My retirement plan, whats yours?

16 Replies

Early 40s investor here with 6 sfr. I plan on retiring 15 years from now. We can buy 4 sfr a year with a purchase price of 100k each and brrrr each one. Plan on stopping at 20. My partner and i make 150k a year each.

Plan A: is to get to 20 single family houses in 3 to 4 years and start paying them down or

Plan B: start paying them down after 10 next year. We would be able to pay one off every year. But keep purchasing the 4 a year till we get 20.

I understand the argument of just keep buying more money with leverage with cheap interest rates, but we like the idea of free and clear. Less stress, less risk is more appealing to us. What are you retirement plans and any suggestions about mine? Thanks.

@Lee Cruz I would think you want to acquire the 20 properties first and then begin to pay them down. Starting with your property with the oldest loan and working your way to the newer purchases.

Sounds totally attainable! 

I plan to "retire" from my day job in about 14 months! However, I will never retire from building my portfolio, searching for deals and building businesses. I just want to free up more time to do what makes me happy and feel fulfilled with purpose.


"The problem with having a job is that it gets in the way of becoming rich."

- Robert Kiyosaki

Always loved that one :)

@Lee Cruz good goals and plan.........in order to scale it comes with some debt or it is too slow. Good to decide how much debt and where in the cycle will you carry the most, least etc. Are your properties local to you or out of province.

I'm retired and my tenants are keeping me off the streets, My wife is the PM. It definitely works.

Originally posted by @Bryan Bouchard :

Sounds totally attainable! 

I plan to "retire" from my day job in about 14 months! However, I will never retire from building my portfolio, searching for deals and building businesses. I just want to free up more time to do what makes me happy and feel fulfilled with purpose.


"The problem with having a job is that it gets in the way of becoming rich."

- Robert Kiyosaki

Always loved that one :)

oh I don't plan on stopping, at 20 properties I plan  on actively paying them down. By the 10th property paid off the portfolio can start paying them down itself. I plan on buying until my brain cant put a deal together 

 

Originally posted by @Bjorn Ahlblad :

@Lee Cruz good goals and plan.........in order to scale it comes with some debt or it is too slow. Good to decide how much debt and where in the cycle will you carry the most, least etc. Are your properties local to you or out of province.

I'm retired and my tenants are keeping me off the streets, My wife is the PM. It definitely works.

 All my properties are local. 15 minute drive for me. At how many units sis you retire? How many do you have now?

@Lee Cruz wow! All within 15 minutes that is enviable. Mine are up to an hour away max. I have 18 units all paid for, at my age I don't want to be carrying debt. I still look at properties, but I don't know that I will be buying-it is hard to stop looking!

I was in Winnipeg one dark and cold December, probably 1981-maybe for 3 days. The bars were doing a booming business! Fun times :))

I know you said you think having mortgages is more risky but it really isn't and you can build wealth so much faster. Even if you pay off the mortgages you still have taxes, insurance and maintenance each month. There is no such thing as debt free real estate. If you don't manage the property well you will lose it either way. Plus, you two should be buying an apartment complex not more single-family. You make too much money....LOL.

Rather than counting properties, what is material is the income that they are/are not generating.  If you could achieve your goal with one property, why buy 20?  How much income do you project these properties will generate in the years before and after your retirement.  once you have completed that analysis, the strategy as to when to pay off mortgages should become apparent. 

I'm not sure how the multi family situation is in Winnipeg, but in Chicago (where I live) 2, 3, and 4 flats are very common. I would consider picking up a couple of those if you can. Why buy four houses in one year when you could just buy one and meet your goal? It saves a lot of hassle in the purchasing, and it means you only have to take out one mortgage instead of four. Plus, it's more convenient for maintenance.

By the way, I love Winnipeg. My college friends and I took a road trip up there when we were 19 for a week. Great city.

Originally posted by @Lee Cruz :
Originally posted by @Bryan Bouchard:

Sounds totally attainable! 

I plan to "retire" from my day job in about 14 months! However, I will never retire from building my portfolio, searching for deals and building businesses. I just want to free up more time to do what makes me happy and feel fulfilled with purpose.


"The problem with having a job is that it gets in the way of becoming rich."

- Robert Kiyosaki

Always loved that one :)

oh I don't plan on stopping, at 20 properties I plan  on actively paying them down. By the 10th property paid off the portfolio can start paying them down itself. I plan on buying until my brain cant put a deal together 

 

I'm actually curious about this comment. From your title and original post, it sounded like the goal was to get to 20 paid off and to retire. The description sounds like a great goal and plan. 

This follow on comment though does not sound like retirement.  It sounds like a mid career change to full time real estate. I'd consider the 20 paid off and receiving decent income with minimal to moderate management effort retirement. 

I guess I find it curious why the goal of so many is to continue to grow and scale as much as possible. Why? Why isnt the goal to achieve comfortable financial security with less effort and more free time (eg 20 paid off)?
Originally posted by @Stephen J Davis :

I know you said you think having mortgages is more risky but it really isn't and you can build wealth so much faster. Even if you pay off the mortgages you still have taxes, insurance and maintenance each month. There is no such thing as debt free real estate. If you don't manage the property well you will lose it either way. Plus, you two should be buying an apartment complex not more single-family. You make too much money....LOL.

I like single families because i can liquidate if i need to. Harder with an apartment complex. I'll always have expenses. Property management, taxes, insurance, repairs etc. That i know. What i mean is, id rather have 20 units paid off rather than have 100 units leveraged equaling the same amount of cashflow income. More units, more problems. More tenants more problems. I understand taking 100k to pay off my 100k property i lose opportunity cost in buying more properties, but at what point does one say enough is enough? For a simple guy like me having a large cash reserve and 10k income a month is a pretty good baseline. 

But im open to your suggestion, maybe you can sway me the other way. 

Originally posted by @Darius Ogloza :

Rather than counting properties, what is material is the income that they are/are not generating.  If you could achieve your goal with one property, why buy 20?  How much income do you project these properties will generate in the years before and after your retirement.  once you have completed that analysis, the strategy as to when to pay off mortgages should become apparent. 

My rentals generate $1300 to $1600 a month for a 100k house. In todays dollars if they were paid off that would be $1000 a month rounded down. 20 would be 20k a month split between my partner and i. Thats todays dollars. 

 

Originally posted by @Forrest Williams :

I'm not sure how the multi family situation is in Winnipeg, but in Chicago (where I live) 2, 3, and 4 flats are very common. I would consider picking up a couple of those if you can. Why buy four houses in one year when you could just buy one and meet your goal? It saves a lot of hassle in the purchasing, and it means you only have to take out one mortgage instead of four. Plus, it's more convenient for maintenance. 

By the way, I love Winnipeg. My college friends and I took a road trip up there when we were 19 for a week. Great city.

Who visits Winnipeg for fun? Lol just kidding glad you had a good time. I have a duplex. Mostly single famlies now. The tenant profile is much higher for single family homes in my opinion. 

 

Originally posted by @Lee Cruz :
Originally posted by @Forrest Williams:

I'm not sure how the multi family situation is in Winnipeg, but in Chicago (where I live) 2, 3, and 4 flats are very common. I would consider picking up a couple of those if you can. Why buy four houses in one year when you could just buy one and meet your goal? It saves a lot of hassle in the purchasing, and it means you only have to take out one mortgage instead of four. Plus, it's more convenient for maintenance. 

By the way, I love Winnipeg. My college friends and I took a road trip up there when we were 19 for a week. Great city.

Who visits Winnipeg for fun? Lol just kidding glad you had a good time. I have a duplex. Mostly single famlies now. The tenant profile is much higher for single family homes in my opinion. 


 

 19 year olds who want to legally drink haha.

Sounds like a solid plan. With that income you can continue to grow but if you choose you can pay them off over time. You can also bank your savings and up retirement accounts. Your sitting real pretty. Best of luck to you. 

Originally posted by @Lee Cruz :

Early 40s investor here with 6 sfr. I plan on retiring 15 years from now. We can buy 4  sfr a year with a purchase price of 100k each and brrrr each one. Plan on stopping at 20. My partner and i make 150k a year each. 

Plan A: is to get to 20 single family houses in 3 to 4 years and start paying them down or

Plan B: start paying them down after 10 next year. We would be able to pay one off every year. But keep purchasing the 4 a year till we get 20.

I understand the argument of just keep buying more money with leverage with cheap interest rates, but we like the idea of free and clear. Less stress, less risk is more appealing to us. What are you retirement plans and any suggestions about mine? Thanks. 

I’m “retired.”  

Everybody's debt tolerance is different and I find mine changing as I get older. That said, there are closing costs associated with mortgages so it rarely makes sense to me to pay them down early as that essentially increases your APR, especially if you are going to turn around and get new mortgages on new properties.

It makes more sense to me to either scale faster or buy the “next one”with cash.  Between the two choices I’d go with plan A and it sounds like you should be able to buy the last 2 or 3 with cash.