Rural Oregon Investor...long time lurker, new poster

[Mary White]

Okay, so I've put off posting on here for a long time because I find that many of my personal beliefs differ greatly from many on here. Specifically, I shy away from using heavy levels of debt to build a business from even though many are wildly successful. It's a bit intimidating to step out and post with a slower safer strategy in place. We own 10 doors (one 6-plex and one 4-plex) that yield us a positive cash flow of $3000/month. We're on track to pay off the 6-plex in 24 months which will yield us an additional $1000 per month. Our 5 to 10-year goal is to have a $10,000 per month investment income and a net worth of $2,000,000. Our strategy has been to save up down payment money by living very small and saving big (we have never attempted a BRRR). I'm on here to learn what I can about different strategies. Hopefully by increasing my knowledge base I can muster up the courage to try and use more leverage to build our business. I'm currently working on the structure of our business to effectively manage our rentals and position ourselves for more aggressive growth in the future. Something interested about me is that I'm a homeschool Mom and I talked my husband into buying our first 6-plex using the tax records and savings from my Ebay business to obtain financing. It turned out so well that he let me purchase the 4-plex next and has basically given me (almost) free reign to build this business up.

[Bob B.]

Hi @Mary White!

I second @Randy Johnston's assessment that your business strategies sound to be on-point! So congrats on that front!

Not sure this will help you but it helped me a ton as I was learning. When you use leverage you almost have to shift your perspective and mindset.

If you take out a HELOC or refinance cash out or take on any kind of debt think of it this way:

You aware borrowing money that costs you 4, 5, 6, or whatever percent. It is your job as a savvy investor to quickly and efficiently put that money to work into another investment that yields a higher ROI with those borrowed funds.

So if you borrow at 4% and find an investment that is making you 6%, you get to keep the 2% spread as profit. Banks do it every day.

This is a very simple example and ignores all the other benefits you earn by purchasing more property... i.e. More depreciation, possible appreciation, larger resume, etc.

have to be careful and make good investments, as we all know. Leveraging will either move us fast forward, or just a fast backward if we make a bad move.

Hope that helps!