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Updated almost 12 years ago,
Purchase a 2nd property or payoff the 1st property?
I have a question as to what you all feel is an appropriate course of action in the below scenario:
In 2013 I purchase a multi-family unit and still work a full-time job. By the time 2015 rolls around I have more than enough saved up to purchase a second multi-family unit. I am now contemplating whether it would make economical sense to pay off the first multi-family unit before purchasing a second one. By paying off the first property before purchasing the second one, I no longer have a mortgage payment and have greatly reduced my expenses thusly giving me significant profit going forward. Or, would it make more sense to continue paying the mortgage on the first property and buy the second one? The obvious answer is to buy the second one before paying off the first, but I am trying to argue against conventional wisdom and see what happens.
P.S. - I do realize I would not be able to pay off the first unit with the amount of a down payment on the second property unless the second property is significantly higher in value compared to the first property.
Thanks for all your thoughts/ideas!