leverage or pay down debt.......can't decide, i want both!

[Mel Rosario]

Ok, first I invest in California. I know some of you will criticize that it's harder to invest in California, downpayments may need to be higher in order to cash flow, cap rates are not as high, etc. It's working for me so far and this is my comfort zone because I invest in the areas I know well and have easy access. Maybe when I have a self running portfolio, I may venture out of state. I am keeping my day job for now, making good money.

I am coming into cash because I just sold a triplex which gave me a lot of headaches. Now I have options:

Paydown a quad that has about $350k on mortgage and immediately frees up an extra $21K (4.5% mortgage rate) or use this $350k on a downpayment somewhere in california again? From what I have seen, $350 will get me a downpayment on a nice quad as an example (cash flow + principle paydown of course) or leverage 1-3 houses and carry a mortgage etc.

Paying off my mortgage will give me about (net/pretax) $50k in total cash flow combined with my other properties a year (is this enough to get the snowball rolling?). After that being said, I still have adequate funds to put a downpayment for other properties. So my dilemma is to:

1. do not pay down but buy more properties, and use the cash flow from the newly aquired properties to paydown some of the mortgages. (hard to find really great cash flowing rentals where I am, SoCal). this may take a little longer, but in the long run, the tenants will pay for the mortgages, but I would have acquired more properties in a short span.

2. pay down, buy another property or two with my reserve, and use my cash flow to pay down the newer properties (snowballing). depending on the type rental will depend how fast i paydown. ie a multiplex vs sfh will take me a few more extra years to pay off, versus, 2 small condos or sfh.

I have reached an impasse. I do want to acquire more places but I also don't want to over leverage myself either. If anyone here on BP have some creative thoughts or advice, please let me know.

This business is crazy, you always want more, at least that is how I feel.