Suggestions on mortgage for my rentals.

[Jacob Fisher]

Hello,

I just made an offer on my 3rd rental. My first two I paid 20% down on two 3 bedrooms

1st rental I paid 37000 for at 4.3% interest

2nd 30000 for 5% both 15 year terms. I rent both for $600. Will be raising rent soon.

The third I’m hoping to get under 40k but listed at 49k. I asked the bank for this one, if I could do a 30 year. They said they only do 15year loans on rentals. He offered me to combine all 3 mortgages together for approximately 86k and using some of my equity as a down payment.

Would I be able to use some of my equity for a down payment but keep my loans separate? My first two loans should be getting close to being under 20k. I was thinking about paying my lowest mortgage off after I purchase a third rental.. So I don’t owe as much to the bank and improve my cash flow.

Please give me suggestions.

Thanks.

[Eric Veronica]

@Jacob Fisher I find it strange that you are only being offered a 15 year on investment.  I just closed a 30 year investment in Indiana last month. Must be an overlay specific to that lender. 

I guess the answer to your question is more dependent on how important it is for you to have enough liquidity to jump on the next deal you find. 

If cash flow is the most important thing to you the pay off the mortgages.  If having enough liquidity to jump on the next deal is most important then don’t pay them off. 

My vote would be to not pay off the mortgages. 4.3% and 5% is pretty cheap money