Paul Shively and Fortune Builders have taught thousands of investors how to use financial engineering to maximize their wealth through real estate loans and paying them off quickly. He’s back on the show to teach YOU about an advanced pay down technique they have coined, “C3X.”
Paul will join us to help you decide:
- Which real estate loans should you pay off first?
- How can you dramatically increase your positive cash flow by following a simple financial engineering strategy?
- Review real-life examples live on the show to see how clients can shave 3-5 years off their timeline to reach financial freedom.
What Is Financial Engineering?
Paul Shively of Fortune Builders is our return guest, and he has taught thousands of investors to maximize their investments through financial engineering. One aspect of financial engineering is risk management and paying down your existing real estate loans.
In today’s episode, he shares the C3X pay-down strategy, along with a spreadsheet he created that will help you find out the best ways to pay down your real estate loans.
Paul shares excellent ideas to help investors grow their wealth while shaving time off of mortgage debts and increasing Return On Investment. Fortunately, the JWB team has the spreadsheet Paul is talking about in today’s Not Your Average Investor Show episode. We are happy to walk through this tool with our investor clients to see how the C3X strategy will benefit them and their long-term financial goals.
When Paul First Invested In Properties, How Long Before He Got Into This Advanced Investor’s Mindset?
Paul began to invest when he was 21 years old, and it took him four or five years to start seeing the rules of the money game and how to play them. Today, he takes advantage of the system and the rules to get the results you want.
You can do financial engineering in real estate investments, rehabilitating properties, renting out properties, refinancing, etc. Financial engineering impacts all areas, and it’s an advantage for investors.
Fortune Builders loves financial engineering and crunching numbers. Some investors are naturally gifted with numbers, but others are not. Those number crunchers are who you want on your team for those who want to engineer your real estate assets financially. JWB does this, and so do Fortune Builders.
Take your original pile of money and maximize it so it can grow. It’s a beautiful thing that will help you reach your financial goals more quickly. Maximizing the power of your money is a considerable value proposition!
What is the C3X Compounding Cash Flow Calculator?
Noah Cosby is one of the originators of this concept of financial engineering, so this calculator, called C3X, is named after him: Cosby Compounding Cashflow = C3X
Noah came up with an idea of what to do with the cash flow he didn’t need every month. With his father, the Cosby family came up with the idea of taking that cash flow and paying down the mortgages he has faster. That means it would shave off some years of being in debt.
Instead of having the mortgage for 30 years, Noah shaved it down to 15 years. The cash flow increased too, and it was a win-win formula.
Noah Cosby and Paul Shively built the spreadsheet tool with programmers who created a widget for them. They asked the question: What happens if we focus on paying down just one mortgage and get it paid off as quickly as we can? What will happen?

A look at the C3X spreadsheet tool that is used for the financial engineering of real estate loan pay-downs.
If we take our cash flow and attack the debt on one mortgage, the results are fascinating. It becomes a debt snowball! The results are insane in a good way! It will shave off many years of debt if you take this approach.
When Should An Investor Start Doing This Pay-down Strategy?
Paul emphasized that planning is essential when he said, “Two parts prep, one part execution.” You can never have too much planning and education. Where you get in trouble could be analysis paralysis and not take any action to pay down debt.
Here is Paul’s advice: Start doing this concept right away, regardless if you own one property or five properties.
There are three stages of rental property investing. The three stages of rental property investing include the Acquisition phase, Debt Paydown phase, and Distribution phase. The value of financial engineering will help you with all three steps.
When you use this tool to help you knock down your debt, you can shave off years of paying your mortgage. But every investor is different. Everyone has unique investment objectives and goals and different time horizons.
What are YOUR investment objectives? When you talk with the JWB team, you can work on this C3X spreadsheet tool and uncover what you need to do to shave off YOUR debt.
Here is a video excerpt of Paul Shively breaking down how the C3X spreadsheet tool works and how you can reduce your debt by paying the lowest balance off first.
This spreadsheet is designed to where you put in property one and list all of the info around your real estate loan. What is your cash flow, and how do you use financial engineering to enhance it?
You continue to fill out the spreadsheet with your additional rental properties to compare the balances within your portfolio. This spreadsheet shows your current cash flow and your portfolio’s ROI. When you pay off your loan, you knock off the time to full ownership and financial freedom.
How Do You Make Your Dollars Work Using The Cosby Compounding Cash Flow Strategy?
You’re taking our cash flow and compounding the effect of paying off your loans with that cash flow. Go with the lowest loan balance and pay that off first. You will find that by following Paul’s advice, you will not have to worry as much as other investors do about a financial crisis.
Using some numbers, Paul demonstrated that if you use the C3X method of shaving off mortgage time, you can go from 360 months of payment to 60 months of payments. If you don’t need the cash flow and use it to pay off one mortgage first, Paul showed you can knock off 300 months of payment!
Once the first house is paid off, you have extra cash flow, and you can apply that to the next mortgage to pay that off faster. It starts to accelerate, and you continue paying properties off with the extra cash flow. Sooner than you might expect, you’re paying properties off within ten months!
First, you attack the smallest balance to knock off that debt. Then, you go to the next pricey balance to pay that off. It snowballs in an excellent way to pay off all of your properties.
Is There A Downside To Paying Off Real Estate Loans?
No. But Paul cautioned, “Don’t get hung up in the numbers. Fall in love with the concept.” The idea of financial engineering and using this tool to see the compounding effects of using your cash flow to funnel your payments strategically will help to reach your financial goals several years earlier.
In this instance, we’re just talking about cash flow. But real estate has multiple profit centers: cash flow, ROI, appreciation, tax benefits, and raising rents over time.
The JWB team has the spreadsheet and can walk real estate investors through the exercise to uncover a more significant return on their money even faster. That’s financial engineering at its best. It’s the whole picture of your money and how it is working for you.
How Should You Decide What To Pay Off First? Is It The Lowest Balance Or Highest Interest Rate?
The Avalanche strategy is to get rid of the highest interest payment first. If you have a 4% interest rate vs. a 7% interest rate, you can see how Paul compares them in his spreadsheet demonstration. If you pay down the highest interest first, using the Avalanche strategy, you can see in the calculator how quickly you can shave years off of your mortgage payment.
If you use the C3X strategy, that is paying off the lowest balance. Both the Avalanche method and the C3X methods operate super well, but it’s wise to consult the spreadsheet and run your portfolio’s numbers with the JWB team. Regardless of which strategy you use, you’re still paying off debt ahead of schedule.
We usually have uniform interest rates as the default in the calculator tool, but that’s not the case for every investor. In your portfolio, you may have many interest rates across the board. This tool is beneficial!
You can run an analysis with the JWB team to see if you can reach your financial goals one or two or three years earlier. That’s huge!
Where Is This Spreadsheet? Can JWB Clients Gain Access To This Tool?
If you want access to get it, meet with your JWB team to find out how to plan your investment strategy. Call our office and speak with your portfolio manager. Paul explained that this is a giant spreadsheet tool that can be “broken,” so you need to talk to someone about it to ensure the tool produces the correct results.
You Don’t Include Monthly Escrow Payments In This Spreadsheet. Why?
This tool gets you the concept and strategy and is not going to reflect reality accurately. This tool gives you a ballpark idea of what will happen if you invest more of your cash flow into paying off your mortgages.
With Net Cash Flow, Do You Take Into Account Months Where The Property Isn’t Rented?
No, this tool isn’t going to predict what happens to your property in real life accurately. This tool will show no exact scenario in real life, but it will give you the concept and strategy of reducing your monthly debt.
Does the C3X Strategy Apply To Other Properties Outside of JWB?
Yes! You can look at other properties like ones you’ve inherited or an apartment complex to decide if it’s going to be a good deal. Yes, it’s a financial calculator for any real estate property that has a mortgage.
This financial engineering tool is the simple, boiled-down essence of a corporate finance tool using financial models and financial theory. You can use it on your commercial property portfolio or business loans if you really want to, but it is primarily designed for uncovering some mathematical finance options for investors in single-family rental homes.
Do You Recommend The Lowest Mortgage Versus The Highest Interest On What Gets Paid Down First?
Paul’s favorite answer is “It depends.” Anyone attending Paul’s live classes can learn what to begin paying off first. Let the math tell you what to pay off first.
Houses have emotions tied to them. If you run the Avalanche strategy, which is paying down the highest interest, versus the lowest balance C3X strategy, you will find out what will pay off your loan faster. Don’t be muddled in your method of trying to do both.
Pick one plan and stick with that strategy over the long term. But look at the math, and Paul reminded us to “Measure twice, and cut once!”
Can You Use Home Equity Credit To Pay Off Properties Faster?
It depends. Paul uses his home equity line of credit to acquire more properties and does not use it to pay off other loans. Home equity line of credit is designed for short-term debt. He does not advise you to use a home equity line of credit (HELOC) to pay down the debt on other properties.
Instead, get the long-term debt with low-interest rates to allow you to obtain more properties. If you do it wrong with a home equity line of credit, you could get yourself in a financial bind. Use the HELOC wisely.
How is the HELOC paid down?
The HELOC is paid down like a credit card. It functions like a loan you pay back with interest on it. Maybe you use the money to buy something, and you have to pay the bank monthly to pay off that debt. But be careful with adding HELOCs on top of your existing long-term mortgage.
With the C3X spreadsheet tool, you should run the analysis to see how quickly you can pay off the long-term debt and the short-term debt, too. You can get yourself into a bind quickly if you’re not careful and you overleverage debt. This happened in 2008 with double leverage, and it got a lot of people into financial trouble.
You have to be careful using HELOCs. Does it make sense in your unique situation? That’s an advanced strategy, and you can put the loan balance in the CSX calculator to see how quickly you can pay it off.
I Refinanced All Properties Now, But I Want To Pay Them Off Quickly. Shall I Start Paying Extra Principal To The Lowest Balance And Use Financial Engineering To Pay Off The Loan Quicker?
It sounds like a great strategy, but your situation could be unique. Talk with the JWB team and use the cash flow calculator to determine how the C3X method could help you pay off the loan quicker.
How Do We Get In Contact With Paul Shively?
Paul is not Mr. Social Media, but people love hearing his wisdom. Paul explained that Gregg’s JWB team is the best conduit for getting more information and running the C3X tool numbers.
Go to www.ChatWithJWB.com. Our organizations have been working together for 15 years, and we will put you in touch with Fortune Builders if you want to include their strategies in your investment plan.
How Do I Find Out More About Investing With JWB?
Contact the JWB team to begin the discussion. If you want to invest in Jacksonville real estate, now is a great time to jump in. Go to www.ChatWithJWB.com and find out how we can help you reach your financial goals.
If you want to use the C3X spreadsheet tool to do some financial engineering and see how it applies to your personal real estate loans and investment strategy, contact your JWB Portfolio Manager. The JWB team knows how to use this powerful tool to help you reach financial independence.
If you want to become part of the JWB online community, join us in the JWB Facebook Group at https://www.facebook.com/CashFlowProperties.
You can also go to www.JWBInventory.com to see what properties are currently available. We encourage you to contact the JWB team for a consultation to determine how our turnkey rental properties can deliver positive passive income cash flow.
We hope you enjoyed hearing what Paul Shively shared about financial engineering and paying down your real estate loans in record time. The Jacksonville real estate market continues to grow and JWB is excited to help many investors from around the United States create positive cash flow from the hard asset class of single-family home rentals. Contact us today!
To Your Success,
Gregg Cohen