Early retirement -Is it possible? - Taking care of debt -

OK… so here I am, continuing to write about my goal of early retirement.  I really hope I have something to tell you on a monthly basis…until the day we retire…that way…we will all know if it was possible.

Anyways, about one of the most important parts of retirement….FINANCE!  Let me talk about our finances concerning our rentals. At one point, we had two single family houses paid in full, all cash. We used the earnings of our first flip to purchase our first rental, a HUD house. We made some renovations to this house using our regular income to finance the expenses. So it was great! We had a rental property fully paid for and rented …bringing in great cashflow. We continued to buy properties, financed by our Bank. About 2 years in the business, we found a house very close to another rental…and it was for sale…dirt cheap…we bought it cash and renovated it with cash. So… 2 rentals fully paid for and bringing in great cashflow!  We continued to grow….and then… a great opportunity…. a fabulous house on a cul-de-sac with a swimming pool and all! It was a foreclosure. We purchased the house for a great price…and took a HELOC on one of our fully paid rentals to do the needed renovations on this house. We moved to this house and currently live there…but the trade off…. Only one free and clear rental property left. Then came another opportunity…and this time…it was a run down 12-plex… great location… great price….an opportunity that does not come to many times around. So, we did it…purchased the property and took another HELOC on the other free and clear rental to complete the renovations needed on the 12-plex.   So, for some time, (still now) it felt like instead of moving forward, we were moving backwards…. More debt!  But all in all… I think it is just the way to grow… it takes money to make money? Well… in this case…it is what we’re doing, so I really hope so!

Now, my plan of attack (against debt that is) …pay off the HELOC’s first - as soon as possible. We will allocate all monthly revenue to additional principal payments of the Haloc’s. This should help us get rid of them in about 26 months. We will see how it all goes! The plan is to use the snowball effect in paying off debt. That is…as soon as one is paid off…use the same amount and allocate it to another principal payment to pay IT off sooner.