Mortgage Debt Payoff

[Eugene Lee]

Hi All,

Kind of a thought experiment which may turn into reality for me; I'd really appreciate your thoughts on this, BP community. 
Let's say that you have a portfolio of ten single families with debts ranging from 5% down to 4%. For the sake of the experiment, let's also say that the loan amounts ranging from 50k to 100k on the 5% properties are higher than the loan amount on the 4% properties. 
My question is - Just because mortgages don't really work like the average loan, all things being equal (equity positions on homes), would you choose to pay off the larger 5% loans first or the smaller 4% loans and roll those into paying off the 5% loans? 

I'm leaning towards paying off the smaller loans first just because it would allow you to snowball those debts quicker. What say you BP? 

[John Hill]

If your looking to grow then don't pay off any of them! Leverage the low rates and use the cash to invest in other properties. Paying mortgage debt in full avoids your ability to claim interest as a deduction and banks will never allow you to leverage 100% of your equity in the homes... In reality you will be lucky to borrow 80% and even than, think of the hassle of dealing with a mortgage broker or bank on a refi...

Just my 2 sense. Keep in mind that there are a million ways to crack the nuts of real estate investing...

John