looking for advice, pay off property? or buy another?

Question

so I bought a small packaged deal (triplex & single family) the triplex is on a bank loan but I want advice on what to do with the single family.

The single family is on a 7 year 7%  for 23.4k seller financed. about $353/month.

should I pay this off first before buying another property? that would put $350/m in my pocket, and then I can get a bank mortgage on it and pull the money out?   or should I try to save up for another down payment and just keep that on the seller financed loan?

I'm brand new so ill take any advice I can get. thanks!

Ryan Paolucci · Answer

@Sam Teifke & my goal is cash flow, need to get out of my job

Account Closed · Answer

@Ryan Paolucci

Basically you're at breakeven/$0 cash flow.

If you paid it off, would you still have capital to grow?

I'd also talk to a realtor to see what they think the property is worth. Depending on that, you may want to sell it.

Account Closed · Answer

@Ryan Paolucci

What does your SFR rent for? Also what is the cashflow?

Account Closed · Answer

@Ryan Paolucci congrats on the deal.  Another point of consideration may be the loan to value of the property.   Do you have a final target in mind for how much cash flow you would like to achieve to leave your job?  What does your cash position look like?

If the 4 units you bought would provide the cashflow you need when paid off you may want to focus on getting the loans to 0.  If you would need more properties to reach your cash flow level then focus on acquiring more.

I have had a few properties with creative financing that made the deal possible but put the loan to value higher than I was comfortable with.  I worked to get the debt structure and level to a point of I felt good about before moving on.  Good luck

Frank Wong · Answer

Hi Ryan,

At 7% rate, I like that being paid off.  If you were at say 4-5% I would say just keep it and pay the normal schedule of payments.   I also like owning all my properties free and clear so you get a perspective on how I view things.  Sounds like you got yourself a sweet deal.

Ryan Paolucci · Answer

@Sam Teifke honestly not sure what it’s worth. Comps are all over the place from like 10k - 100k

Ryan Paolucci · Answer

@CJ M. $600/m rent