Refi and payoff student loans?

[Leroy Wallace Jr]

So. I am finishing up my first BRRRR deal. The numbers on the refi seem to be working out, almost to the dollar, for what I owe in student loans. I pay $817/mo for my student loans.

My question is should I pay off my student loans and count my student loan payment as my new “cash flow”, or should I use the almost $80k for another property? I know that with paying off the student loans I don’t have the upside that appreciation on a multi might give me. However, in the Boston area where I currently invest I don’t think I could match this cash flow...

Let me know what you think. I’m torn!

PS if it matters I have another 12 years left of that payment... which is daunting..

[Frank Jiang]

You look at the interest rate of the HELOC and compare that to the interest rate of the student loans. In a vacuum, if the interest rate on the student debt is higher, you should pay that off.

That said, here are items you should consider:

- How long will it take you to save up money from other income sources to make another purchase if you were to pay off the student loan?  If you already have cash for another purchase, make your decision based on the interest rate.

- Do you have positive cashflow on the property after refi?  If so, does that cashflow cover the payment on your student loan?  If the answer is yes, you should probably just try to find another property and use the income from the first property to offset the student loan.