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Updated 11 months ago on . Most recent reply

User Stats

24
Posts
10
Votes
Connor Castillo
10
Votes |
24
Posts

Putting money towards loan

Connor Castillo
Posted

Hi all,
The highest interest rate we have on money we are borrowing is one of our investment homes. We have a 7.125% rate on a 250K loan. Does it make sense to pay it off instead of investing in another property because it’s already proven to be successful?

Rent: $4,250/ mo

Monthly expenses (including management): -$600

Monthly Mortgage/ taxes/ insurance etc: -$2,550


thanks

Most Popular Reply

User Stats

88
Posts
47
Votes
Tyler Warrick
  • Lender
  • Chandler, AZ
47
Votes |
88
Posts
Tyler Warrick
  • Lender
  • Chandler, AZ
Replied

Depends what your goals are, @Connor Castillo.

If you are simply after cash flow: pay off the debt

If you are confident in your strategy, use leverage to obtain more properties. This will also have the added benefit of appreciation on two (or more) assets instead of one. 

If you are looking at Cash on Cash Return, real estate tends to be a slower growth model (unless you dip your toes into flips instead of buy and hold).

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