Pay Off Debt Or Invest?

[Shane Elias-Calles]

Hey BP Here is a current situation I need some advice on.

Currently have 45k in liquid cash, and 60k on a HELOC. On the debt side I have a 9k car loan, and 7.5k on a zero interest credit card. Should I pay off the debt before buying a property? Or buy another rental and continue to chip away at the debt monthly?

Thanks

Shane

[Shane Elias-Calles]

Quote from @Steve Vaughan:

My guess is your liquid cash is earning less than half of what your heloc is costing.  Cash earning 4%, heloc costing 8% for example. 

Unless you fear your bank will freeze your credit line (the bank is in trouble), I'd pay down the heloc and use it as 'liquid cash'.  

We've maintained a heloc while having liquid cash in savings because our heloc is only 4.3% and tax deductible.   If your numbers aren't similar, optimize by paying down the heloc. You'll still have access to the funds. 

 Thanks Steve, that is a correct assumption, and it is the direction I am pursuing now. will be using the cash to pay down the heloc then lock and load when the next good deal comes along! I appreciate the insight