My story, what should I do?

[Drew Mylenbusch]

Looking to get feedback as to what you would suggest I do, I don't think there is a wrong answer but I just can not decide which route to go. 

Own my home, have around 40-50k equity.

Own 1 rental that cash flows right at $300 a month.

Have 25k in student loans at ~5%. 

Have around $40k to invest or payoff debt, and that is the question.

Should I pay off student loans with my cash and save back up before I buy another property, refinance my home and payoff student loans and still buy a property? The other thing to note is that my student loan payments are a little north of $400 a month. I would be looking for a home around $150k and expect to cash flow $300-400 a month for where I live. This may be a stupid question but I am indecisive with what to do and just looking for opinions.

[Brit F.]

Paying $25k to earn $4.8k/annually sounds pretty good (19% Cash on Cash return before taxes), and you still have $15k in reserves.

Alternatively, presuming all $40k goes into the $150k house purchase, the cashflow may cover the student loan debt payment, but you have $0 in reserves.  This increases your risk unless you have other reserves.

I would be inclined to pay off the student loan debt.