Pay off debt vs. purchase first property

[Regina Sloan]

Hi All, 

Besides our current home, which we are not interested in paying off, we have about $30K of debt, highest interest is 5% (2 cars and few thousand in student loan debt). We are bringing in much high income with contract work, so want to make sure we do what makes the most sense. 

My husband is looking for our first flip, no luck as of yet. We are putting aside funds for 25% down payment on our first rental property. Will be a duplex, likely around $200K and will most likely have tenants already (these are our goals, but are ok with it not being this way). 

Would you put all funds towards down payment on property or knock out debt and then proceed w/ down payment? 

Thanks for reading and weighing in! 

[Eric Janson]

Paying off the debt might give you peace of mind, but if the debt is not hurting your ability to be pre-approved, I would actually use the to try and buy another property beyond what you are talking about.  I wouldn't pay more towards the down payment.  The less money in the better, I feel.  As long as the numbers are good and it has good cash flow. 

This is just my 2 cents.  I would do what makes you the most comfortable.