cool design. i like it!
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I’ve just come across your blogs and found them very interesting. I am no where in the league of investment that you are. I’m a simple woman in early 40’s with my primary investment (besides 401K and some stocks) being my home.

Originally when I bought my home in 1995 I had a 30 year. In 2003 I refinanced for 5% for 20 years. I’ve been paying down principle for the last year every quarter (not much but adding an extra payment when I can).

The goal for me was to pay off early so that I could invest in a second vacation home along a golf course some where. I couldn’t afford to have two mortgage payments. Having read your two articles (why good and why bad) I’m thinking its still the right choice for me but thought I’d just ask for your input anyway.

So…if my goal is continue working until retirement but enjoy it a little more by having a place by the lake/golf a few hours away - is my thinking sound?

I look forward to you sharing the wisdom you’ve inherited, though I think you’ll lose most of your readership if chapter one is “be the offspring of a real estate mogul”…

That makes me wonder why your dad isn’t the one writing a book?

Oh, and I’m 24.

Didn’t I read somewhere on this site that you were in high school during the tech boom? That’d put you in your early thirties, yes? How does a young pup like you convince someone to hand over that much money?

Doubtless the answer is because you’ve got some experience to back it up. The thing that interests me is how people get started. The people I know who can make a living out of RE investing started out with parents with deep pockets, who bankrolled them (or at least provided a secure safety net) when they got started. Nice work if you can get it!

Glad to see you back again! Yes, the interest charges and other expenses of a home are amazingly expensive, and you can save a lot of money by paying them down in advance. I don’t think you’re wrong about your strategy, either. It’s just not the direction I’m going, so it’s hard for me to imagine.

It’s just not the direction I’m going. For example, I’m preparing the paperwork right now to borrow $60 million over the next year. So, it’s hard to imagine paying down my mortgage

When I came here from GRS the other day, I didn’t realize that this blog really is aimed at aggressing RE investing. Understandably that requires a different mindset than the average Joe and Jane, whose home will probably be the biggest asset they ever own.

I’d say for people in that situation–most of us–paying ahead on a mortgage, ESPECIALLY in the early years when most of the scheduled payment goes to interest, the biggest advantage is that it’ll shave years off the mortgage on the other end. I ran some numbers on the example “Common Sense” put forward in the comments for that last article; putting $100K toward paying off a $500K mortgage would shave a whole 9.5 years off the debt (assume $500K still owed on $525K total mortgage at 6%) and save the borrower $262K in interest. That could mean the difference between being able to retire at 65 or at 56…nothing to sneeze at!

I’m a RE investor, too, but definitely have more modest ambitions than you do–and different motivations, to be sure. I think you’re quite sensible to aim so high, and wish you luck in reaching all your goals!

To give you an idea of my local residential market, this recent newspaper article describes an extreme fixer not 4 blocks from my home that recently sold. Note that the it sold for over $300K–that was at least $35K over the list price. And this is certainly NOT the most desirable neighborhood in town.

We’ve got one rental house, with a bunch of equity and 10 years left on a 15 year mortgage at 5.75%. You bet we’re keeping it as is. The loan will expire the year before my first kid is slated to go college, and her little sis is 4 years behind her. We’re foregoing cash flow now for cash flow then, when we’ll need it more…and retirement, when we’ll need it most of all.

I can guess that you’ll argue pulling out the equity would let us buy more propeties, grow a business, etc. and I can see that point. It’s a possibility to ponder for the future, but in our superheated market it’s not clear how well it would all pencil out. I’ll keep reading to see how you high-rollers do it, and maybe one of these days we’ll try to join your ranks!