To Pay off Student Loan or Not

[Leonard Rybak]

Hi everybody, I will be receiving a hefty amount in inheritance in the next few months, and I want to have the right mind set coming in. I already own 1 single family LTR and would like to get more. I currently use DSCR loans because my debt-to-income ratio is too high to be approved for conventional loans.

I also have 200k in student debt which I originally was planning to have forgiven after paying minimum monthly payments for the next 15 years ( then they will forgive the remainder) which will eventually equal approximately $117K paid by me,  and approximately  $83k forgiven 

My question is, should I pay off the debt immediately when I receive the inheritance and use any remaining cash to purchase only 2 or 3 homes (using either DSCR loans or full cash purchases)

or

keep my loan, continue making approx $650 a month payments, and invest my inheritance in several brrrr deals or 4 or 5 DSCR loan single family homes or 2/3 duplexs.

Any advice or insights would be great appreciated

[Nathan Gesner]

Quote from @Leonard Rybak:

You'll get differing opinions on this, but mine is the only one that matters. ;)

Most will tell you to keep the debt if your interest rate is lower than the return on your investment. For example, if your student loan is 5% interest and you can buy a renal property that earns a 10% return, that still puts you 5% positive and you should keep the student debt.

It's foolishness.

Proverbs 26:7 "The rich rules over the poor, and the borrower is the slave of the lender."

There are some formulas that look good on paper but don't work out in reality. As long as you carry that debt, you are holding yourself back in other ways. Talk to anyone that's become financially free and they'll tell you it lifts many burdens off their shoulder, not just one.

Pay off all debt. Create an emergency fund. Once you are financially stable and disciplined, then you'll be ready to start investing successfully.