Trying to achieve financial freedom - WHAT NOW?

[Steve S.]

Here's my situation.  I'm 40 years old.  I have 4 rental properties.  1 has about 50% equity.  The other 3 have around 30% equity.

I have about $800,000 in my 401k.

I have about $200,000 in cash.

The 4 properties are on 30 year notes and all about 2-3 years into paying off the note.  Total owed is around $750,000.  

I gross around $110,000 per year in rent and pocket about $3,200 / month depending on how many expenses I have.

My goal is to achieve financial freedom soon.  Preferably in the next 5 years or so.

I would retire today and live on about $40,000 per year and stay within the 4% SWR.

I can pay off about $10,000 per month on the properties.

What should I do to get there faster? Should I add more properties? Should I only BRRR? I don't want to write any more 25% down checks. Should I just pound down these notes $10,000 per month?

I'd like to grow my portfolio and expand my cash flow ability while achieving financial freedom in 60 months or less.  

What am I doing wrong?  What would you recommend?

[Reaz Ahmed]

I don't think you're doing anything wrong.

I would recommend that you continue to buy more properties. 

Based on the numbers provided, I'm assuming your average purchase price was ~$250K and you put down ~20% or $50K on each. If these numbers are in the ballpark, you have sufficient cash to buy 4 more similar properties, and increase your annual net income to ~$80K (that offers a lot more breathing room).

Since you purchased your properties 2-3 years ago, I'm assuming you have very LOW rates on your notes; and therefore, I would not be in a rush to pay down these loans. Instead, take advantage of the continued low rates to buy more. As mentioned above by Todd and Cathy, use the leverage.

I would not recommend investing any additional money in the stock market because you already have $800K of your 401K invested in stocks/funds.

You're in great shape, keep going!

PS - I was able to take out a loan against my 401K with a repayment plan and pay myself interest. It's a great way to pay yourself, but the max term I believe is 5-6 years.