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36
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11
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Kyle Root
  • Rental Property Investor
  • Appleton, WI
11
Votes |
36
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Carry Personal debt while investing in RE?

Kyle Root
  • Rental Property Investor
  • Appleton, WI
Posted
I hope to get a lot of feedback from this post and I look forward to see what everyone thinks! My portfolio currently consists of a duplex and in 3-4 days I will be closing on a single family home attempting to successfully perform my first BRRRR. With that being said I have been doubling down on the two personal loans that I currently have (student loans & auto loan). After I close on the single family home and complete the renovations would you guys recommend paying off my loans or continue to invest in real estate? My loans are roughly $30K but what is keeping me from paying them off is I think my ROI in real estate will be more then the interest I would pay on my personal loans over the life of the loans. Is it smart to carry this amount of debt and to continue investing or should I pay them off and then get back in the game? I would greatly appreciate any feedback on this. Thanks in advance.

Most Popular Reply

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6,062
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John Warren
  • Real Estate Broker
  • 3412 S. Harlem Avenue Riverside, IL 60546
5,107
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6,062
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John Warren
  • Real Estate Broker
  • 3412 S. Harlem Avenue Riverside, IL 60546
Replied

@Kyle Root if there is one thing I would do differently in my life, it would be to skip paying of the $40,000 in loans my wife and I had when we were first married. It was 2010 and we had the opportunity to really buy discounted properties. Instead, we did the Dave Ramsey thing and paid off debt that was costing us very little. 

Today I borrow money for things when it makes sense. I bought a new van for my wife and took out a .9% interest loan. I feel like I can probably do better on my most recent value add deal than I can paying all cash for something to save .9% interest... 

Realistically, you want to grow your income and net worth as fast as possible. Make sure your debts are easily serviceable, but I wouldn't pay them off if I were in your shoes. 

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