A few days ago, I was invited to a party by one of my past clients. It was his birthday and if you know me, you know that I never say no to a good party.
The party was great; lots of good music, food, and drinks. In between dancing breaks, I naturally began talking with my client’s cousin about real estate over mojitos. As it usually happens whenever someone finds out that I’m a real estate agent, we talked about investments. Paul told me how excited he was about the possibility of buying a home in Florida. He was finally mortgage-free and was looking for a place to escape the Canadian winters for part of the year.
I was very intrigued about how Paul, a 50-year-old immigrant who had been in Canada for less than 20 years, had no mortgage on his home. I asked him if he had won the lottery, at which he laughed and then told me his secret.
After a few years of living in Canada and saving his money, Paul bought his first house. Five years later, he refinanced his house to buy an investment property. Then ten years later, he sold his investment home and used the proceeds of the sale to pay off his mortgage in full. Now, less than twenty years later, he was mortgage-free!
Paul knew that this was the best way to pay his mortgage sooner. Instead of using accelerated mortgage payments or products offered by the bank, he solely relied on his home equity to refinance his mortgage and buy an investment property. In ten years, the property that he bought for less than $300,000 was more than $800,000! Moreover, his tenants paid his mortgage for ten years straight, so he only owed the bank about $150,000.
You can do your numbers, but once he sold his investment property, he had over $600,000 to pay off his mortgage. I now understood why he was so excited.
Real estate investments are definitely an amazing way to secure a better retirement, university tuition for your children, or even pay off your mortgage sooner like my friend Paul.
If you want to achieve financial freedom like Paul did, let me help you find your first real estate investment.