What would you do?

[Josh Jacobsen]

Hi Friends,

First time poster to BP, but I've really enjoyed reading some of the stories, and bits of wisdom others have posted on this site. I'm curious to know which path some of the experienced investors would take in my situation.

I bought my first house 14 months ago just before I turned 27. My mortgage payment is $1753, and I've been able to rent my basement out for $1300 a month since. I am 100% confident that I could get $2500+ if I were to rent the entire house. I recently sat down with my mortgage broker who gave me the go ahead to use up to another $270k to purchase another single family home as a primary residence in my same city.

I haven't seen anything on the market that will either A) allow me to move and keep my current basement renters as roommates, or B) lower my monthly mortgage payment (IE: not spend the entire $270k, but more like $200k.

I do have a steady mix of debt (student loans, baby bills, car - no credit cards) totaling about $13k with interest rates no higher than 6.55%, and a total monthly payment of $625.

Would you, the more experienced real estate investor, rather A) hunt for a house that either costs less or accommodates roommates, or B) use your down payment to get out of debt and save the $625 monthly?

Any and all advice is welcome. Thanks!