I would start of with building a portfolio debt free and then later down the track potentially using finance. Just my opinion. I once had a large portfolio that was highly leveraged and remember thinking at the time how good it would have been to have 5-10 houses with no debt just producing cash-flow that is sufficient to cover costs on any other property when issues arise. And believe it. There will always be issues. Thanks

Like others said, it depends on your situation. I personally have gone the route of purchasing all my new properties free and clear and not have any debt. I have some properties that I have purchased with finance, but the last few properties I have purchased have been free and clear. Instead of paying off old mortgages, I decided to put the money towards purchasing new free and clear properties. I have been investing in single family houses, not by design necessarily, but that's what's been available in my market lately.

@Sovannary O. it all depends on your personal situation. If you have enough to buy a property and reserves to cover unexpected expenses buying a cashflowing rental might be a good idea. Will you be able to make mortgage payments from your paycheck if you buy a new rental, then I would go that route. If things are tight financially right now keep some for cash reserves, if you have cash reserves then definitely pay down debt until you are ready to buy.

Mortgage on your primary residence?? Depends on the situation with current mortgage and when it is coming due versus the returns you can get out there buying another property.

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Updated about 11 years ago, 01/24/2014

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Sovannary O.Poster

los angeles, CA

General Real Estate Investing

Debt or Cash Flow?

Sovannary O.Poster

los angeles, CA

Posted January 23, 2014 21:09

If you have extra money lying around, is it best to put that money towards your mortgage or invest it in putting 20% down on an investment property - single family home or duplex?

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