Where should i use my money

[Michael Anthony]

Hello I am a young entrepreneur.  I do residential construction and I am currently living in a single family house that I am flipping.  I plan to live here for 3-5 more years because I enjoy the house.

I have money (roughly 20k) that is burning a hole in my pocket.  I want to fix up my house, but I also want to become wealthy.  My 2 biggest debts are my college loans and my truck. 

I am looking for advice on what to do with this money.  I could either pay off some debt to lower my debt-income ratio and this will help me buy more houses, or I could use this money to continue fixing my home.

I am open minded to any suggestions and would greatly appreciate some advice from a veteran investor or financial professional.  

Thank you!

[Mindy Jensen]

@Michael Anthony, how much debt do you have? Would that $20k wipe out either the student loans or the truck payment? Any chance you could get rid of the truck and payment, then buy a less expensive truck with some of the cash?

What type of work is left on the house? If you are going to be there 3-5 years more, you can do small jobs around the house to fix it up while saving more money and paying down the debt.

I am a big fan of paying off the debt as soon as you can so it doesn't hang over your head. Start with whatever has the highest interest rate and pay that debt off, then the next highest, and so on and so on.

Home Depot and Lowe's both have store credit cards that offer no interest on purchases of ~$200 or more. If you make the minimum monthly payment on time every month, and pay the entire amount off before the end of the promotional period, you will pay zero interest - essentially a free loan. It can be a tricky thing, and if you leave even $1 on the bill after the promotional period ends, you will pay interest on the entire amount, so if you can't pay it off, don't use it.

Have you read about house-hacking yet? This is where you either rent a room in your current house to someone, or you purchase a small multi-family and live in one unit while renting out the other unit(s). Less than 4 total units and you can get an FHA loan which allows as little as 3.5% down.

Look into the BRRRR strategy of investing as well. Here is a great article about it. Basically, you buy a property that needs work, rehab, rent it out, refinance and pull out cash, repeat.