Have $40k and ready to start investing

[Zack Ellard]

Hey guys. My wife and I are about to sell the house I owned before we got married (we currently live in hers) and we will have about $40K to work with to begin our investing career. We do have about $14K credit card debt, $17K student loan debt, and about $17K car debt. What would be the best option in your opinion to get into the game? -We have a healthy income of about 95K a year. -Our credit scores are just above 620 however we have almost 99% utilization on them so using some of the money to pay them down should increase our credit scores significantly. -Primarily interested in buy and hold real estate but would entertain other methods if it would an obvious better option just beginning -We live in the Tulsa, Oklahoma area. Any and all comments are appreciated.

[John Kunick]

Zack, RE investing is a great way to grow wealth if you do it the right way.

But, let me encourage you to spend some time to plan..  While you have that time, here is my best FINANCIAL advice I can offer to you:

1. Take that $40k and pay off your credit cards.  With $95k income, don't get into any additional credit card debt.
2. Pay off either the car loan or student loan debt depending on which has the highest interest rate.  You may be able to pay off both if you take the interest from your credit card debt that you will be saving and apply it towards the other debt.
3. Take the savings from all of that debt and start putting it into a savings account earmarked for a down payment on your first real estate venture.

Once you have no debt, beyond your primary residence, then start buying additional real estate.  You will find that you can negotiate better deals and get better financing terms this way.

As to the different types of real estate investing, I have only done "buy and hold" via rental properties.  We are fortunate that we live in a low cost market that also has a relatively high rental demand.  

Best of luck.