My first rental property is paid off!

General Real Estate Investing
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My first rental property is paid off!

Mark Ferguson
Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes

I had the bank wire the money today to pay off my first rental that I bought in Dec 2010. I paid $96,000 for it and put 25% down. I have been using the cash flow from my other 7 rentals to pay down this mortgage. Now I have an extra $400 a month to go towards paying the next one off!

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Alex CraigBusiness Member
Real Estate Professional · Memphis, TN · Member since 2009 · 1k+ posts · 1k+ votes
12y

Mark -- that is great. I have told many investors that is the way to go. I think a good strategy is to pay several off, then use the equity in those houses to buy more houses...then pay those off too.

Personally, I use my 30 year loans to cover the little cash flow I get on my 10 year mortgages and 15 year mortgages.

There are a lot of gurus who preach "create the lifestyle you want" by adding cash flow leveraged real estate to your income or even worse, quit your job and replace with leverages loans. In my opinion, that is dangerous.

901-848-9028
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  • Kyle J.
    Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
    12y

    Congrats @Mark Ferguson on paying it off so quick. It's a good feeling to own a house free & clear.

    2Reply
  • Christine C.
    Flipper/Rehabber · Indianapolis, IN · Member since 2013 · 61 posts · 43 votes
    12y

    congrats! that is AWESOME :)

    1Reply
  • John Adamkewitz
    Real Estate Investor · WI · Member since 2013 · 125 posts · 33 votes
    12y

    Congratulations Mark!

    I'm working on the same thing but a while to go yet. It must be an awful good feeling. I think I'm jealous ;)

    John

    1Reply
  • Alex CraigBusiness Member
    Real Estate Professional · Memphis, TN · Member since 2009 · 1k+ posts · 1k+ votes
    12y

    Mark -- that is great. I have told many investors that is the way to go. I think a good strategy is to pay several off, then use the equity in those houses to buy more houses...then pay those off too.

    Personally, I use my 30 year loans to cover the little cash flow I get on my 10 year mortgages and 15 year mortgages.

    There are a lot of gurus who preach "create the lifestyle you want" by adding cash flow leveraged real estate to your income or even worse, quit your job and replace with leverages loans. In my opinion, that is dangerous.

    901-848-9028
    3Reply
  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    12y

    Congrats @Mark Ferguson - That is so exciting

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    1Reply
  • Mark Ferguson
    OP
    Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    12y

    Thanks everyone. To be honest @Alex Craig I would leverage the crap out of everything if I could and still get great cash flow. With the difficulites in getting more than ten mortgages and the fact I have ARMs I figure it is better to pay off one at a time.

    0Reply
  • Stephen McCauley
    Investor · Louisville, KY · Member since 2014 · 30 posts · 3 votes
    12y
    Awesome job! Nothing wrong with increasing cash flow.
    1Reply
  • Christina R.
    Investor · DMV Maryland · Member since 2013 · 867 posts · 370 votes
    12y

    Excellent - you are very disciplined and in several years it will pay off with LOTS of disposable CASH when all your rentals are paid up!!! I hope to be as disciplined myself!

    1Reply
  • Alex CraigBusiness Member
    Real Estate Professional · Memphis, TN · Member since 2009 · 1k+ posts · 1k+ votes
    12y

    @markferguson Have you tried going to local banks to get more loans? Local banks here in Memphis have been really good lately at offering in house commercial loans. Terms are 10 and 15 year mortgages, 5.5 to 5.75%. I think the 15 year's have a rate adjustment at either 5 or 10 years. Some local banks here are even lending to out of state investors who have 10 or more loans.

    901-848-9028
    0Reply
  • Rob K.
    Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
    12y

    Great job. Your debt snowball will roll faster now!

    1Reply
  • John Chapman
    Investor · Dallas, TX · Member since 2009 · 718 posts · 913 votes
    12y

    That's very impressive @Mark Ferguson . I find it particularly impressive because you are also expanding your portfolio while pursuing debt paydown. (Usually, people seem to do one or the other.) Very cool.

    1Reply
  • Mark Ferguson
    OP
    Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    12y

    @Alex Craig I have a great local bank now, but I don't know if they will always be great. They will loan 5 or 7 year ARMs with 30 year amortization on as many properties as I want. Last one was 4.6%.

    0Reply
  • Stan Butler
    Investor · Roswell, GA · Member since 2008 · 231 posts · 104 votes
    12y

    Congratulations on a big milestone! I should be joining you here in about 3 months with my first free-and-clear property. I have been using profit from flipping properties to pay down the principal on my rental property with the lowest balance. I cannot wait!!

    2Reply
  • Gautam Venkatesan
    Investor · Dallas, TX · Member since 2013 · 619 posts · 128 votes
    12y

    That's awesome! Congrats @Mark Ferguson

    1Reply
  • Chanté Owens
    Insurance Agent · AZ · Member since 2013 · 306 posts · 161 votes
    12y

    Awesome and good for you!

    1Reply
  • Mark Ferguson
    OP
    Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    12y

    Sounds like a great plan @Stan Butler

    0Reply
  • Stas Khaylov
    National City, CA · Member since 2014 · 1 post · 0 votes
    12y

    I got a question for Mark Ferguson.

    I'm looking to get a place and rent it out

    I live in SD, CA

    how much of a cash flow should I look for

    PM if you can how did you grow so FAST

    Thank you and be happy!

    0Reply
  • Mark Ferguson
    OP
    Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    12y

    @Stas Khaylov

    I sent you a PM. Cash flow is different for everyone and every area.

    0Reply
  • Scott Isley
    Multi-family Investor · Encinitas, CA · Member since 2013 · 38 posts · 10 votes
    12y

    congratulations @Mark Ferguson Way to approach the real estate game be patient on your strategy!

    0Reply
  • Mark Ferguson
    OP
    Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    12y

    Thank you @Scott Isley I also wrote about paying off this property on the bigger pockets blog. http://www.biggerpockets.com/renewsblog/2014/02/09/paid-off-rental-property/

    0Reply
  • Edwin E.
    Investor · Tucson, AZ · Member since 2013 · 124 posts · 11 votes
    12y

    Congrats. I paid off my first rental in 2007. I know is a great feeling.

    0Reply
  • Mark Ferguson
    OP
    Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    12y

    Thabk you @Edwin E. have you paid off more?

    0Reply
  • Julie Cadman
    Real Estate Investor · Windsor, CO · Member since 2013 · 22 posts · 0 votes
    12y

    That's great Mark, congrats!!

    0Reply
  • Mark Ferguson
    OP
    Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    12y

    thank you @Julie Cadman !

    0Reply
  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    12y

    Mark, you just keep kicking a#$ and taking names daily!

    0Reply
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