We passed the first inspection! The passing of the first inspection is huge for me. It has been a long time in the making to get a shovel in the dirt. Underground plumbing in the garage conversion was the subject of this inspection and what my Dad and I were working on last weekend. He returned on Tuesday this week and finished plumbing all the fixtures. Of course, it passed inspection. Now, the remaining sections of cast iron that will soon be covered by concrete will be replaced with ABS. I love seeing the progress. I will stop by tomorrow and check it out. It’s been a week since I’ve seen it. I believe the footings on the detached ADU have been poured!

I think that our strategy for financial independence is now a little more in focus. I have been reading “Start With Strategy” by Dave Meyer of Biggerpockets.com and On The Market podcasts, among others. He does a great job of explaining equity and appreciation versus cashflow. When I started this journey, it was all about how do I get properties that cashflow. The first one I bought didn’t cashflow but it’s now worth over three times what I bought it for. I now understand that properties that cashflow without having massive down payments, tend to appreciate much more slowly or not at all compared to properties acquired for appreciation purposes. Compared to stocks, properties that cashflow are like dividend stocks that are out of the growth phase. Appreciation and equity afford more investment opportunities that can be compounded to increase wealth at a steady pace. Cashflow can’t do that unless it is being reinvested. I think that adding units to our current properties is the easiest way to increase our wealth. We can then roll the equity gain into a house-hack using a cash-out refinance. We like the neighborhood where we live. The house-hack would involve finding a property that can be updated so we can realize a forced increase in value. Then do it again.

Thank you Dave Meyer. I am in the middle of filling out my PREP form.