Advice on my situation...

[Ryan Valdez]

I say 'situation' because it's not exactly a strategy.  To make a long story short; I bought a house and rented it out to my family but at a deep discount which means I have negative cash flow from it.  I'm okay with that because I make enough with my current job.  My question is; should I pay off the mortgage ASAP or find other investment properties to cover the negative cash flow? 

[Jennifer T.]

Your long term goals are similar to mine. I actively use my HELOC to acquire new properties. BUT, the equity in my house is from appreciation. Not because I paid the mortgage down.

I'm going to pass down a word of advice from the loan officer I bought my last investment property with, "The cheapest money you will ever find is on the mortgage for your own home."

That's great you have extra money each month for your investment goals. But don't use it to pay down your mortgage. You are so much better off saving that same money for a DP on your next property. Does the property you are referring to have enough equity to get a HELOC without paying the mortgage down? If so, great! Get a HELOC and have even more funds available to you. Or do a cash-out refinance. But I personally like the flexibility of HELOC products.

Something else I want you to consider.  It's easy to say, "Oh, it's family, so I'm going to give them a $400/month discount on the rent (whatever the discount is)."  But it's really not much different than if you were literally giving them $400/month out of your pocket to subsidize their living expenses.  There is also an opportunity cost in that it will take you that much longer to reach your own goals because of that lost income.  Perhaps that is exactly how you think of it and you are fine with it.  That's fair enough!  But, for me, it would have to be an extremely close family member who had some kind of permanent issue for me to subsidize them like that long-term.