My financial situation

[Ricardo S.]

As 2014 comes to an end and 2015 soon begins. I want to purchase my first rental property under 50k in Atlanta GA in Q1 of 2016. I will eventually move there when i'm older. NYC isn't where I want to live anymore. I'm 22, in college, living in Brooklyn in a SFR with my mother. Here is my financial situation:

I have 3 credit cards: (owe/limit)

 Chase Sapphire: 4.5k/5k      monthly payment= $120

Citi Platinum Select: 4.8k/5k   monthly payment= $115

Amex Green: 0/no limit (charge card)

Total I owe: 9.3K/10k 

Income (after tax) = 2k/month. - expenses = 1k (not including CC payments)

Credit score is = 670s

To be able to purchase a Homepath property you need to put at least 10% down which would be about 5k if purchasing a 50k SFR.

Do you recommend paying down both my credit card balances to $0 or can I pay it down until they reach 30% utilization? That way I can save up at least 5k and get a loan?

I don't know what factors are the most important when being approved for a small loan. If repairs are needed to get it rent ready, I would roll the repair costs into the loan as well. 

I don't want to focus my time in paying off my cards completely when there is no need to do so. 

Any advise would be appreciated. 

[Jeff S.]

If your credit cards are 0 then you can use them in a pinch if your property needs a small repair. I understand your sense of urgency but you don't want to get in over your head. Good luck.