Paying EXTRA money towards a mortgage

Tammy, you always have such informative posts, & are a wealth of knowledge
on many topics because of your experience, but why were you paying down a mortgage in the first place ... I thought one of the greatest benefits of real estate was the fact that you can leverage so much of an investment with little to no money into it. Where as other types of investments, such as stocks, bonds, CDs, antiques, etc. require you to buy & pay for the the instrument in full before you can earn any return. Thanks, Gary.

my 2nd on my primary residence because I could not get the 'traditional' bank financing anymore. I have 5 mortgages, and the mortgage company only takes 75% of my rents as income despite vacancies for about a week once every 3 years, which kills my income to debt ratio. In January when we bought our second home, we couldn't even qualify for a loan because according to the banks we are too high of a risk.

Now, this was before I learned about private money, hard money loans, business credit, trusts, and the VAST amount of knowledge I've gained since I started my journey. Just because someone has done things for a very long time doesn't mean there isn't anything to learn. There's always room to learn!

So, I put this out there so other people can learn from my mistakes.

This second is a HUGE burden. I got the 2nd to fund other properties and do some work on my primary residence, but the monthly payment cuts into my monthly cash flow like you wouldn't believe, so I need to get rid of it. Hence, my very first goal I want to attain is to pay it off. It started at 350K. I still owe 300K. And I want to pay it off so I can use that $2350 per month for REI instead of paying interest to the bank. REmember, I was doing things the old fashioned way, pulling money out of my homes to buy more homes and only focusing on one strategy. When the market tanked, my net worth went down by over 50%.

So, my whole journey here is to turn around that mistake and start making money again because I refused to accept that I could not invest in any more homes and that my business was basically over. AND, 2 of my homes and my primary residence were bought as houses were starting to rise dramatically (Luckily not near the top of it though!) in the artificial appreciation period, so I am flip flopped on two of my loans (not my primary residence thank God), but that 2nd has the highest interest rate, thus the reason for paying it down first. The combination of pulling money out of the equity in my homes PLUS the market coming down so drastically in SoCal affected me a lot with my strategy! (I don't regret any of the homes I have though as I haven't paid anything to the tax man in years).

Also, sometimes you want to owe less on something and have a lower payment for the purpose of having a higher cash flow. My buy and holds right now break about even; which is good for tax leveraging but not good in an economy where my husband doesn't get any raises in his income. My journey here is a little different than many of you.

But, as I learn things, I like to pass it on for the benefit of the DG family here, because I WISH I had known many of the things I've learned MUCH earlier!

Oh, and also, 2 of my loans are interest only, and I need to prepare for when they readjust in 5 more years. I'm thinking ahead.

Thank you for sharing this information. We enjoy reading your post.