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.

 

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