Should I Buy More Rentals or Pay Off Debt? Here’s What I’m Doing!

If you already own rental properties and dream of living off the cash flow they generate, you’ve probably faced a pivotal question: should you continue buying more rental properties to grow your portfolio, or should you start paying off the debt on your existing properties and snowball your investments? This is a common dilemma in the journey of every real estate investor, and the answer depends on your unique circumstances and goals.

Drawing from my personal experience as a real estate investor, I want to share the strategies, mistakes, and lessons I’ve learned to help you understand when and how to transition from aggressive portfolio growth to focusing on snowballing your investments for financial freedom.

The Three Phases of Rental Property Investing

Understanding where you are in your investing journey is key to making the right decision about growth versus debt payoff. I often talk about three distinct phases that every rental investor goes through:

1. The Beginner Phase:

   This is the starting point where you’re just getting your feet wet. You’re learning the ropes, hustling to secure your first one or two deals, and trying to figure out how everything works. It’s a chaotic time, and you’re probably running around like a chicken with your head cut off.

2. The Accumulation Phase:

   This is the long grind of acquiring and scaling your portfolio. You reinvest your earnings, take calculated risks, and add more doors. This phase is crucial for growing your net worth and rental income, but it’s also where many investors experience burnout because the focus is heavily on growth.

3. The Snowball Phase:

   This is the “goal area” — the phase where you have enough properties or net worth to shift your focus. Instead of chasing aggressive growth, you prioritize paying down debt, increasing cash flow, freeing up your time, and ultimately enjoying the rewards of your investment journey.

Bill Bernstein put it well when he said, “If you want to win the game, stop playing.” Think about it like football: if your team is comfortably ahead near the end of the game, you don’t throw risky passes; you take a knee and secure the win. That metaphor applies perfectly to real estate investing. Sometimes, slowing down and protecting what you’ve built is the smartest move.

What You Need in Each Phase

Beginner Phase: Knowledge, Capital, and Courage

Starting out, there are three essentials you need to succeed:

• Knowledge:

  You must understand how real estate investing works. For example, I initially thought flipping houses was the only way to make money. But after my first flip, I quickly realized that building a rental portfolio was a better path for long-term passive income. This shift in mindset is crucial.

• Capital:

  Learning to live below your means and save money to invest is a must. Without capital, you can’t acquire properties or grow your portfolio.

• Courage:

  The “balls” to take risks and push through fear every day. Having a mentor or a community to support you can make this much easier.

Accumulation Phase: Calculated Risks and Scaling

During accumulation, you’re not just buying properties; you’re scaling your business. This often involves leveraging more capital, diversifying into multifamily units, or using strategies like a 1031 exchange to defer taxes and accelerate growth.

This phase requires a balance of caution and boldness. You need to be conservative enough to avoid catastrophic mistakes but bold enough to seize opportunities. It can become addicting to chase growth, so it’s important to keep your goals in focus.

For example, I made mistakes early on when I acquired 21 doors too quickly without enough systems in place. That experience taught me the importance of pacing and planning.

Snowball Phase: Prioritizing Cash Flow and Paying Down Debt

Once you’ve hit your financial milestones—whether that’s $50,000 or $500,000 in annual rental income or a multi-million dollar portfolio—it’s time to consider shifting gears. This is when you stop aggressively buying and start focusing on paying down debt, increasing cash flow, and freeing up your time.

Mathematically, the snowball phase is straightforward. For example, if your goal is $100,000 in annual income and your portfolio yields 5%, you’d need about $2 million in assets. If your expenses or “burn rate” are higher, you’ll need more assets or more doors to cover your needs.

But life doesn’t always follow a neat formula. Burnout, health, family, or shifting goals can all affect when and how you transition to snowballing.

My Real Estate Journey: Growth, Burnout, and Recalibration

I started investing in 2019 while still serving in the military. Initially, I was flipping houses to make a living, but soon my business partner and I began building a rental portfolio. By the time we hit about 57 doors, we were overwhelmed. We trusted the wrong property managers, and tenant turnover became a revolving door, forcing us to pause and reassess.

This “mini beginner phase” meant selling some properties—sometimes at a loss—and using creative strategies like owner financing to turn tenants into homeowners and create long-term passive cash flow. We streamlined our operations, built systems, and freed up our time.

Inspired by The 4-Hour Workweek, we took a break from buying to focus on “mini-retirement.” After the break, we shifted back into acquisition mode, targeting markets like Cleveland, Ohio, and began growing again.

This cycle of building, pausing, and snowballing is very real and effective. It’s a rhythm every investor should expect and embrace.

Tools That Help: Using FlipperForce to Avoid Mistakes

To avoid repeating early mistakes, I use FlipperForce for every rehab project and deal analysis. FlipperForce is an all-in-one platform built by real estate investors for investors. It helps you:

• Analyze deals like a pro—whether flipping, buy-and-hold, or BRRRR (Buy, Rehab, Rent, Refinance, Repeat)

• Estimate rehab costs accurately to keep your budget intact

• Plan project schedules from start to finish and stay on track

• Track expenses in real time to avoid financial surprises

Using tools like this can save you time, money, and stress, making your investment journey smoother and more predictable.

Life Happens: The Need for Flexibility

One thing my business partner Matt Z and I agree on is the need for flexibility. You can’t follow a rigid blueprint because life throws curveballs. For example:

• Kids, health issues, or family matters may shift your priorities

• Opportunities like refinancing at historically low interest rates can change your strategy

• Burnout might force you to slow down or pivot

I refinanced most of my portfolio in 2021 at 3-4% rates, which made paying down debt less urgent. If rates were higher, I’d have a different approach entirely.

Instead of rigid goals, create income floors that cover your essentials first, then reassess regularly. This approach balances safety with growth.

Common Pitfalls: Never Move the Goalpost

One trap I see many investors fall into is constantly moving the goalpost. You hit $1 million in portfolio value, then want $1.5 million, then $2 million—and never feel done.

Set your goals clearly and commit to them. For example, decide you’ll reach $2 million in assets, then pause and reassess. This discipline helps you avoid endless chasing and burnout.

Remember, financial freedom isn’t just about net worth. You can’t write a check from a building. It’s about freedom of time, peace of mind, and being present for the things that truly matter.

Blueprint for Financial Freedom Through Real Estate

Here’s the framework I use to guide my investing and financial freedom goals:

1. Define Your Financial Freedom Number:

   This is the annual income you need to cover your lifestyle.

2. Set Milestones:

   For example, aim to cover 50% of your expenses, then 75%, then 100% with rental income.

3. Track Everything:

   Monitor your net worth, cash flow, expenses, and debt levels regularly.

4. Be Flexible:

   Life will demand pivots; be ready to adjust your plan accordingly.

5. Build Systems:

   Automate and delegate to ensure your portfolio serves you, not the other way around.

One strategy I’m exploring is assigning each property a “position” in your budget. For example, one property covers healthcare, another covers food, another travel, and so on. This way, some properties are paid off to provide stability, while others remain leveraged for growth. This hybrid approach balances security and expansion.

When Should You Pay Off Debt?

The answer depends on your situation:

• If you’re feeling stressed or burned out, paying down debt can provide peace of mind.

• If interest rates are low, holding debt and investing elsewhere might make more sense.

• If stability and cash flow matter more to you, paying off mortgages on essential properties can build your income floor.

• You don’t need to pay off everything at once—start with what’s most important.

Track your progress with a personal financial statement. Update your net worth annually, track actual cash flow (not just rent rolls), and watch your loan-to-value ratio over time. This will show how mature and resilient your portfolio is.

Final Thoughts: Know What You Want and Pursue Peace, Not Just Profit

My journey started in 2019 during a crazy growth period fueled by the pandemic. I learned that real estate investing is a series of phases—building, pausing, snowballing—and that this rhythm is normal.

Forget social media hype and guru advice. Focus on what you want. Whether that’s starting a nonprofit, launching a new business, or spending more time with family, create a plan that supports your vision.

Have a clear income floor—whether $5,000 or $10,000 a month—and keep your options open. Financial freedom is about peace of mind and time, not just numbers on paper.

Ask yourself:

• Are you covering your expenses with your rental income?

• Are you at peace with your progress, or constantly chasing more?

• Are you ready to slow down if needed?

• Are your team and systems supporting your goals?

When your income covers your needs and you feel peace, that’s when you know you’ve had enough.

Investing isn’t a race; it’s a marathon with phases, pivots, and rhythms. Embrace your journey, plan wisely, and aim high.

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