Nobody can become financially successful overnight. They put in background work but we tend to see the finished part. Fear is a dangerous component, hindering us from taking the bold steps we need in other to reach our goals.
I think it's not always about fear, Sometimes realistic factors discourage people from reaching their goals in life. For instance, I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value
@@raychristopher7797 This is the problem! Most times people with little or no knowledge of the stock market try investing by themselves. It once happened to me, then I learned my lesson and contacted a US-based finance consultant by name *PRISCILLA DIANE AIVAZIAN* and everything changed. I started enjoying huge returns from my investment.
Our strategy has been this: Build your investment portfolio up so that the net income from your properties can cover your monthly expenses (including your own mortgage) and THEN pay down your mortgage aggressively. But we're not getting rid of mortgage debt until we have the passive income necessary to survive without a job first.
Thanks for sharing. That's a clear, helpful milestone. Do you have a certain amount of cash you like to set aside for emergencies during that leveraged period to feel comfortable?
Got info , playing it safe is the way to go you sleep better knowing that you rentals are paid for, thank you for insured me that I am doing the right thing for my situation
Warren Buffett's rule #1 of investing is don't lose money. Rule #2 is don't forget rule #1! So, payinf off debt meets that rule because making mortgage payments during a big recession/depression can be one of the harder things to handle.
Being interest so low. I would investment in more properties. I did a cash out refinance of my home for $400k and bought 3 properties with 20% down payments each. I still has cash flow. Best thing is use bank money to make money.
Isn’t rental property income taxable while debt is not? So if you refinance on a brrrr you don’t have to pay taxes on it. If you buy out right you will pay a higher percentage on taxes than interest rate. Dealing with this now! Not sure whether to refinance or not.
Coach Carson, Whenever I hear people say to invest instead of paying off your mortgage because the interest rate is only 3% vs 8% or 10% returns investing I wonder if that’s the whole picture. My income and debt situation is identical to the couple that asked this question. If I pay off my 130k, it frees up 12k a year. Which is nearly a 10% return. Not having to pay $1000 a month mortgage is the same as making $1000 a month, except it’s guaranteed and there’s no taxes. Am I wrong?
Yeah, I look at it in a similar way. It's a VERY low risk "investment" to pay off your debt. I almost look at it like buying a bond at that interest rate. And you're 100% right - it frees up that cash flow which can reduce your risk of losing the property (in case of a downturn, troubled economy, tenant not paying, etc) and pay for other parts of your life or business.
In most cases for me my rental properties when purchased i made more money in equity, than i would lose paying interest on mortgage. But i guess you just do the numbers then decide.
I leveraged at first for 7 years and now have what I can handle with a FT job so I’m focused on paying off 6 more single families that will replace my income. Once I have enough free and clear for my base income I may leverage other properties to grow another “bucket”. My goal is to retire from nursing before 50. Your plan should be based around your goal.
well said Zachary! Plan your strategy around your goal. I like your idea of getting some paid off and then maybe having another "bucket" with leverage if you want to keep going. That's essentially what we did, too.
@@CoachChadCarson thanks. I’ve seen and heard both sides of the argument on “best” approaches but I love it when a mentor or coach starts with “what’s your goal?” “What’s your risk tolerance?” My career affords me good job security so I was ok leveraging heavy early on. Things get tight I can work as much extra as I want. Now I’m getting burned out at 39 and have kids so my risk aversion has changed. Is your goal high ROI% or high security? One needs to know what their end game is and build their strategy around that. Good video!
This is something I’m struggling with. I have an esop with an old company and they’re going to buy me out soon. If I don’t take the money it might be worth more later. On the flip side the company might not exist in 40 years which is when the contract for the esop is up. The amount is legit what I would need to pay my rental off. I figure with that I could pay off my primary faster using the free and clear rental property income. Im in my mid- late 20s and I’m certain I could pay both properties off by 33 and then start buying things cash every couple of years. Which I believe by 60 I should have a handful of paid off properties which is really all you need.
That sounds like solid strategy, Eric. If you're in your late 20s and have a free and clear rental that produces cash flow to help pay off other stuff, you're in real good shape. This free and clear approach is more conservative than some real estate investors want to be (who want to keep borrowing, buying more, etc). But it can work well with patience and persistence. And it's lower risk.
According to Zillow, median home price in Indiana is $191, Alabama is $175k, Kentucky is $172k, Arkansas is $153k. That's just a quick search. So, there are plenty of states where it's possible. Just not on West coast or north east or in a big city.
I've saved up $760,000. I'm 38 years old and my goal isn't to be rich, but to be financially free - I want more free time in my life. I'm thinking about purchasing 6 rental properties for approximately $125,000 each and living off the rental income. I'm wondering if this is a good idea? As long as I can make $3400/mo (after taxes), I'm good to go. Any advice?
My main advice would be to start slowly. I like John Schaub's advice of buying one house/property at a time. You'll learn a lot on each one and you can adjust your strategy on each new one. That's different than spending all $760,000 at once. Congrats on saving that much money! And I like the end goal!
Very nice. Go as fast as you are comfortable. Just be sure to have a contingency should some things not go as planned. Don't assume that you'll easily get financing for all and that you'll quickly find good tenants and that there aren't any hidden issues, etc. Figure out the things that could go wrong and think of a plan for each.
How many units do you have now? I'm leveraged in total $200,000 including my home. I have 5 rental doors and building another 2 for a total of 7. Thanks
Great advice dude! I saved for 12 years as I rented. I invested extra money into my business and schooling. In October 2020 I bought my first home and put down 110K. The mortgage was for $182k leaving me owing 72k. My mortgage payment is $523/mo and I was renting for $1200/mo. That's a huge savings per month. I am aggressively paying down the mortgage and only have 48k left after 5 months of living in the new house. I compare my risk tolerance to spicy food. I LOVE spicy food but I don't like it so much that I can not enjoy eating the meal. If it's too spicy your a$$ will pay for it later.
There is always more risk borrowing 100% of the purchase. If price hoes down, you still owe it all. With that said, getting started always involves calculated risks. So, i did something similar when i started. But i typically had a lot of equity and/or cash flow, as you said. Good luck!
Hi, If I remortgage my house and bought few buy to let interest only mortgage, is it a good idea to payoff my house using cash flow from rental properties?
It's probably a personal decision. I've personally paid off my home mortgage, but it was after years of reinvesting into more properties. So, you have to decide on the higher growth or reduced risk and peace of mind (with debt paid off).
Good Morning Coach, I’m David from Canada and I’m following you and like you said in one of your vidéo us we are blessed to have RUclips video where we can have tips and clear explanations about the subject thank you again. This is my plan I would like to start with a house with 3-4 beds price 175k and my down payment will be 10k-15k. With the bénéfice I’m thinking about after 1 or 2 year reinvest it in something bigger and so on. Do you think it is a good plan? And also I know nothing about house how I know that this house is not overpriced it a good deal or not, Thank you
Hi David, thank you for the comment. Will you be living in this house or just renting it? It sounds like maybe you're living there since it's a smaller down payment. If so, you should watch my video on House Hacking: ruclips.net/video/D6tKiIzg07E/видео.html . It shows you about how to run the numbers on a house hack and a lot of other details.
I'm considering paying off my house then using a HELOC to leverage down the line. I feel over leveraged and right now. Is this smart or is it inefficient?
I like that idea William. It frees you up, increases cashflow, and reduces risk now. But the HELOC allows you to still have access to the money for short-term good deals where you need to move fast.
my 10year plan is to pay off my house in the next 2 years. then start buying rental properties... 1 or 2 a year, so I'm hoping for 16 to 20 rental properties and retire by age 50
![Which rental property debt should you pay off first? [Ask Coach]](http://i.ytimg.com/vi/tPfzMmvLG5k/mqdefault.jpg)
![BLACK BAG - Official Trailer [HD] - Only in Theaters March 14](http://i.ytimg.com/vi/Du0Xp8WX_7I/mqdefault.jpg)
Nobody can become financially successful overnight. They put in background work but we tend to see the finished part. Fear is a dangerous component, hindering us from taking the bold steps we need in other to reach our goals.
I think it's not always about fear, Sometimes realistic factors discourage people from reaching their goals in life. For instance, I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value
@@raychristopher7797 This is the problem! Most times people with little or no knowledge of the stock market try investing by themselves. It once happened to me, then I learned my lesson and contacted a US-based finance consultant by name *PRISCILLA DIANE AIVAZIAN* and everything changed. I started enjoying huge returns from my investment.
@@georgerobinson2021 Oh, that sounds good but how do I reach out to PRISCILLA DIANE AIVAZIAN?
@@raychristopher7797 Look up her name on the webpage
Our strategy has been this: Build your investment portfolio up so that the net income from your properties can cover your monthly expenses (including your own mortgage) and THEN pay down your mortgage aggressively. But we're not getting rid of mortgage debt until we have the passive income necessary to survive without a job first.
Thanks for sharing. That's a clear, helpful milestone. Do you have a certain amount of cash you like to set aside for emergencies during that leveraged period to feel comfortable?
This
Net income during the growth phase, which means spreading yourself as thin as you are comfortable?
Got info , playing it safe is the way to go you sleep better knowing that you rentals are paid for, thank you for insured me that I am doing the right thing for my situation
Warren Buffett's rule #1 of investing is don't lose money. Rule #2 is don't forget rule #1! So, payinf off debt meets that rule because making mortgage payments during a big recession/depression can be one of the harder things to handle.
The saving concept is a good approach; I do like the analogy, "it's hard to fall from the floor" thanks Coach......awesome video.
Thank you! I can't claim the originator of that quote. I heard it from an investor and teacher named Jack Miller, who is now deceased.
"It's hard to fall off the floor" is extremely good advice. Tks Coach
Being interest so low. I would investment in more properties. I did a cash out refinance of my home for $400k and bought 3 properties with 20% down payments each. I still has cash flow. Best thing is use bank money to make money.
Yeah, if you are in growth mode I totally agree. Very low interest rates.
Hi, I’m planning the same strategy but not sure if I will go for interest only mortgage or repayment?
400k cash out!!! How much is that home worth!!!
Isn’t rental property income taxable while debt is not? So if you refinance on a brrrr you don’t have to pay taxes on it. If you buy out right you will pay a higher percentage on taxes than interest rate. Dealing with this now! Not sure whether to refinance or not.
Thanks chad. I will buy your book.
Thank you, Evarson!
Coach Carson,
Whenever I hear people say to invest instead of paying off your mortgage because the interest rate is only 3% vs 8% or 10% returns investing I wonder if that’s the whole picture. My income and debt situation is identical to the couple that asked this question. If I pay off my 130k, it frees up 12k a year. Which is nearly a 10% return. Not having to pay $1000 a month mortgage is the same as making $1000 a month, except it’s guaranteed and there’s no taxes. Am I wrong?
Yeah, I look at it in a similar way. It's a VERY low risk "investment" to pay off your debt. I almost look at it like buying a bond at that interest rate. And you're 100% right - it frees up that cash flow which can reduce your risk of losing the property (in case of a downturn, troubled economy, tenant not paying, etc) and pay for other parts of your life or business.
Great info! Im still deciding. Got to years left on mortgage but I'm dying to buy a duplex. Decisions decisions.
In most cases for me my rental properties when purchased i made more money in equity, than i would lose paying interest on mortgage. But i guess you just do the numbers then decide.
Right. I'm sure each deal can vary depending on the overall numbers mix.
I thought you had a perfect answer to that question
thank you!
I leveraged at first for 7 years and now have what I can handle with a FT job so I’m focused on paying off 6 more single families that will replace my income. Once I have enough free and clear for my base income I may leverage other properties to grow another “bucket”. My goal is to retire from nursing before 50. Your plan should be based around your goal.
well said Zachary! Plan your strategy around your goal. I like your idea of getting some paid off and then maybe having another "bucket" with leverage if you want to keep going. That's essentially what we did, too.
@@CoachChadCarson thanks. I’ve seen and heard both sides of the argument on “best” approaches but I love it when a mentor or coach starts with “what’s your goal?” “What’s your risk tolerance?”
My career affords me good job security so I was ok leveraging heavy early on. Things get tight I can work as much extra as I want. Now I’m getting burned out at 39 and have kids so my risk aversion has changed. Is your goal high ROI% or high security? One needs to know what their end game is and build their strategy around that. Good video!
@@zacharyward3123 Wait, you need rental income from 6 SFH to cover your income?
This is something I’m struggling with. I have an esop with an old company and they’re going to buy me out soon. If I don’t take the money it might be worth more later. On the flip side the company might not exist in 40 years which is when the contract for the esop is up. The amount is legit what I would need to pay my rental off. I figure with that I could pay off my primary faster using the free and clear rental property income. Im in my mid- late 20s and I’m certain I could pay both properties off by 33 and then start buying things cash every couple of years. Which I believe by 60 I should have a handful of paid off properties which is really all you need.
That sounds like solid strategy, Eric. If you're in your late 20s and have a free and clear rental that produces cash flow to help pay off other stuff, you're in real good shape. This free and clear approach is more conservative than some real estate investors want to be (who want to keep borrowing, buying more, etc). But it can work well with patience and persistence. And it's lower risk.
What state could you get properties that cheap in houses for 150 thousand 2 + 300000
According to Zillow, median home price in Indiana is $191, Alabama is $175k, Kentucky is $172k, Arkansas is $153k. That's just a quick search. So, there are plenty of states where it's possible. Just not on West coast or north east or in a big city.
@@CoachChadCarson will properties of that price range still cash flow, considering the rental cost and the cost of living in those states
I've saved up $760,000. I'm 38 years old and my goal isn't to be rich, but to be financially free - I want more free time in my life. I'm thinking about purchasing 6 rental properties for approximately $125,000 each and living off the rental income. I'm wondering if this is a good idea? As long as I can make $3400/mo (after taxes), I'm good to go. Any advice?
My main advice would be to start slowly. I like John Schaub's advice of buying one house/property at a time. You'll learn a lot on each one and you can adjust your strategy on each new one. That's different than spending all $760,000 at once. Congrats on saving that much money! And I like the end goal!
Dod you get any properties yet?
Very nice. Go as fast as you are comfortable. Just be sure to have a contingency should some things not go as planned. Don't assume that you'll easily get financing for all and that you'll quickly find good tenants and that there aren't any hidden issues, etc. Figure out the things that could go wrong and think of a plan for each.
What are your thoughts on buying Rental Units out of state?
Great advice Coach.
Hi. Should I take a lump at retirement to invest in a rental?
it depends on how much total retirement money you have. I'd be carefully putting 100% into a rental. You at least want some big cash reserves.
How many units do you have now? I'm leveraged in total $200,000 including my home. I have 5 rental doors and building another 2 for a total of 7. Thanks
We have about 110 units between me and a business partner. Sounds like you are doing great so far!
Great advice dude! I saved for 12 years as I rented. I invested extra money into my business and schooling. In October 2020 I bought my first home and put down 110K. The mortgage was for $182k leaving me owing 72k. My mortgage payment is $523/mo and I was renting for $1200/mo. That's a huge savings per month. I am aggressively paying down the mortgage and only have 48k left after 5 months of living in the new house. I compare my risk tolerance to spicy food. I LOVE spicy food but I don't like it so much that I can not enjoy eating the meal. If it's too spicy your a$$ will pay for it later.
Lol. Love your story. Thanks for sharing! Congrats on the house and the aggressive debt pay down. You will be there in no time.
You make a lot of money to pay down 24k in 5 months. That's almost 5k per month
What are you thoughts on using a line of credit to fund a down payment on a great cash flowing rental property Coach?
There is always more risk borrowing 100% of the purchase. If price hoes down, you still owe it all. With that said, getting started always involves calculated risks. So, i did something similar when i started. But i typically had a lot of equity and/or cash flow, as you said. Good luck!
Hi, If I remortgage my house and bought few buy to let interest only mortgage, is it a good idea to payoff my house using cash flow from rental properties?
It's probably a personal decision. I've personally paid off my home mortgage, but it was after years of reinvesting into more properties. So, you have to decide on the higher growth or reduced risk and peace of mind (with debt paid off).
Good Morning Coach,
I’m David from Canada and I’m following you and like you said in one of your vidéo us we are blessed to have RUclips video where we can have tips and clear explanations about the subject thank you again.
This is my plan I would like to start with a house with 3-4 beds price 175k and my down payment will be 10k-15k. With the bénéfice I’m thinking about after 1 or 2 year reinvest it in something bigger and so on. Do you think it is a good plan? And also I know nothing about house how I know that this house is not overpriced it a good deal or not,
Thank you
Hi David, thank you for the comment. Will you be living in this house or just renting it? It sounds like maybe you're living there since it's a smaller down payment. If so, you should watch my video on House Hacking: ruclips.net/video/D6tKiIzg07E/видео.html . It shows you about how to run the numbers on a house hack and a lot of other details.
Paying off your home is better, but if it’s a 30 year loan buying more properties is better.
Thoughts🤔?
Such Wisdom!!
Thanks Jill!
Hi Coach I have some cash and looking for a medium term return
What would u recommend
Hi Zen, what do you mean by medium term return? A certain length of time? And what do you need the money for at the end of that time?
I sold a property and could do some more flips or construction for sale however is there a suasion towards ownership for later gains
I'm considering paying off my house then using a HELOC to leverage down the line. I feel over leveraged and right now. Is this smart or is it inefficient?
I like that idea William. It frees you up, increases cashflow, and reduces risk now. But the HELOC allows you to still have access to the money for short-term good deals where you need to move fast.
If using HELOC for the downpayment, isn’t it going to be 100% leveraged?
thanks
my 10year plan is to pay off my house in the next 2 years. then start buying rental properties... 1 or 2 a year, so I'm hoping for 16 to 20 rental properties and retire by age 50
Pay off at least your own residence , then invest ,,risk free,,
When it comes to debt, get to zero and increase your net worth.
Simple plan that works for a lot of people.
pay down the debt, lower risk
Risk is that 4-letter word not talked about enough.
Pay them off