Newbie wants to invest in Real Estate

[Yvonne Lee]

Hello, my name is Yvonne Lee. I live in Los Angeles area. My husband and I own a house, but still have monthly mortgage. In the meantime, I am looking for a investment property, single home or condo with less HOA in L.A area. Should I pay off my house first before investing in rental property or pay for down payment for the investment property? I am very excited to join this group. If you are here, please drop me a line for any advise regarding investing in rental property. Thank you very much for this wonderful site.

[Joel Owens]

Yvonne any pay down into your primary is dead equity. With many markets being down and now starting to recover I would put money toward and investment first.

If you have a really high interest rate then refi to get your rate down and reduce your monthly debt service. This is predicated on not moving to a new house in the next few years as you will have to absorb paying the refi cost.

The low interest rates out there on primary residence is like almost free money right now. No sense in paying that down extra when you can get properties throwing off way more than the 3 to 4 percent you are paying on your home each month.