Memphis Real Estate Investors are retiring early!

Posted by Chris Clothier on Tue, Aug 31, 2010

Recently, a hot topic for a lot of our clients has been how to not only plan for retirement, but how to really develop and implement a powerful strategy for retiring early.  We have presented case studies o investors working with MemphisInvest.com to place a premium on develoing and following a plan to retire with a secure income from passive real estate investments.  I am including a link to a recent Webinar with one such case study involving an airline pilot worried that his own savings and airline pension would not be enough to fund his retirment:

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A big piece of his plan was to only use 15-year mortgages on his leveredged properties and then to take any additional monthly positive cash flow and apply it towards principal.  His plan was to attack debt against his assets and pay off the mortgage as soon as possible.  With a plan to purchase a set number of properties each year for a set period of time, he would methodically build a portfolio of properties and could calculate his monthly income when each of those properties were paid off.  An example would be purchasing 3 properties a year for 5 years and placing each of them on a 15 year pay off.  If each property had an average rent of $800 after property management, the income on those properties would be $12,000 per month or $144,000 a year!  Starting at the age of 40, the properties would be completely paid for at the age of 60 and as an owner, you would be reaping the benefits of setting up a detailed and specific plan for retirement!

I am reminded of this strategy when I read articles like this on on Yahoo finance this AM touting the benfeits of using a 15 year mortgage. 

Yahoo Story

The great thing about this plan, if the properties are purchased properly (at a discount and in an area that will cash flow), then a renter is actually reducing your mortgage for you and it returns become nearly infinite when the properties are owned free and clear by the investor.

MemphisInvest has more and more clients using not only this srategy, but they are really thinking about how their investing decisions are going to effect their long term goals of retiring and the standard of living they hope to continue. 

Best of luck on your investing!

Chris