Scenario to get rid of some bad debt?

[JD Gibson]

Hello fellow BPers.

First time caller, long time listener.

I am looking to enter the world of real estate investment in a 2-4 unit hack by the end of the calendar year. I have talked with a couple of lenders, and am hearing the same thing as far as results and ability to buy. "Let's revisit in 3-6 months". Although I do not have the best credit situation, I also do not have the worst (656 mid score). The main reason of the waiting game, I feel, is due to changing jobs 3 months ago, same field, but still not a full 2 years in the field.

That being said, I am looking for ways to make myself more loan worthy over the next 3-6 months. One thing that I have been kicking around is attempting to get rid of my high car payment. The problem is that I made several poor decisions regarding vehicles before starting to research real estate investment, and owe significantly more money than my vehicle is worth.

Monthly payment: $467

Balance left: $25,720

Sell value: $15,000

Negative equity: $10,720

In this situation i was thinking about taking a $10,720 personal loan for the negative equity, getting rid of the car, and paying about $3,000 cash for a vehicle. Depending on the rate and term of the personal loan, I would imagine that payment to be no more than $250. That would immediately free up $200 less reporting to the credit bureaus each month, and additionally lower my monthly car insurance another $60 a month.

One lender suggested that this might not be the best idea to open a high balance loan, that in theory would only be paid down to 90-95% or so of its initial balance in 3-6 months. To be clear, I am comfortable in making the payment, but am looking to make myself more attractive to lenders sooner as opposed to later. If this is not something that would make me more attractive to lenders, does anyone else have other suggestions other than waiting the 3-6 months for improved job time/credit score and saving more money down?

Thanks in advance for any guidance, as well as a thanks to the whole BP community for the wealth of knowledge over the past several months that I have picked up on.

J.D. Gibson