A real estate investor who owns over 1,000 units and retired at age 36 explains how leveraging his equity and harnessing the 'velocity of money' helped him make 'millions and millions and millions of dollars of extra net worth'
Today Allred, now 42 years old, has ownership in over 1,250 units across 30 different properties from 15 states, including the real estate syndications for which he is a general partner, according to official documents verified by Insider. Altogether, he estimated that his portfolio equity has currently reached over $30 million in total value.
But over time, the cash-on-cash ratio begins to look better and better."It gets more and more sexy because your market rates are going up with inflation, and so every year it looks like you're making a little more money on your cash flow, which is true — and a lot of people are okay with just that. If you're older in life and you're in a retirement phase, maybe that's fine," Allred said.
, a process where an investor swaps their proceeds after selling a property entirely into buying a new one, requiring no additional cash out of pocket for the new deal. Using this strategy, Allred was able to rapidly scale his portfolio by purchasing bigger and bigger properties using the same amount of equity he had put down in the beginning.
As for deciding between a cash-out refinance or a 1031 exchange into a different property when the cash-on-equity falls below 5%, Allred says the answer is simple: an investor should ask herself if she would purchase the property today. If the answer is yes, then he recommends a cash-out refinance so she can pull out her equity while still owning the asset.
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