Rentals: Debt and Leverage, Free-and-Clear, or Happy Medium

Rentals: Debt and Leverage, Free-and-Clear, or Happy Medium

Investor · Indianapolis, IN · Member since 2015 · 393 posts · 116 votes

Hey guys! Surely this has been discussed before, but figured I'd start my own thread on this topic for convenience's sake (selfish, I know haha). 

Although my active real estate business is wholesaling, my goal is to channel the opportunities and income from wholesaling into a buy-and-hold approach, as I'm sure many others who find themselves in a similar situation do. While I've accumulated a decent amount of experience on the rental side over the last few years, as time goes on I continue to learn more about real estate financing, taxes, and my own sanity (lol), and as a result, my perspective and opinion on debt and how I personally approach it changes.

Undoubtedly, there are many pros to leveraging debt when investing. One can scale a lot quicker. One can take advantages of tax write-offs. It allows you to employ BRRRR (if done correctly). However, leveraging can also bring about its negatives. Your cash flow per unit is significantly affected. When scaling quickly, you have more properties to worry about and more potential headaches. It also makes you more vulnerable and susceptible to economic swings. Overall, it can add a lot more stress to your life, and while scaling and owning a ton of real estate sounds (is?) sexy, if it's detracting from your quality of life, one could argue it defeats the purpose; I personally know investors that went from owning 60+ SFR's with debt to selling most doors in order to own a fraction of them free-and-clear for the peace of mind and ability to "sleep better at night."

Of course, there is no one way to skin the cat, as different investors have different risk tolerance, and different approaches to this business in general given a wide array of varying factors. And so I'm curious:

As a buy-and-hold investor, where do you stand and why? Do you prefer to leverage as much as possible, or would you rather own free-and-clear? Have you found a happy medium with a mixture of both? Perhaps you throw debt on some, and not on others, or maybe you leverage each at 50%, or any other ratio that is not a typical 75% LTV (of course, this depends a lot on the lender), in order to cover more risk and utilize the advantages of leverage while safekeeping sanity. Regardless of approach, how did you arrive at your chosen relationship with debt (or lack-thereof) and what major points did you consider when arriving there?

There is no right or wrong way to this, and investors figure out what is personally "right" for them. I myself am still on the journey figuring out my ideal balance- which is why it'd be great hear how people approach this relationship in their personal investments. 

Would love to hear your thoughts!

Cheers

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Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
6y

It's a question of basic math.  Everything that comes out of your pocket is a cost to you (as in paid for by you).  Everything that is paid for out of the rent is a cost to the tenant (as in paid for by the tenant).  In order to make a profit, you have to recover "your" costs.  The larger "your" costs are, the more "you" have to recover and the longer it takes.  The larger the DP, the more "you" paid for the property since the rest of it, if leveraged, is paid for by the tenant...as long as you have positive CF.

Example:  $100k property; Cash Flow without Mortgage = $10k/year;  CF w/ mortgage = $5k/yr

Option #1 - 100% cash purchase of 1 property
Cost = $100k; 
Equity  = $100k
CF/Yr = $10k
# yrs to recovery of cost = 10
Profit after 10 years = 0

Option #2a - 20% DP; financed = $80k of 1 property

Cost = $20k
Equity = $20k
CF/Yr = $5k
# yrs to recovery of cost = 4
Profit after 10 years = $30k

Both properties appreciate the same based on $100k in property value

Option #2b - 20% DP; financed = $80k times 5 properties (using the same $100k)
Cost = $20k/property = $100k
Equity = $20k/property = $100k
CF/Yr = $5k/property = $25k (5 propertis)
# yrs to recovery of cost = 4...all 5 are recovering simultaneously 
Profit after 10 years = $150k

All 5 properties appreciate the same, but the total appreciation is now based on $500k in property value, meaning you would be gaining appreciation 5 times faster than the first 2 Options.

See this reply in the discussion

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    6y

    In many (most) markets, people are unlikely to be able to pay cash for a home. Where I invest, the entry level price for a home is $200K ($350K in the more expensive town). I think putting 20% down and mortgaging the rest for the longest term possible is the best. I don't do the refinance on the BRRR. I take out the mortgage and then let the tenants pay it down. I have all the rentals I want now, so I am also working on paying down the mortgages ahead of retirement.

  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    6y

    It's a question of basic math.  Everything that comes out of your pocket is a cost to you (as in paid for by you).  Everything that is paid for out of the rent is a cost to the tenant (as in paid for by the tenant).  In order to make a profit, you have to recover "your" costs.  The larger "your" costs are, the more "you" have to recover and the longer it takes.  The larger the DP, the more "you" paid for the property since the rest of it, if leveraged, is paid for by the tenant...as long as you have positive CF.

    Example:  $100k property; Cash Flow without Mortgage = $10k/year;  CF w/ mortgage = $5k/yr

    Option #1 - 100% cash purchase of 1 property
    Cost = $100k; 
    Equity  = $100k
    CF/Yr = $10k
    # yrs to recovery of cost = 10
    Profit after 10 years = 0

    Option #2a - 20% DP; financed = $80k of 1 property

    Cost = $20k
    Equity = $20k
    CF/Yr = $5k
    # yrs to recovery of cost = 4
    Profit after 10 years = $30k

    Both properties appreciate the same based on $100k in property value

    Option #2b - 20% DP; financed = $80k times 5 properties (using the same $100k)
    Cost = $20k/property = $100k
    Equity = $20k/property = $100k
    CF/Yr = $5k/property = $25k (5 propertis)
    # yrs to recovery of cost = 4...all 5 are recovering simultaneously 
    Profit after 10 years = $150k

    All 5 properties appreciate the same, but the total appreciation is now based on $500k in property value, meaning you would be gaining appreciation 5 times faster than the first 2 Options.

  • Investor · Indianapolis, IN · Member since 2015 · 393 posts · 116 votes
    6y

    Thanks, @Theresa Harris! You're completely right that most investors aren't able to purchase properties outright, specially depending on their respective markets- in general, I'd that that applies to pretty much any market, almost. In hindsight, my post does assume the investors ability to not only purchase one property, but several, in cash. My mistake there for sure.

  • Investor · Indianapolis, IN · Member since 2015 · 393 posts · 116 votes
    6y

    @Joe Villeneuve yup, makes sense. Moreover, those scenarios don't take into account the tax advantages of the debt. I think the only way to compare those scenarios apple-to-apples would be Option A and Option 2B, as it's taking into account the same amount of cash being invested, and one can look at the opportunity cost of one vs the other. Undoubtedly 2B seems beneficial- however, those are still loose numbers for the sake of example, and might not be as accurate when it comes to comparing the differences of cash flow from one option to the other. I would say it is in that difference (let's say, for example, you're only cash flowing $50-$100 per door, arguably a slim margin) that one can better assess the risk of life events (whether your own, the tenants', or a combination of both) and how they affect your investment(s) as a whole.

  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    6y
    Originally posted by @Alain Perez-Majul:

    @Joe Villeneuve yup, makes sense. Moreover, those scenarios don't take into account the tax advantages of the debt. I think the only way to compare those scenarios apple-to-apples would be Option A and Option 2B, as it's taking into account the same amount of cash being invested, and one can look at the opportunity cost of one vs the other. Undoubtedly 2B seems beneficial- however, those are still loose numbers for the sake of example, and might not be as accurate when it comes to comparing the differences of cash flow from one option to the other. I would say it is in that difference (let's say, for example, you're only cash flowing $50-$100 per door, arguably a slim margin) that one can better assess the risk of life events (whether your own, the tenants', or a combination of both) and how they affect your investment(s) as a whole.

    Those numbers are based on actual properties...I didn't just pull them out of the air to make a point.  If the property cash flowed $50-100/month I would touch them.

  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    6y

    @Alain Perez-Majul @Joe Villeneuve is right. Every time I read an analysis like that it gives me goose-bumps. But, age of the investor also comes into play here. I am 75 and no longer trying to scale. My properties are paid for, and I have plenty of reserves. The rents I collect along with social security keep me from having to work as a cashier at Walmart-life is good. If I were younger, I'd be following Joe.

  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    6y
    Originally posted by @Bjorn Ahlblad:

    @Alain Perez-Majul @Joe Villeneuve is right. Every time I read an analysis like that it gives me goose-bumps. But, age of the investor also comes into play here. I am 75 and no longer trying to scale. My properties are paid for, and I have plenty of reserves. The rents I collect along with social security keep me from having to work as a cashier at Walmart-life is good. If I were younger, I'd be following Joe.

    I'm only 64 though.  LOL

  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    6y
    Originally posted by @Joe Villeneuve:

    It's a question of basic math.  Everything that comes out of your pocket is a cost to you (as in paid for by you).  Everything that is paid for out of the rent is a cost to the tenant (as in paid for by the tenant).  In order to make a profit, you have to recover "your" costs.  The larger "your" costs are, the more "you" have to recover and the longer it takes.  The larger the DP, the more "you" paid for the property since the rest of it, if leveraged, is paid for by the tenant...as long as you have positive CF.

    Example:  $100k property; Cash Flow without Mortgage = $10k/year;  CF w/ mortgage = $5k/yr

    Option #1 - 100% cash purchase of 1 property
    Cost = $100k; 
    Equity  = $100k
    CF/Yr = $10k
    # yrs to recovery of cost = 10
    Profit after 10 years = 0

    Option #2a - 20% DP; financed = $80k of 1 property

    Cost = $20k
    Equity = $20k
    CF/Yr = $5k
    # yrs to recovery of cost = 4
    Profit after 10 years = $30k

    Both properties appreciate the same based on $100k in property value

    Option #2b - 20% DP; financed = $80k times 5 properties (using the same $100k)
    Cost = $20k/property = $100k
    Equity = $20k/property = $100k
    CF/Yr = $5k/property = $25k (5 propertis)
    # yrs to recovery of cost = 4...all 5 are recovering simultaneously 
    Profit after 10 years = $150k

    All 5 properties appreciate the same, but the total appreciation is now based on $500k in property value, meaning you would be gaining appreciation 5 times faster than the first 2 Options.

     This lays it out nice and clearly.

  • Rental Property Investor · Member since 2020 · 215 posts · 137 votes
    6y

    @Joe Villeneuve

    What if properties do not gain value over time? That happened in hot markets due to grown inventory. Add a bit of recession and have the rental pushed to lower, or vacancy growing...

    Thats not just math.

    Risk tolerance is key. And peace of mind has some value.

    Personally I have 7 properties in The Woodlands, Tx area. All paid off. Now i am starting to put some leverage, starting by getting some mortgage on my own house. I wanna add 20% loan/80% cash. Will increase slowly. My goal is to have equity and in 15 years no debt, being able to have 25k/month of free cash flow and live well

  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    6y
    Originally posted by @Alexandre Marques dos Santos:

    @Joe Villeneuve

    What if properties do not gain value over time? That happened in hot markets due to grown inventory. Add a bit of recession and have the rental pushed to lower, or vacancy growing...

    Thats not just math.

    Risk tolerance is key. And peace of mind has some value.

    Personally I have 7 properties in The Woodlands, Tx area. All paid off. Now i am starting to put some leverage, starting by getting some mortgage on my own house. I wanna add 20% loan/80% cash. Will increase slowly. My goal is to have equity and in 15 years no debt, being able to have 25k/month of free cash flow and live well

     It's just math.  What happens if your property goes "south" for some reason?  You get rid of it before it takes you with it.  Then you move forward with whatever you got out of the property after the sale (cash), and recover the loss, and start moving forward with gains again.

  • Rental Property Investor · Springfield, MO · Member since 2013 · 109 posts · 92 votes
    6y

    @Joe Villeneuve very nice analysis. Thank you.

    I prefer less debt/fewer headaches. But seeing your math makes me consider taking on some debt a bit more!

  • Rental Property Investor · Springfield, MO · Member since 2013 · 109 posts · 92 votes
    6y

    @Bjorn Ahlblad age definitely plays a part in this. I, too, have acquired all the properties I want. And I own most of them outright. But they do keep me busy.

    I wish more was written on this topic...best way to escape the hampster wheel after scaling up and owning all the RE you want to a more passive income.

  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    6y
    Originally posted by @Sherry Byrne:

    @Bjorn Ahlblad age definitely plays a part in this. I, too, have acquired all the properties I want. And I own most of them outright. But they do keep me busy.

    I wish more was written on this topic...best way to escape the hampster wheel after scaling up and owning all the RE you want to a more passive income.

     It's just a system...with a plan laid out with numbers with "$" in front of them that define criteria during the specific timeline in that plan.  Then you just execute specific strategies in specific micro markets that will deliver the number$ you require.

    Simple.

    There are no individual properties, just a series of them connected by this plan, where every decision you make is based on how the exit (your cash) from one property leads specifically to the entrance of the next...and so on. Each step (property/deal) you execute will most likely involve different markets and strategies, because the criteria from the plan's timeline will be different...an REI isn't a one size fits all system.

    Keep your cash moving forward (verb), and only keep it locked up (equity) long enough for it to make "friends", and move forward again.  Each time it moves forward, it grows exponentially.  When it remains a "noun" (lazy money), it loses money for you, and will eat away at what you think you've already made.  I bet you thought "cash" was a noun.  If it becomes one, you lose.

  • Investor · Indianapolis, IN · Member since 2015 · 393 posts · 116 votes
    6y
    Originally posted by @Joe Villeneuve:
    Originally posted by @Alain Perez-Majul:

    @Joe Villeneuve yup, makes sense. Moreover, those scenarios don't take into account the tax advantages of the debt. I think the only way to compare those scenarios apple-to-apples would be Option A and Option 2B, as it's taking into account the same amount of cash being invested, and one can look at the opportunity cost of one vs the other. Undoubtedly 2B seems beneficial- however, those are still loose numbers for the sake of example, and might not be as accurate when it comes to comparing the differences of cash flow from one option to the other. I would say it is in that difference (let's say, for example, you're only cash flowing $50-$100 per door, arguably a slim margin) that one can better assess the risk of life events (whether your own, the tenants', or a combination of both) and how they affect your investment(s) as a whole.

    Those numbers are based on actual properties...I didn't just pull them out of the air to make a point.  If the property cash flowed $50-100/month I would touch them.

     I think you meant "wouldn't," but yes, I agree!

  • Investor · Indianapolis, IN · Member since 2015 · 393 posts · 116 votes
    6y
    Originally posted by @Alexandre Marques dos Santos:

    @Joe Villeneuve

    What if properties do not gain value over time? That happened in hot markets due to grown inventory. Add a bit of recession and have the rental pushed to lower, or vacancy growing...

    Thats not just math.

    Risk tolerance is key. And peace of mind has some value.

    Personally I have 7 properties in The Woodlands, Tx area. All paid off. Now i am starting to put some leverage, starting by getting some mortgage on my own house. I wanna add 20% loan/80% cash. Will increase slowly. My goal is to have equity and in 15 years no debt, being able to have 25k/month of free cash flow and live well

     Great points! I think you brought up something that is important. Not only is risk tolerance a factor, and will vary from investor to investor, but also the investor's ultimate goal. Perhaps for someone else, where you're at now with 7 paid off properties (assuming your primary as well) that are spitting monthly income (whatever amount that might be; assuming it is less than the $25k a month you'd like to reach), that is more than enough for them and they would be happy with that. On the other hand, you'd like to get to $25k a month... and maybe another investor decides that for them, they "need"/want $50k of passive to reach their intended goal and live well. It's great that it's so subjective!

  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    6y
    Originally posted by @Alain Perez-Majul:
    Originally posted by @Joe Villeneuve:
    Originally posted by @Alain Perez-Majul:

    @Joe Villeneuve yup, makes sense. Moreover, those scenarios don't take into account the tax advantages of the debt. I think the only way to compare those scenarios apple-to-apples would be Option A and Option 2B, as it's taking into account the same amount of cash being invested, and one can look at the opportunity cost of one vs the other. Undoubtedly 2B seems beneficial- however, those are still loose numbers for the sake of example, and might not be as accurate when it comes to comparing the differences of cash flow from one option to the other. I would say it is in that difference (let's say, for example, you're only cash flowing $50-$100 per door, arguably a slim margin) that one can better assess the risk of life events (whether your own, the tenants', or a combination of both) and how they affect your investment(s) as a whole.

    Those numbers are based on actual properties...I didn't just pull them out of the air to make a point.  If the property cash flowed $50-100/month I would touch them.

     I think you meant "wouldn't," but yes, I agree!

     OOOOOOps!!!!  Yep.  (Can I blame spellchecker?)

  • Investor · Indianapolis, IN · Member since 2015 · 393 posts · 116 votes
    6y
    Originally posted by @Sherry Byrne:

    @Bjorn Ahlblad age definitely plays a part in this. I, too, have acquired all the properties I want. And I own most of them outright. But they do keep me busy.

    I wish more was written on this topic...best way to escape the hampster wheel after scaling up and owning all the RE you want to a more passive income.

     Might be very elementary and simple for a lot of seasoned investors, but I really enjoyed reading George Antone's "The Wealthy Code," "The Debt Millionaire," and "The Banker's Code" (of importance, IMO, in that order) and got a decent amount out of them. Maybe check them out!

  • Investor · Indianapolis, IN · Member since 2015 · 393 posts · 116 votes
    6y
    Originally posted by @Joe Villeneuve:
    Originally posted by @Sherry Byrne:

    @Bjorn Ahlblad age definitely plays a part in this. I, too, have acquired all the properties I want. And I own most of them outright. But they do keep me busy.

    I wish more was written on this topic...best way to escape the hampster wheel after scaling up and owning all the RE you want to a more passive income.

     It's just a system...with a plan laid out with numbers with "$" in front of them that define criteria during the specific timeline in that plan.  Then you just execute specific strategies in specific micro markets that will deliver the number$ you require.

    Simple.

    There are no individual properties, just a series of them connected by this plan, where every decision you make is based on how the exit (your cash) from one property leads specifically to the entrance of the next...and so on. Each step (property/deal) you execute will most likely involve different markets and strategies, because the criteria from the plan's timeline will be different...an REI isn't a one size fits all system.

    Keep your cash moving forward (verb), and only keep it locked up (equity) long enough for it to make "friends", and move forward again.  Each time it moves forward, it grows exponentially.  When it remains a "noun" (lazy money), it loses money for you, and will eat away at what you think you've already made.  I bet you thought "cash" was a noun.  If it becomes one, you lose.

     Ugh, this hit home. I've been sitting on some cash for a couple of years without pulling the trigger, and it's been giving me (irrational?) anxiety haha

  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    6y
    Originally posted by @Alain Perez-Majul:
    Originally posted by @Joe Villeneuve:
    Originally posted by @Sherry Byrne:

    @Bjorn Ahlblad age definitely plays a part in this. I, too, have acquired all the properties I want. And I own most of them outright. But they do keep me busy.

    I wish more was written on this topic...best way to escape the hampster wheel after scaling up and owning all the RE you want to a more passive income.

     It's just a system...with a plan laid out with numbers with "$" in front of them that define criteria during the specific timeline in that plan.  Then you just execute specific strategies in specific micro markets that will deliver the number$ you require.

    Simple.

    There are no individual properties, just a series of them connected by this plan, where every decision you make is based on how the exit (your cash) from one property leads specifically to the entrance of the next...and so on. Each step (property/deal) you execute will most likely involve different markets and strategies, because the criteria from the plan's timeline will be different...an REI isn't a one size fits all system.

    Keep your cash moving forward (verb), and only keep it locked up (equity) long enough for it to make "friends", and move forward again.  Each time it moves forward, it grows exponentially.  When it remains a "noun" (lazy money), it loses money for you, and will eat away at what you think you've already made.  I bet you thought "cash" was a noun.  If it becomes one, you lose.

     Ugh, this hit home. I've been sitting on some cash for a couple of years without pulling the trigger, and it's been giving me (irrational?) anxiety haha

     Equity is also your cash sitting on it butt...doing absolutely nothing for you.

  • Rental Property Investor · Raleigh, NC · Member since 2019 · 11 posts · 7 votes
    6y

    @Joe Villeneuve I was thinking of the same thing that equity is sitting there doing nothing. I recently refi-ed Rental#1 that has some equity on it, took cash out to down pay another house which will be Rental #2. Now Rental#2 is also rented. This is my baby step to scale. Hope it works out as I planned.

  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    6y
    Originally posted by @Jenny Li:

    @Joe Villeneuve I was thinking of the same thing that equity is sitting there doing nothing. I recently refi-ed Rental#1 that has some equity on it, took cash out to down pay another house which will be Rental #2. Now Rental#2 is also rented. This is my baby step to scale. Hope it works out as I planned.

    You're using the BRRRR method...which sounds good, but has limits to it, and you really aren't using your equity when you refi. Your equity is still in the original property and is being used as collateral for the refi loan. If it was the same money, you wouldn't have to pay for it again. There's a better way.

  • Rental Property Investor · Greensboro, NC · Member since 2019 · 99 posts · 63 votes
    6y

    This is such an interesting conversation because it sort of relates to my other hobbies - Tabletop Board Games.

    In some styles of games, you build an "engine" - something that generates a resource for you so that you can go and build your engine bigger so you can create even more resources. However, at some point in the game, in order to win, you have to stop focusing on your "engine" and start thinking about the game winning criteria - "victory points". However, other players or just the game itself can "attack" you and if you can't withstand the "attack", then you can lose your engine that you have worked so hard to build.

    In the Real Estate Investing World:

    Engine = Cash flowing rentals that allow you to generate capital and equity

    Victory Points = Cash that can be used however you wish

    Attack = Any expenses, whether seen or unforeseen

    It's a bit of an oversimplification, but it helps me understand how I should function. I want be prepared for unforeseen expenses and circumstances so that I can mitigate risk, but I should do what I can do build my portfolio, so that when the day comes when I just want to use my cash, I can :)

    It's all a balancing act.

  • Investor · Indianapolis, IN · Member since 2015 · 393 posts · 116 votes
    6y

    @Jenny Li That's awesome, Jenny, good luck! With the current environment, I have no doubt rates were favorable for you, so like you said, hope everything goes as planned!

  • Investor · Indianapolis, IN · Member since 2015 · 393 posts · 116 votes
    6y
    Originally posted by @Joe Villeneuve:
    Originally posted by @Jenny Li:

    @Joe Villeneuve I was thinking of the same thing that equity is sitting there doing nothing. I recently refi-ed Rental#1 that has some equity on it, took cash out to down pay another house which will be Rental #2. Now Rental#2 is also rented. This is my baby step to scale. Hope it works out as I planned.

    You're using the BRRRR method...which sounds good, but has limits to it, and you really aren't using your equity when you refi. Your equity is still in the original property and is being used as collateral for the refi loan. If it was the same money, you wouldn't have to pay for it again. There's a better way.

     Joe, can you explain what you meant here? In regards to equity, how do you bypass the down payment?

  • Investor · Indianapolis, IN · Member since 2015 · 393 posts · 116 votes
    6y
    Originally posted by @Nathan Faucett:

    This is such an interesting conversation because it sort of relates to my other hobbies - Tabletop Board Games.

    In some styles of games, you build an "engine" - something that generates a resource for you so that you can go and build your engine bigger so you can create even more resources. However, at some point in the game, in order to win, you have to stop focusing on your "engine" and start thinking about the game winning criteria - "victory points". However, other players or just the game itself can "attack" you and if you can't withstand the "attack", then you can lose your engine that you have worked so hard to build.

    In the Real Estate Investing World:

    Engine = Cash flowing rentals that allow you to generate capital and equity

    Victory Points = Cash that can be used however you wish

    Attack = Any expenses, whether seen or unforeseen

    It's a bit of an oversimplification, but it helps me understand how I should function. I want be prepared for unforeseen expenses and circumstances so that I can mitigate risk, but I should do what I can do build my portfolio, so that when the day comes when I just want to use my cash, I can :)

    It's all a balancing act.

     This was my angle with my original post :)

    Wanted to hear how different investors "play their game" and how they approach their strategy to "win."

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