All Forum Posts by: Robert Grant McEwen

Depends upon how involved you want to be. I'm pretty involved, and have a miter saw, table saw, jig saw, circular saw, etc... Many of those are cordless, and I have a bunch of spare batteries. But you might not need any of those if you're not going to be doing the actual construction / repairs. 

Basic landlord tools should include a lot of the above, but also a toilet auger (one that has the plastic sleeve to prevent scratching porcelain). Also, while I have a couple 20v cordless drills, it's nice to have a smaller one (such as this one: https://www.walmart.com/ip/HyperTough-12V-Lithium-Drill/45715101) which is easier to port around. Get some drill bits (a set specifically for power drills, such as at the following link). 

Re: Dave Ramsey, I'm certainly not knocking him. I think that he does a very good service to many individuals. If more people would listen to his message on personal responsibility, the cost of all of our mortgages would go down as the cost of debt would go down. 

I do think that his basic message about debt is off though. Debt CAN be bad, but it is not per se bad. Credit cards can be bad, but are not necessarily so. 

Warning: not so humble brag coming up, but with a point to show what you can do with credit cards: 

My wife and I have roughly 100 active credit cards between the two of us. My wife's credit report is 47 pages. But we've never paid a penny in interest. We've never paid a late fee. We have credit scores near 800. We do it to make miles and other credit card points. On credit card points / miles we've flown to Europe twice, Tahiti, Australia, New Zealand, Brazil, the West Coast (most of the time in business class), as well as going to Hawaii and ski resorts every year for 13 years, with a family of 6. We pay for rental car and hotels with points too. This is for points that the credit card companies give us for using their card. If we paid with a debit card like DR wants us to, we wouldn't have had those experiences. We would have paid far more for far fewer vacations. 

We've also been able to go to Cleveland (flight, hotel, car) 10 times for some medical issues my youngest son has had on points. These were not foreseen before we had him, but we were able to avoid being stretched financially if we had to pay for those things. 

Now we're able to do that because we're responsible. If you miss a payment, don't pay in full, etc... you don't get those points. And it hits your credit. It's exceptionally important for us, in the buy and hold rental strategy, to have good credit, and to have those points. If you're not responsible, don't get in the credit card game. 

Also, even if you are irresponsible, don't close out all but one of your cards! Stop using them, sure, but put them in a safe place that you're not going to have access to them. Make sure that you convert to some no fee card if there is a fee. Length of the credit card being open is considered in a credit score. We have good scores because we have a number of cards that we've had forever (even though we don't use them). They're a buffer because they're "available credit" on our credit report, and they've been there for a long time. Understand how credit is calculated in the first place. Read for about 30 minutes on it and you can save a boatload of money. 

Again, DR is good for many, but not all. You can do very well with credit cards if you're responsible enough. 

I agree with Peter. It's hard to get rich paying down the debt, but there's certainly an element of comfort there. 

Imagine you have $100,000 to spend. You can buy 1 100k house, and say you rent it for $1k a month. After taxes, etc... you have $750. Not bad. But say you take that 100k and buy 5 mortgaged houses. Maybe you're only making $400 per property, but with 5 properties you're making $2,000 a month. And in 10 months you can buy another property, so you're making $2,400 a month. And in 9 more months, another property so you're making $2,800 a month, all the while you're building equity in those (now 7) properties. 

Now look back at buying outright: if you're saving up to buy another house outright, it will take 11 years to get another stream of income of $750 (or whatever it might be in 11 years). In 11 years how many properties could you have if you leveraged? 

So it's really about growing your investment and cash flow, rather than what the cash flow might be now.