EP211: Should I Pay off Debt or Invest in Real Estate?

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Should you pay off debt before you begin investing in real estate? Is being debt-free a requirement for investing? On this encore episode of Investing in Real Estate, Natali and I are answering these questions, and sharing how you can make the right decision for your particular situation.

This topic is one of our most frequently asked questions, and we’re excited to address the topic. Many people understand the value of real estate investing, but are concerned about approaching investing when weighed down by debt. Listen in to this episode of Investing in Real Estate to hear how to address your debt, assess your expenses, and how to be creative in real estate investing!

More About This Show
Deciding how to approach real estate investing when you have debt is not always simple and straightforward. There are a few factors to consider. This is a decision you’ll have to make for yourself, but we want to help you weigh your options.

The first thing you should do is write down all of your debts, so you have a clear picture of where you stand. Assess the kind of debt, as well as the interest rate for each. Then calculate how much money you have each month to allocate toward paying off debt. 

Sometimes, debt is necessary. Perhaps you had to take out a loan to buy a car, or maybe you have some student loan debt. Typically, anything under 4% interest is not a priority to pay off immediately.

For us, all of our real estate investments accrue a minimum of 10-12% return on investment. It's all about determining which rates are higher. For example, if you have a store credit card with 22% interest, you will likely want to consider paying that off as quickly as possible. 

Next, weigh what you’re paying monthly in interest against a potential investment. For example, if you have $500 each month to allocate either toward paying off debt or investing, you’ll have to assess how quickly that $500 can help you reach your goals.

You should also consider that it’s not an all-or-nothing approach! You can split the money up and approach the situation creatively. Investing is not black and white, it’s about what finding what works for you and benefits your specific situation.

To learn more about achieving financial freedom through real estate, find your Freedom Number! It’s a simple step-by-step process to help you find the exact number of properties you’ll need to obtain. This idea changed the way our family looks at finances, and helped us find financial freedom.

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you’ll learn:

  • What is the difference between good debt and bad debt?
  • What does it mean to treat your interest rates like a teeter-totter?
  • What is high interest status debt?
  • How can you stop accruing more debt?
  • And much more about real estate investing!  

Episode Resources
Health IQ
Using a Home Equity Loan to Buy Your First Rental Property
Should I Pay Off Debt or Use Those Funds to Invest? on BiggerPockets
How to Approach Your Debt with Creativity by Natali Morris
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel
Like Morris Invest on Facebook

 Should you pay off debt before you begin investing in real estate? Is being debt-free a requirement for investing? We're answering these questions, and sharing how you can make the right decision for your particular situation.

EP191: How to Leverage Debt to Build Wealth - Interview with Robert Kiyosaki

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This episode is brought to you by ZipRecruiter. With ZipRecruiter, you can post your job to 100+ job sites with just one click. Right now, Investing in Real Estate listeners can post jobs on ZipRecruiter for free by visiting ZipRecruiter.com/investing.  

In my experience speaking to successful real estate investors, I’ve noticed they all have something in common—they struck inspiration after reading Rich Dad Poor Dad by Robert Kiyosaki. If you’ve read the book, this should come as no surprise. In fact, it’s touted as the #1 personal finance book of all time.

On this episode of Investing in Real Estate, Robert Kiyosaki is here to discuss the principles of wealth building, including leveraging debt appropriately, building a strong and successful team, and the tax implications of purchasing real estate investments. Robert is reflecting on 20-year anniversary of Rich Dad Poor Dad, and sharing information from his two new books. We’ll also discuss the tax code, the future of the real estate market, and how you can get richer through gaining a financial education.

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This year marks the 20-year anniversary of Robert Kiyosaki’s book, Rich Dad Poor Dad. Widely recognized as the #1 personal finance book of all time, the book has stood the test of time. Decades later, Rich Dad Poor Dad is still changing lives and teaching individuals to grow their wealth and become empowered in their finances.

One of the main principles in the book is that the rich don’t work for money. Truly successful people understand how to make their money work for them via passive income. Robert explains that although there are many ways to become wealthy, he truly values the power of real estate investing for two main reasons: debt and taxes.

Successful investors understand how to use leverage to their advantage, and that’s exactly what Robert has done with real estate investing. He has used debt in order to increase his net worth and become wealthy.

He explains that via purchasing real estate, a business owner is able to mitigate his or her largest expense—taxes! Robert clarifies that he learned very early how to legally pay less taxes. Because of the way the tax code is written, real estate investors reap incredible benefits. There are certain behaviors that are incentivized in the tax law, and investing in real estate is one of them.

On today’s show, Robert is sharing more details from his new book about assembling the right team to support you in your business ventures. We’ll discuss what has changed since Rich Dad Poor Dad was published, and specific details about how the tax code encourages investors. If you want to learn more about building wealth, this episode is for you! 

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you’ll learn:

  • What is a financial IQ?
  • What four books does Robert Kiyosaki recommends to real estate investors?
  • What are the four asset classes outlined in Rich Dad’s Cashflow Quadrant?
  • How can you build a strong team that will support your success?
  • What is phantom income?
  • And much more!

Episode Resources
ZipRecruiter
Rich Dad Poor Dad by Robert Kiyosaki
More Important Than Money: an Entrepreneur’s Team by Robert Kiyosaki
Why the Rich Are Getting Richer by Robert Kiyosaki
Rich Dad’s Cashflow Quadrant by Robert Kiyosaki
Tax-Free Wealth by Tom Wheelwright
The ABCs of Real Estate Investing by Ken McElroy
The ABCs of Property Management by Ken McElroy
The Advanced Guide to Real Estate Investing by Ken McElroy
Loopholes of Real Estate by Garrett Sutton
Robert Kiyosaki and an All Star Panel of Experts Talk Advice for Entrepreneurs
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel
Like Morris Invest on Facebook

Contact Robert Kiyosaki
Website
Facebook
Twitter
LinkedIn

 On this episode of Investing in Real Estate, Robert Kiyosaki discusses the principles of wealth building, including leveraging debt appropriately, building a strong and successful team, and the tax implications of purchasing real estate investments. 

EP181: How to Pay Off Your Mortgage in 5 Years or Less

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What would your life be like if you had no mortgage? Would you accelerate your investing strategy, pay off debt, or take more family vacations? A few years ago, Natali and I discovered an incredible means to pay off our primary residence. Now we utilize this strategy consistently in order to meet our ultimate goal: purchasing more buy and hold real estate.

On today’s episode of Investing in Real Estate, we’re sharing the proven system you can use to pay off your mortgage in just a few short years. We’ll discuss the step-by-step system that can help you save hundreds of thousands of dollars in interest payments. We’ll share the importance of dedication, and why banks don’t want you to know about this strategy!

More About This Show
Have you ever thought about using a HELOC to pay off your primary mortgage? When I first discovered this strategy, I was fascinated, and decided to put it to the test. With enough discipline, I discovered how quickly and effectively it works.

Using a HELOC, or home equity line of credit, to pay off your mortgage is a way to create equity in your primary home. Doing so allows you to pay down your balance quickly. More importantly, it allows us to leverage our funds in order to purchase cash flowing real estate.

The reason this works is because the loan on your house is amortized, meaning the value of the home is gradually paid off. Typically on a mortgage, you’re paying off the interest for the first years of the loan. Principle is not paid off until later.

But if you’re able to put a large amount of funds from a HELOC toward your mortgage, you can designate that money to go specifically toward your principle balance. Then going forward, a larger percentage of your monthly payment can be applied toward principle, instead of primarily interest.

So instead of paying off your mortgage in 15 or 30 years, you’re able to do so in less than five! On today’s show, we’ll map our all the details of this strategy. We’ll talk about utilizing your HELOC as a checking account, and running the numbers of your amortization schedule. Please join us for episode 181 of Investing in Real Estate!

If you want to learn more about this payoff strategy, we’d love to share our new book with you! It just launched on Amazon, and you can pick up either the Kindle or paperback version. We wanted to share this to help you free yourself from the dead weight of your mortgage so that you can enjoy your monthly income however the heck you want to! 

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you'll learn:

  • How does an amortization schedule work?
  • How can you use your HELOC as a checking account?
  • Why is it important to designate your payments toward principle?
  • Typically, how much can you take out of a HELOC?
  • And much more!

Episode Resources
How to Pay Off Your Mortgage in 5 Years by Clayton and Natali Morris
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel

Like Morris Invest on Facebook 

 What would your life be like if you had no mortgage? Would you accelerate your investing strategy, pay off debt, or take more family vacations? We discovered an incredible means to pay off our primary residence. Now we utilize this strategy consistently in order to meet our ultimate goal: purchasing more buy and hold real estate.

EP178: Should You Pay Off Investment Properties Quickly?

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Many investors have asked us about the most effective way to pay off rental properties quickly. However, I think that sometimes investors get ahead of themselves. Before you determine how to accelerate your loan payoff, you should decide if it’s the right option for you to do so.

On this episode of Investing in Real Estate, Natali and I are discussing the four questions you should ask yourself in order to determine if you should quickly pay off a mortgage or note. We’ll talk about evaluating interest rates, covering your expenses, and more! Don’t miss episode 178! 

More About This Show
In order to determine if you should accelerate your payoff date, there are four key areas you should consider. There is no one-size fits-all when it comes to finances, so you’ll need to survey the options, and how they will work for your individual situation.

  1. Do you have other investment opportunities? It’s fine to pay down your mortgage if you don’t have any opportunities available to you at the time. But if a great deal comes across your desk, you may want to take the cash flow from your tenant to purchase an additional rental property. 
  2. What is your tolerance for debt? If you’re in a Dave Ramsey mindset, you’ll probably be focused on paying off your debt as quickly as possible. On the other hand, if you’re interested in using leverage to grow your portfolio, paying off the loan can wait. 
  3. What is your time horizon? Your investment strategy will likely be different when you’re 30 versus when you’re 60 years old. However, it’s not all about age, it’s more so about mindset. It all depends on how quickly you want your properties to cash flow.
  4. What is your required monthly income? If you’re at a time in your life where you’re using your rental income just to make ends meet, you should probably keep your cash flow. If your rental income is just icing on the cake, you might be more inclined to put it toward paying off debt.

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you’ll learn:

  • How can you purchase an additional property if you need your rental income for personal expenses?
  • How can you determine if it makes sense to funnel funds toward interest?
  • How can you learn about quickly paying off a mortgage?
  • What information should you put on a spreadsheet in order to determine if you should pay off your property?
  • And much more!

 Episode Resources
How to Pay Off Your Mortgage in 5 Years by Clayton and Natali Morris
Loopholes of Real Estate by Garrett Sutton
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel
Like Morris Invest on Facebook

 As a real estate investor, should you be concentrating on paying off investment properties quickly?

EP176: Get Ready, Changes Are Coming to Your Credit Report - Interview with Wayne Sanford

Book a call with our team: https://goo.gl/dezwHT

This summer, many Americans could see a boost in their credit scores as the result of a new change in credit scoring. Beginning on July 1, 2017, public records such as tax liens and judgments will be removed from the credit scoring system.

Returning to the podcast to discuss this change, and what it means for consumers is Wayne Sanford! On today’s show, Wayne is sharing why this change is happening, how to stay informed, and more! Don’t miss episode 176 of Investing in Real Estate!

More About This Show
Since the last time I spoke to Wayne Sanford, much has changed in the world of credit scoring. A new lawsuit, initiated by the New York State Attorney General, has concluded that public records should be removed from credit reports. Wayne explains that there are many arguments on both sides, but the conclusion rests on the fact that sharing a consumer's Social Security number is a privacy issue. 

According to Wayne, this is a vast change. However, just because a deficiency or judgment is gone from a consumer’s credit report, doesn’t mean it’s completely erased from history. These debts must be satisfied.

If a consumer wants to work with a bank, not much can be done if they have a deficiency or lien. A judgment supersedes the first lien position, under any circumstance.

With the new changes to the tax reports, banks will have to go directly to the companies that report these public records. And for many people, this could be an issue when applying for a big purchase, such as a mortgage.

On today’s show, Wayne is sharing more about this shift in the credit scoring system. He’ll discuss contacting credit bureaus, and how to handle deficiencies and judgments. We’ll talk about why this change is happening, what it means for consumers, and much more!

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you’ll learn:

  • What is an offering compromise?
  • How long does a consumer have to respond to a judgment?
  • Currently, how long does a judgment remain on a credit report?
  • What is an affirmation of debt?
  • What is the main question that baffles debt collectors? 
  • And much more!

Episode Resources
EP068: How to Use Your Credit Score as Leverage in Real Estate Investing – Interview with Wayne Sanford
Credit Karma
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel

Like Morris Invest on Facebook

Contact Wayne Sanford
Call at 469-424-3031
Email
Website
Facebook
Twitter
LinkedIn

 This summer, many Americans could see a boost in their credit scores as the result of a new change in credit scoring. Here's how things might impact your credit report.

EP142: Behind the Scenes of Our Next Real Estate Purchase Part 2

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Sometimes being a real estate investor can involve making serious decisions about how to most effectively run your business and manage your finances. On today’s show, Natali and I wanted to pull back the curtain once again and discuss how to best move forward in our real estate business.

On today’s show, you’ll hear Natali and I discuss the constant revision of our Freedom Number, and how we’ve leveraged our assets. We’ll also talk about how to move forward with our new business credit cards, and how to evaluate financial products. Please join our conversation on this episode 142 of Investing in Real Estate.

More About This Show
On episode 115, I interviewed Mike Banks from Fund&Grow about using business credit cards to purchase rental real estate. This is a fantastic strategy, because it’s not tied to your personal credit score. Using these credit cards allows you to purchase properties at no interest for an introductory period.

We decided to employ this strategy on a personal level. We applied jointly, and were approved for five different business credit cards. These lines of credit total $176,000, and are zero interest. We are able to request credit access checks, and treat these credit lines as cash!

Clearly, $176,000 could help us grow our portfolio rapidly, especially since the all-in cost of our properties is right around $50,000. We do have aspirations of reaching our Freedom Number, but we’ve also seen great success in making large payments toward our primary mortgage.  

In fact, earlier this year we applied a large payment to our mortgage by accessing a home equity line of credit. We were able to shave an entire year off the life of our loan, as well as $34,000 in interest. Doing this is so rewarding. It’s liberating to strive toward owning your home free and clear.

On today’s show, you’ll hear us navigate this decision making process. We’ll talk about our acquisition strategy, and how many properties we plan to purchase in 2017. We’ll discuss creating financial freedom through real estate, and how you can access your own business line of credit! Don’t miss episode 142 of Investing in Real Estate!

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

 Behind the scenes of our next real estate purchase, plus how we're using leverage to buy rental properties. | Real estate investing

EP127: Buying Rental Properties with Credit: Good or Bad?

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Deciding how to finance your rental properties can be a complex decision. Unless you have cash on hand, you’ll have to assess your credit, debt, and more.

On this episode, Natali and I are sitting down to answer listener questions about credit and financing. We’ll talk about buying real estate investments with credit, and how to evaluate financial products. Join us for episode 127 of Investing in Real Estate!

More About This Show
One mantra that has stuck with me throughout the years is the idea that “free and clear is the promised land.” Obviously, if you can purchase a property without a financial product, you forego interest rates, fees, and other expenses.

However, using cash up front for every single deal isn’t always an option. Luckily, there are many alternatives if you’re willing to be creative. And there are ways to pay with cash, even if you don’t have $50,000 sitting in a savings account.

You can take a 401k loan, take out a HELOC, partner with other investors, or structure private notes. Wholesaling is another great option. Business credit cards may be available to you. Traditional mortgages, or refinances are options as well.

It all comes down to evaluating these products. You have to assess financial products, and determine if they are worth it to help you meet your goals. On today’s show, we’re explaining how to properly assess financial products, and answering more of your questions!

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you’ll learn:

 We answer listener questions about credit and financing. We’ll talk about buying real estate investments with credit, and how to evaluate financial products.
  • How can you meet like-minded real estate investors?
  • How can you determine whether or not you should refinance?
  • Is there a difference between good debt and bad debt?
  • Should you get out of debt before investing in real estate?
  • And much more!

Episode Resources
EP070: How to Evaluate Debt Service on a Rental Property
MorrisInvest.com/funding
MorrisInvest.com/wholesaling
MeetUp.com
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel
Like Morris Invest on Facebook