Hi there! Long time listener, first time caller . I feel I'm at a crossroads. I'm moving out of my single family home and moving in with a friend so i can rent out said home for roughly $600 after the mortgage every month. Which I think is a great start. Now another thing I could do is just sell it. Pretty much kill my debt and have enough to buy two investment properties. Which starting out with zero debt is really tempting to me. Because the market is so hot right now should i just bank on my current property after making so much more and wipe my debt or should i just power through the debt and try brrr it.
This would be easier to understand with concrete numbers. So if I understand correctly, you own a house with substantial equity in it.
Option A: Rent it out, and cash flow 600 after the mortgage. After taxes, insurance, 5% maintenance, 5% vacancy, this is probably closer to $300 cash flow.
Option B: Sell it to get your equity. This equity could buy you two more properties.
I don't follow why starting out debt-free is a factor. But what kind of debt are you talking about? Credit card debt? Student loans? Or just the mortgage on your house? If you're just talking about the original mortgage on your SFH, then why does that matter - you're about to accrue more mortgages by getting into real estate. If you're talking about credit card debt, then in the good words of Mr. Money Mustache, "You should treat that like a 'my hair is on fire!' emergency" and by all means pay that off. If it's something in between, like student loans, then think of your interest rate as the guaranteed return on investment.
Without more information, my advice would be to boil everything down to a return on investment. If you can make 100k in cash from selling, then option A is only (300 * 12) / 100k = 3.6% ROI, not good. If you're paying down credit card debt with 19% interest, then that's a guaranteed 19% return on investment (good!). If you invest in more property, then you can figure out your return on investment is for that.
Hope that helps! Hard to give advice without fully understanding the situation.