Decisions, Decisions! Wanted: Advice on First Steps

[Jessica Staton]

Hello Everyone!
I happened upon this site and I am so excited as a result of it! I have been glued to the forum posts and am juicing the treads for all of the knowledge contained within. The site is right! BiggerPockets is addictive.
I have a couple of basic questions about the direction my husband and I should take. We recently bought our first home (seller financed) in August 2010 and are looking to begin acquiring additional properties to rent and also some to buy low with cash and sell for a profit.
Now, we are saving to have ~$10,000 by August 2011 and are wondering what would be the best route to take with regard to spending the money. Should we look to:
1. Put the money toward the home we have, and pay it off early (sale price $49K)
2. Use our previous seller as a lender and use the money toward the down payment of another home for the purpose of investing (at a 9% interest rate + a higher sale price than he will buy it for)
3. Buy a low cost cash home in the area (Metro-Detroit) and use it to generate cash flow as a rental (taking into consideration the need for repairs)
4. Hold half of the money and use the other half to build up credit so that we can obtain a reasonable interest rate on a bank mortgage for an investment property or another home while using this home as a rental
5. None of the above (be sure to fill in the blank with your preferred suggestion, O Knowledgeable Ones!) :wink: __________________________________

Thanks, in advance, for the responses! I look forward to the help!