Hi! I am sure this discussion has been brought up before, but I hoping to gain some wisdom from seasoned investors. I have heard several investors talk about "losing it all" during the 2008 crash. Is there a formula or rule of thumb that would help me decide if I should slowly build and try to pay properties off so that I can weather a changing economy, or should I try to reach my goal (outlined below) and focus on paying the properties off once I have my portfolio where I want it?
Currently my goal is to own 10 rental units that cash flow $500 per month in the next 2 years. This would allow me to quit my 9-5 job and focus on Investing while still providing for my family and feeling secure. I work for a tract home builder as a construction manager and really enjoy what I do and like my company, but prior to that I was an independent contractor and miss being self employed. I like my job and can see myself staying with the company for many more years, but would prefer to be independent.
Currently I own one rental with an inherited tenant. Once the lease agreement expires the house should cash flow about $600 per month. Should I try to pay the house down and reduce liability, or use the money to buy another house, or should I get to 5 houses and then start trying to pay one of them off?
I know the answer is different for every person and changes with each persons goal, but I would like to hear from someone who went through the crash. How would they have done it differently? I respect Dave Ramsey's "Snow Ball" plan, but I don't want it to take 10 years before I can be independent.
BP Community what do you think? Thanks for your help!
