Pay Off Mortgage or Invest New?

[Nick Klomstad]

Hi All,

In 2013 I purchased a 153k personal residence in Menomonee Falls, WI: A SFH with 20% down and designs to stay. Instead, I was offered a better job and relocated to Chicago only a year later.

I decided to rent it out to a family member and now have roughly 114k remaining on the 4.125% mortgage. FMV for the house currently is about 170k.

The house is currently renting for $900 to that family member but I am told that come July I should be able to rent for $1300+.

In June, I will have the ability to pay off nearly the entire mortgage or take that same sum (roughly 90k) and invest that in what I would like to be a multi-family or commercial type property here in Chicago.

Any advice on what to consider with this decision? I am looking at neighborhoods like Logan Square if I go solo or perhaps joining up with a few others to enter into a nicer neighborhood or bigger opportunity.

Ultimately my goal is to generate cash flow of 60k annually within the next 3 years.

Can't wait to learn from everyone and eventually contribute!

Best,

Nick