Pay off all Credit Card Debt Before First REI Deal?

[Melanie Johnson]

Hi everyone! I'm new to the forums and to REI. I haven't done my first deal yet. Actually, my husband and I nearly bought a place earlier this year. That place fell through at the last minute, but although I was hugely disappointed at the time, in hindsight, it wasn't a great deal for us, I learned a lot and the whole experience got me inspired to start looking into real estate investing.

My husband and I have a small amount of savings - around $25k, which is enough to buy a rental property - but we also have credit card debt of about $19k. That sucks and I'm not proud of it - but I'm so proud of how far we've come. Two years ago we were drowning in over $40k of CC debt, I was just coming out of being laid off, and I was regularly worried sick about what we were going to do to survice. So I feel really proud of our efforts to pay it down. We have worked hard and hustled, and now finally we moving into positive net worth territory even with the credit card debt after years of having a negative net worth. 

Anyway, one of the reasons our potential house deal fell through earlier this year was because of the credit card debt. I'm now in a position where I could pay it all off in one fell swoop - but it would wipe out most of our savings and we'd have to start rebuilding them before we would again be in a position to invest in a rental property. 

I have a few options. I could pay off some of the debt and hang on to more of our cash reserves, which I could use to start investing. I could keep paying a large amount each month to the card companies (I have payment deals with them so interest is low). I could take some money out of my 401k and lend it to myself to put towards the debt. OR I could pay it all off in one fell swoop, start rebuilding my reserves firstly by paying myself what I was paying the credit card companies. 

What would you do if you were me? All advice welcome!