Rental Investor

[Steve Williams]

Newbie to BP.  Born and raised in Southern Maryland and looking to expand my rental retirement plan.  I have built 2 houses, hacked an apartment in the first, still have the first townhouse I bought in 1990 at age 23 and collect rent on that paid off property.  Always have liked real estate but seem torn between paying them off and leveraging.  Goal is to have 5-10 paid off rentals in retirement.

[Account Closed]

Welcome, a great place to be here at BP.

• I love Southern Maryland - a great place.
• When you have Free and Clear houses there are a number of things you can do to leverage the equity you have created.
• You could create a mortgage note and use that note as a down payment on investment properties
• You could do the same as above, but instead of one mortgage and one note, you could create split notes. This would give you a greater opportunity to control more real estate.
• You could pledge your equity for a credit line, use the line to buy and flip properties.
• You could use your equity along with others in a joint venture to be able to buy bigger and more profitable real estate (land, apartment houses, commercial buildings) each in the JV contributing and sharing in the profit.
• You could sell the property and up-grade using a tax deferred exchange (IRS code 1031)
• Equity in a free and clear house is LOCKED UP until you pull it out and do something creative to increase your net worth.
• You have a good start, but I think your goals are too conservative. You should have 50 or more properties by the time you are ready to retire.
• Oh, if you get real good at this, you may not have to look to retirement, you could just quit your job and do this stuff.