It isn’t procrastination and it can be deadly unless you fix it now.

We have all had that moment in life when we get really excited about something, maybe it is dieting, getting out of debt, planning our day more effectively, redoing the kitchen, painting the bedroom, investing, etc.  You name it.  

At that moment we get excited about doing the “thing”, but we don’t take any action to get the ball rolling on actually doing it. For every second, minute, hour, day, week, month that goes by, we lose that passion and excitement about accomplishing what we were so excited about accomplishing.

This is called the “law of diminishing intent”.

I can remember learning this lesson years ago.  It was around November or so, and I was telling a friend of mine that I was planning on starting to workout after the New Year.  Sound familiar?  He replied back “Why wait, why not start now, what is the difference between now and then?”  

The only thing that could have happened over the next 45 days was I would lose interest in actually pursuing the goal and I may have never even started. Instead I started that day.

Starting is obviously very important, but more importantly by starting today you actually start the process of developing the disciplines and habits that will help you continue down the path until you accomplish the goal.

My mentor Jim Rohn says it like this:  “The pain of discipline weighs ounces and the pain of regret weighs tons.”

The key is to set up the discipline while the emotion is at its highest.  

Buy the paint, clean the refrigerator out of all of the snacks, cut up your credit cards, go outside and run a mile or walk, find a realtor to start sending you possible income producing properties.

When it comes to your health it really could be a life or death situation. Maybe you get short of breath, or you see something that looks odd on your body. The key is to call the doctor now and set up an appointment. Because as time goes by, you will start to tell yourself that it is not not that bad and justify not taking action and it could ultimately kill you.

Is there something in your life right now that you are excited about?  What are you doing to set the disciplines and activities in motion to ensure you keep the energy and actions moving forward? Please share with me, I would love to hear them.

To your success and your future.

4 Ways Income Producing Real Estate makes you money

Are you still on the fence about investing your hard earned dollars in to income producing real estate? You can keep sending your money to Wall Street and be subjected to the highs and lows of your money constantly going up and down, and in many cases invested in to something you don’t know anything about. Even worse, it could be invested in a company that goes against your values.

Or you can control your own destiny and invest your money in one of the safest and surest ways of making you more money, which is income producing real estate.

Below I explain all the ways real estate can make you money, and in many cases all at the same time. You definitely don’t get this with your money when Wall Street has it.

  1. Tax Advantages

    I am not a CPA, so I am not going to provide you tax advice. However, I will tell you that when you own income producing real estate you are now operating a business. And businesses get tax advantages that an indovusal W2 employee do not have.

    The most taxed income you make is from a W2 job. When you have income producing real estate you can use some of the following to reduce your personal taxes.

    A. Depreciation: is the incremental loss of an asset’s value, generally due to assumed wear and tear. As a real estate investor that holds income-producing rental property, you can deduct depreciation as an expense on your taxes. That means you’ll lower your taxable income and possibly reduce your tax liability.

    B. Pass through deduction: Allows you to deduct up to 20% of your qualified business income (QBI) on your personal taxes.

    C. 1031 exchange: This is when you own a income producing property and you sell it. The money you make above and beyond what you paid for it, you wont have to pay taxes on it as long as you invest that money in another similar property within a certain time period. I recently did one of these myself. Very simple process. Just make sure you let everyone know at the very beginning what you are doing and then find an attorney that can assist you with it.

    D. Write offs: This is the biggest tax benefit. You get the opportunity to deduct any of the expenses tied to owing the real estate. All of the insurance, taxes, interest on the mortgage, maintenance, etc. Additionally, you can deduct any of the expenses accrued to operate the real estate business. Thing such as advertising, office space, business equipment, etc.

    All of these deductions lessen your taxable income from your W2 job.

    As i said, I am not a tax expert so please consult your CPA before purchasing income producing real estate.
  2. Principal pay down: This is the big one. If you buy the right real estate with the right terms the tenant will pay your mortgage each month. Which means they are paying down the loan for you.
  3. Market Appreciation: This is the one that is not talked about enough. Real Estate historically doubles every 20 years, and in the case of the last three or four years, this has been exponentially increased. Now, the last few years are historical highs for real estate.

    We all know that property values have and will continue to go up. Which means your wealth is going up as well. Because as you owe less, and the property is worth more than you paid. You make money.

    Typically the fed tries to keep inflation around 2% a year. Which means your real estate even if there is no market appreciation at all, will typically go up each year by no less than 2%, just because of inflation and the cost of everything has gone up.
  4. Cash Flow: In an earlier post (see here) I talked about cash flow and cash on cash return. As you can see above with the other ways income producing real estate can help you make more money or save you money, my hope is it is providing you additional income on a monthly and yearly basis as well.

    Different people have different strategies when it comes to owning investment real estate. I call it income producing, because I want it to provide some cash flow over and above the costs of owning it, in addition to the other benefits of it. However, some people will invest in an asset and in some cases may take a loss on a monthly basis hoping that the assets value will increase significantly making the losses the incurred early on in owning the asset is wiped out.

    Again people have different strategies for their investment goals. You have to decide them for yourself.

My mentor says it like this. “Don’t wait to buy real estate, buy real estate and wait.”

As you can see from all the ways above that real estate can make you money, it is not a get rich quick scheme. When you decide to buy your first income producing property, you must think long term especially in todays market.

Real Estate has created more millionaires than any other business.

What are you waiting for?

To your success and your future.

The one calculation that changed my life that I never learned in school

Like most of you I served my twelve years in K-12. Additionally, I spent another two years earning an associate’s degree in electronics and engineering. Then I moved on an achieved a bachelor’s and master’s degree in business.

So I have spent a lot of time in the education system.

In all of those hours and years in classes, I never learned this one equation that made me a millionaire.

Cash on Cash return is the one calculation/equation that changed my life.

What is it? In any investment, but I am talking specifically about real estate here, because that is how I used it to become a successful real estate investor.

You have to put up money or some kind of other resource to be an investor in it. You have to give up something, to get something. We all know this.

Cash on Cash return is the amount of money you invest and the returns you can expect on an annual basis to receive on the investment.

Here is a simple example that doesn’t include all the specifics, but I want to give you something to consider.

If you invest $100,000 dollars and it gives me a 10% cash on cash return in a year. It would provide me $10,000 a year back on that investment. I invest $100,000 and I get $10,000 in return.

In the case of real estate you invest a percentage, usually 20-30% of the value of the property, but you now own 100% of the property.

Real Estate is one of the only investment opportunities where you can invest such a low percentage of the value of it, and own all of it. The rest of the money comes through a loan. This is also called leverage. Which we will talk about another day.

Now the simple example I provided you above didn’t include all of the other specifics that you have to consider when making this investment.

Things such as loan payment, insurance, taxes, maintenance of the property, management, etc. So you must include all of these expenses in to the equation to get a full analysis of a cash on cash return.

Lets see a full example here:

Property price: $250,000
Investment (20%): $50,000
Mortagage/Loan: 5% interest rate amortized for 30 years: $1370, $16,440 annually.
(More context here: Why 30 years not something shorter. Well this would depend on your strategy, but in the world of real estate it is all about cash flow. So by extending the payment out over 30 years you can increase your monthly cash flow, because your payment is smaller. Again, real estate is one of the rare businesses you can do this in)
Property taxes (1% of value of property): 1% of $250,000 = $2,500
Insurance (depends, but conservatively): $1,200
Maintenance (5% of revenue):
Vacancy (3% of revenue):

How much can you rent it for? This depends not he area obviously. And there are a lot of resources to help you determine market rents such as rentometer (website) or you can call around. But I am old school, and I like to use the 1% rule. It is simple, and over the last couple of years in this crazy market it has been tough to find properties that can earn 1%, but you still can.

Gross Rent (1% of the value of the property): 1% of $250,000 = $2,500
Annual rent: $2,500 X 12 = $30,000

One of the things to remember here is this. Do all of your calculations on yearly basis.

So lets put it all together here:

Property price: $250,000
Investment (20%): $50,000
Annual rent: $2,500 X 12 = $30,000

Mortagage/Loan: 5% interest rate amortized for 30 years: $1370 (monthly) $16,440 (yearly)
Property taxes (1% of value of property): 1% of $250,000 = $2,500
Insurance (depends, but conservatively): $1,200
Maintenance (5% of revenue): 5%/$30,000 = $1,500
Vacancy (3% of revenue): 3%/$30,000 = $900

$30,000 (gross rent)-(expenses) – $16,440 – $2,500 – $1,200 – $1,500 – $900 = $7,460

So the amount at the end of the year you would have left us $7,460 dollars. And how much did you invest to earn that $7,460 dollars? It was $50,000, your downpayment to get the loan.

So what is the cash on cash return? $7,460/$50,000 = 14.92% but lets round it up and say 15%.

This is only one part of the equation though. Something we will talk more about in later posts are the other benefits of owning real estate. Things such as the tax implications, especially if you have a w2 job. Your loan pay down, your equity position increasing and how inflation helps you year over year when you own real estate.

I kept the math simple here. Some critics, may say, well, what if there is an HOA fee, or you didn’t specifically lay out the costs of closing, or lawn care, or management fees.

I get that. But with a single family home, most likely your tenant will do their own lawn care. If you self manage, which you might want to do on your first few properties you wont have that added expense.

Again, you can get more granular, and you should when you are analyzing a deal and whether or not it makes sense or not. However, I have found that more often than not, people analyze too much and never buy. You can analyze yourself into oblivion and never take any action. I don’t want you to do that. If a dummy like me he sucked at math can become a millionaire by following the above advice, anybody can do it.

If you do this over and over with multiple properties, single family, small multi-unit, commercial, big apartments, etc. You can see how this can grow.

Another thing we will discuss in later posts is how long does it take for you to earn the money you put in the deal back and what that means and how to use it.

So why did I never learn the cash on cash return equation in school? Was it taught and I missed it? And everybody I know missed it? I’m not sure. However, once I learned it. And once you learn it, it can change your life forever, like it did mine.

Cash on Cash return is one way to analyze an investment. But it is one strategy of many that you may consider as you start to invest your hard earned capital into real estate.

I look forward to expanding on this topic and example in future posts.

To your success and your future.

What would an extra thousand dollar’s a month do for you?

My mentor asked me this question over a decade ago.

What would you be able to do with an extra $1000 dollars a month?

At the time, I thought, I could pay off my student loans quicker, my car note quicker, I could increase my savings rate.

The question was a powerful one, because up until that time, I am not sure I thought of earning an extra money outside my normal W2 paycheck job.

I bought my first investment property at age 26. A duplex. When I tallied everything up at the end of the year. It probably created an extra $200-$300 a month. So I had that in place. But keep in mind I owned this well before my mentor asked my this question.

Fast forward a few years and I was pondering the question:

My best friend had a connection to Worlds Finest Chocolate. Yes. The candy bar company. We all either sold these candy bars or were asked to buy one at some point in your life. Until the health nuts took over the school system, but I digress.

Your school would sell these chocolate bars for a dollar a piece to fund raise. And the buyer also got that nice little couple on the back of the wrapper. So it was a great deal.

I worked full time, so selling this fund raising opportunity posed some challenges. However, I ended up finding a lil niche within daycares. I didn’t even know daycares did fundraising. I don’t have kids, but hearing how much parents pay, I would have assumed they wouldn’t have to fund raise. I did this for a little while and made some extra money.

Then my best friend and I started a business. To make a long story short. We operated the business for over seven years. It never really took off, but it provided a few extra hundred dollars on average over those seven years.

Another thing I did was I started pursuing some certifications through a training company. I figured the certifications would allow me to train and earn extra income. It eventually did, and actually became a full-time career, but it started off very part-time with no money, and ultimately provided a full-time income.

Lastly and most importantly, I bought my first investment property at 26. I unfortunately didn’t buy another one until about six years later. And then I bought another one, then another one, and well, I think you see where this is going.

That extra $1000 dollars a month my mentor challenged me with over a decade ago, now has become 15 times that. And it is all because of real estate.

Here is the lesson. I don’t want you to miss it. Its not only about the extra $1000 a month. More importantly, it is your commitment to the extra $1000 a month. You have to be willing to make the commitment to it and do whatever it takes to earn it.

To your success and your future.

Why average sucks

When was the last time you looked up the definition of a word?
If you are like most people, probably not very often.
You either don’t read much, which means you don’t get exposed to a new words very often or you just ignore the word you don’t know.
I have made it a habit to not only look up words I don’t know the definitions of, but I also look up words I assume I know for sure.

It may sound silly to do, but I will tell you there have been many occasions where I looked up a word that I thought I knew for sure, but found that I was a little off exactly.

The word average isn’t one of those words I thought I knew and learned that I didn’t know.

Instead though, what I learned was there isn’t really anything good about being average.

Read some of the words in the definitions below.  Is that what you want?

  • having qualities that are seen as typical of a particular person or thing.
  • mediocre; not very good.
  • a typical amount, rate, degree, etc.; norm.
  • number expressing the central or typical value in a set of data, in particular the mode, median, or (most commonly) the mean, which is calculated by dividing the sum of the values in the set by their number.
  • an amount, standard, level, or rate regarded as usual or ordinary.
  • constituting the result obtained by adding together several quantities and then dividing this total by the number of quantities.
  • of the usual or ordinary standard, level, or quantity.
Three ways to stop being average:
1. To get out of the class of average you first have to stop comparing yourself to everyone else.  That’s the hard reality.  There is a lot of average out there.

2. Realize that it is going to take so much more effort and most likely time to accomplish a goal that you have. Sometimes you can increase the frequency you do things which can decrease the amount of time.  But regardless it is going to take a lot more of everything to accomplish your goals. Unless they are too easy.
3.  Nobody is going to do it for you. It’s up to you.  The calvary is not showing up.  You have to do the work.  It’s on you.Be great today!

To your success and your future.

Three things that I learned that was a total lie

As a kid growing up I am sure I was told by much smarter people, grown ups, of things that I should do or shouldn’t do.  And I didn’t listen.  Because I was young and dumb.  But the older I get the more I realize that those grown-ups knew more because of their experiences.  And nothing can replace experience to teach us lessons.

With all of those lessons that I may have missed along the way, I did pick up a few lessons that I did listen to that were completely wrong.  And these people didn’t intentionally lie to me.  It wasn’t their fault.  But I learned them, and as I have gotten older I now realize they didn’t know what the heck they were talking about.

Money isn’t as important as you think. 

If I had a dollar for every time someone said this to me, I wouldn’t have to worry about money.  I am sure it was told to me as a child at times as well.  But more importantly, and more critical, was the fact that money wasn’t discussed.  Look, I know my parents did all they can.  I didn’t go without food, water, shelter, and clothing.  And I know for a fact that my parents did whatever they could to provide us with everything they could.  I had a great childhood.

I also know that there were people around me that were better off.  Their parents had better paying jobs.  Which meant that they got the newer and nicer things. Kids are smart enough to look around and see the reality of situations, but instead of them only seeing the realities of the situation, I think parents can use that as a motivator to encourage their kids to understand the realities of the situation better by explaining to them the realities of the situation.

My parents didn’t talk about money which meant we didn’t think about money.  At an early age, I knew that money was important, because when I had it, I felt better, and I could go and buy all the damn candy I wanted.  And for me to be able to do that I had to have money.

I can remember poor person after poor person telling me that money wasn’t everything.  There are more important things in life. But just as I learned as a kid and I know it to be more true as an adult, money is necessary for everything.  I need money just to leave my house.  Gas is expensive, food is expensive, dry cleaning is expensive.  Everything requires money.  Not only do you need it to live, but if you have any desire to help other people, you will need money as well.  Never tell anybody that money isn’t that important, because it is.

Formal education is the most important education:

Do good in school, pick a great high school, and be sure to go to college.  I don’t want to discount any of these things.  We all need to understand the basics of which education teaches and provides.  I think most people get this.  Where it goes wrong though, is to only focus on this.

I never had a teacher, parent, counselor, etc. tell me that skills are more important than education.  Skills that I can use in the marketplace that can help me get what I want from the marketplace.

Here are just a few skills, that should be taught, instead of hoping students get them through the process of pursuing a formal education.

Skills such as influencing other people, selling their ideas, being a leader, communicating with tact and candor, taking initiative, problem solving, critical thinking, how to get attention for the things you want, marketing, etc.

Yes, you get some of these skills through the process of a regular classroom, but there wasn’t any course on how to get attention (marketing) in the marketplace.  And if there was, the people teaching the course, my teachers, didn’t know how to exactly do it themselves.  They were reading it to you out of a textbook, which meant their examples were weak and not very compelling.

Yes, a level of formal education is important, but skill development is what is even more important.  Children should learn how to make money, manage money, talk to people, take initiative, take risks, problem solve, etc. These are the skills that are more important.

Seek security:  

Everything I learned by watching everyone in my life was all about security. Find a good paying job with benefits. Go to college and get a good education so you can have opportunities.  Save your money. Don’t get noticed, stay under the radar. Do what you have to do.

Not once did I learn that everything in life that is worthwhile will be just out of reach of my comfort zone and my willingness to expand that zone is what will allow me to get whatever it is that I wanted.

Nobody taught me to seek discomfort.  To seek challenges.  To challenge myself to learn new skills and to be entrepreneurial.

Again, it wasn’t anybody’s fault that I learned these things.  This is what the people I was around the most were taught, and this is what was taught by everyone they knew.  We really are a product of our environment.

As the great Charlie “Tremendous” Jones says: “You will be the same person you are today, five years from now, except for the books your read and the people you meet.”

As a child growing up, I didn’t read very many books outside the ones I had to read.  And I only met people who were in my circle of friends and family.

My suggestion to parents is to look for unique ways to challenge your children and get them experiences with what they will eventually be exposed to in the marketplace.  Teach them the skills that will help them get ahead and stay ahead.

To your success and your future.

The first law of motion

If you watch TV at all you have inevitably watched the commercial for Celebrex which is an arthritis drug. The commercial states that “a body in motion stays in motion and a body at rest stays at rest”.

This commercial is based on the first law of motion that Issac Newton published in 1687.  Which states that an object either remains at rest or continues to move at a constant velocity, unless it is acted upon by an external force.

This week I was having a conversation with a good friend of mine about this very concept. Not Issac Newton, we aren’t that smart.

We were talking about running. I was explaining to him that as a runner, it is very easy for me to go out and fall into a pace that my body is very comfortable with.  It could be an eight minute mile or a seven minute mile.  It just depends on your conditioning.  Whatever that pace is, it is easy to stay at it because your body can do it without efforting.

I am sure there are more scientific ways to explain it, but I am not scientific.

To increase your speed and accomplish running goals you have set for yourself, you must break the inertia, the temptation to stay at the comfortable pace.

It is hard to do, that inertia is so cozy, easy, and feels great that your mind wants to stay right there.  You may call it your comfort zone. But as long as you do this you will never increase your speed or times towards any distance goals you might want to accomplish.

I was a runner for close to six years before I learned how to really train.  For those first six years I definitely became a better runner, with better speeds and times, but it wasn’t until I started training my body to become very uncomfortable that I made significant gains.  By gains, I mean faster miles, longer distances, and winning races I competed in.

In running that training starts with forcing yourself out of that comfort zone for small periods of time over and over and over, until it stops being that uncomfortable to you. As you continue to do this repeatedly you eventually become better conditioned and you start moving the needle towards whatever goals you might have.

At almost 42 years of age, I am probably twice as fast I was when I was 32.  Its isn’t that that I am getting better with age.  That theory doesn’t hold up in athletics and age. Instead it is I am a more educated and I am better at training.

If I would have known how to train at age 32, who knows what I could have accomplished as a runner.

Whether it is running, biking, writing, speaking, investing, you name it.  For you to break any slump or cycle, you must break the inertia.  You must apply force someway and somehow to move yourself out of the comfort zone.

I am a real estate investor. I have purchased many single family homes. When I first started doing it, I was always a little scared.  I would just think things like this.  “Is this a really good deal”, “Will I be able to fund a tenant”, “What if something goes wrong”, “What if someone destroys my property”.  All of these question ran through my head.

Many years later, I never even think about those things. Purchasing single family homes is easy for me.  I never over think it.  However, it is too easy and too comfortable for me, that I can easily fall into the trap of continuing to only purchase single family homes.

For me to scale my real estate portfolio the way I want to, it is going to require me to buy bigger deals.  Multi-Unit/apartment buildings is now the direction I want to go and I must go.

Many of the same concerns and questions I had early in my investing career are popping up in my head. “Will I be able to find tenants for all of the units”, “What if all of my tenants move out at the same time”, “What if all of my hvac systems go out”.

As these questions pop up in my head it is easy for me to want to stick with the single family homes that I am comfortable with. But I am pushing through because I know I must get to the next level and the only way to do this is to go in the new direction.

I share these stories with the intent to inspire you to force yourself out of the comfort zone you find yourself in. Inertia is a bitch.  Without additional force and pressure from yourself or others you will never get out of the rut or zone you are in.

To your success and your future.

Grow your problems grow your life

This week I was reminded of a simple rule, law, idea? I am not sure exactly what to call it.

For the sake of this writing we will call it a rule, because rules should be followed.

“If your problems aren’t growing it means you aren’t growing.”

Pretty simple rule. Keep in mind problems are not a negative thing. Problems are good. They help us grow and develop and they illustrate progress.

One of the best examples of this rule in action.

I can remember in my twenties having a car payment. I made good money and thought I had my ducks in a row. But it seemed like no matter what I would do, I always struggled to make my car payment. By struggle I mean, I would have to adjust different bills each month to make sure I had the money to make my car payment.

It is okay to be in this situation for a little while. But if this problems persists year after year, it means you aren’t growing. You are not progressing forward. You are not solving this problem. 

Eventually I figured that piece of my life out and now I had a bigger bill and a bigger problem. I bought a house. Which means it was more money. And just like the car payment, the house payment became a similar situation.

Each month I would have to move around certain bills to make sure I had enough money to pay my house payment. After a few years of this I was able to get some money saved and create some slack for myself.  In both situtations I solved my problems.  I figured it out. That should be the goal.  As you start to solve your problems you create even bigger and better probelms you will have to learn to solve. 

I am not here to give financial advice, but if you continue to struggle with the same things year after year after year it means you are not changing and you are not growing.

Another good example is in business.

If you are running a business and you are the only employee, you obviously have a lot on your plate and a lot of problems that you are managing all by yourself.  As your solve those problems and your business grows, it only makes sense to hire an employee to help you. 

With the addition of that one employee, you may have eliminated some of the problems you were having as a solo band, but with that new employee you will start to get new problems. For each employee you add new problems will arise, but the old problems will go away.  

Many people who decide to have children do so because they want a family and that family will bring them happiness.  But ask any parent how many more problems they had when they had their first child, then their second, third, and you get the point. These are welcomed problems though, because the happiness and joy outweighs the problems and challenges children bring.  

A final example I have from my own life is this. Every since I was a little kid I have always wanted to own rental real estate.

When I bought my first piece of rental real estate it was a duplex. A very expensive one, which is another story for another day.

I didn’t realize how much money it was going to cost me for a down payment to purchase the place. And at the time, I had some money saved but not enough.

For me to purchase the duplex I ended up selling a gun that I owned to someone for like four-hundred dollars. Yes. Four-hundred dollars. At that time in my life four-hundred dollars was like four-thousand dollars.

I bought the duplex. A few years later I bought four more rental properties and I was able to pay cash for two of them and the other ones I easily had the down payments.

As I am typing this today, I am about to make the largest real estate purchase I have ever made.

There is a quote I like to use and have used many times in my life.

“There is no neutral in life, you are either going forward or going backwards.”

This week we elected a new president into office. Many people unfortunately think that what happens in Washington DC, no matter who is in charge, has a great impact on their life. This is without a shadow of a doubt, untrue.

The only person that can impact your life is you. You have to do the work. You have to make the sacrifices.

To your success and your future.

Three things I did to pay off my third rental property

As of this writing I have written well over a thousand articles on a wide range of topics.  A topic that I haven’t written about is real estate.  And it is probably one of my favorite topics on the planet.

I bought my first rental property in 2006 at the age of 26.  It was a duplex that I owned up until I moved to Florida in 2015.

My attraction to real estate started when I was young and it is something I have loved ever since.

As of this writing I own five single family residences.  Four of the five are paid off. Two of the five are condos that I paid cash for when I bought them, so I never had mortgages on them.

Over the years I have listened to many so called experts.  I say so called experts, because I am sure they are all successful in whatever they have done and accumulated.  However, they all had different processes they used to get there.

Some of them used a lot of debt to have success, some used minimal debt, and some used no debt to accumulate the wealth and experiences they have in the area of real estate.

I have always been a fence rider on the topic of debt when it comes to real estate.  I innately hate debt. When I became debt free other than the mortgages I had on rental properties and the house I lived in.  I said I would never have debt again.  And I haven’t.

The topic of debt in real estate is something I go back and forth on though.  I am not sure I have a clear opinion one way or the other on it as of today. However, I did make a commitment to myself that I would pay off the other three houses that I did have mortgages on though.

This morning I looked in my journal to see when I made the goal to get the third rental property paid off. The first date I wrote in this journal is 10/19/2018.  Today is 7/1/20.  I assume it may have been in there before.  However, lets just assume that was the first date I wrote that goal down.

On 1/31/2020 we paid off the third mortgage. Since then we have paid off a fourth and could pay off the fifth, but I am having that whole internal discussion on whether to pay it off or use the money we have saved to buy more.  This is another topic for another day.

How did we pay off that third mortgage?  What did we do?

  1. I wrote the goal down everyday:  As I mentioned, I can look in my journal and tell you when I started writing that goal down.  I wrote it down for close to two years almost everyday, until I accomplished the goal. This one thing is first for a reason.  To achieve what it is you want to achieve you have to remind yourself daily that this is what you want to achieve.
  2. Everything extra went towards it. As I mentioned I struggle in the area of whether to have debt or leverage debt when it comes to real estate.  There is one person who is clear on this topic though.  That is Dave Ramsey.    He is a firm believer in no debt on anything.  He has a proven method for people to get out of debt and has helped millions of people do it. One of the things he talks about is the snowball effect.

    The snowball effect is if you take a ball of snow and you roll it down ahill.  As it makes it way down the hill it gets bigger and bigger as it accumulates more snow around it.

    Also, the momentum of the snowball picks up as it makes it way down the hill.  He uses this method when it comes to paying off debt.  Which is to take all extra money and apply it to your smallest debt and pay it off first. He believes, and he is right, that the momentum that a person creates when they are able to pay off something quickly provides them the momentum they need to keep them going to pay off other debts.

    I used this method for paying off this mortgage.  I took all extra money we made and applied it to this mortgage.  It allowed us to pay it off in seven years from the time we took the loan out.

  3. Stay committed no matter what: From the time I made this commitment until we accomplished it, a lot had changed.  I started two different companies, we moved twice, and my income was wildly unpredictable.  During these kind of times most people throw their goals out the door and say they will come back to them when things are more secure. I did not.  I stayed committed.  I kept committing to that goal everyday.

I am a novice when it comes to real estate investing  However, it is something I am committed to and will continue to get better at.  My hope is you find this information to be helpful in your journey.

To your success and your future.