plan, your plan wasn't even a consideration.

So I did some interesting research and a ridiculous amount of math.  One plan is to save up 25k for reno, and about 30% down and buy a home, pay it off, and then snowball the net profit into the next save up and buy.  I do that 5 times and I'll have 5 fully paid for rentals with no debt (including any houses) within 14 years.  The other plan was to save up 25k for reno, plus 30% down and buy a home, skip the pay off and just take the net to apply to the next deal.  I do that 5 times, then snowball the net into each mortgage and pay them off.  I end up with 5 fully paid for rentals and no debt (including houses) after 15.2 years.

So from what I can tell, the conservative approach will actually net me more money and put me on track to not having to work a regular 9-5 a full year and a half quicker than the alternative.  Sure, at the end of everything I'll have 5 houses quicker, but it'll take longer to have them fully paid for.  My goal is to net the most possible so I don't have to keep working the job I hate.  Once I'm in 5 fully paid for rentals, I'll be making the same as what I make at my regular job and can leave it, putting me independent of any work other than what I want to do by the age of 48 or 49.  Hell, most likely it'll be even sooner, because once I get on fire and things are really moving, I'm sure I'll be finding money left and right putting me closer to that goal of leaving this place by 45.

I got the mortgage from the brrrr strategy they keep talking about on here. Getting the investors loan to help with renovations then refinancing it to pay the investor off after 12 months of interest only payments. What's an LTV loan?

I plan on being debt free except for the mortgage on my house within the next 18-24 months.  At that point I planned on spending 2 years saving up 50k for my first real estate investment property.  My goal is to find something in the 75-85k range, spend 15-20k fixing it up, and hopefully have it value at about 120k when all is said and done.  So my thought is I bring 50k to the table, and get a 50k investors loan for the property.  When all is said and done I get a mortgage ONLY for the value of the loan so I can pay it off, which means I should have a 50k mortgage on a 120k property.  With the renters and my own cash flow, I should be able to pay that house off in under 2 years so it's 100% gain on the rent, and then save up 50k to do the next deal.

So the reason I'm wanting to pay each house off before starting the next deal is I'm slightly worried about debt risk, plus being able to get a mortgage with little to no credit and my DTI limiting how much I can borrow. I'm in the Nashville market, so snatching up houses isn't the easiest thing, but I'm going to take it slow and steady so I don't make a huge mistake. My DTI with the house is 25%, so I guess I can go up another 9% with the mortgages on the rentals. Does that seem right? Or when you are doing rentals do banks not look at your DTI anymore? I'm really new at this, but being 35 now, I'm hoping that this will snowball quickly and starting 4 years from now, I should be able to get to the point where I'm buying and fully paying off a house every year until I don't want to manage any more properties, hopefully being able to quit my job by 45-50.

Feel free to poke holes in my plan, I can't shore it up until I know where the weaknesses are lol.  But the lending thing worries me a bit.