I have 70k, what now???

[Chance Cooper]

Ok guys here’s the scoop. My wife inherited a piece of commercial property about a year ago. It is raw land and I currently have it listed, it is worth right at $170,000 based off my realtor and it’s listed for that. I already own 1 rental property that cash flows $300 a month and should be paid off by June of 2015. It will then cash flow $850. I know a lot of you don’t believe in paying off rentals, but I want at least one paid off so that if another goes unrented in the future I have money to help me with it. Just my preference.

My wife and I wanted to grow our rental portfolio so we got a little creative with the raw commercial land. We went down to our local bank and asked for a loan on the land. After giving the banker everything she asked for she called us the next day and said we were easily approved, we asked for $70,000.

My wife and I have come up with a couple of different scenarios but would like your thoughts and guidance. The loan is for 10 years at 6% payment of $777 a month.

My thoughts was to pull 20k from the 70k and use it as down payments on 3 more rentals until I own 3 more which means I would only have 10k left to play with. Each would cash flow for $300 a month and Id have 10k to use in case of an emergency.

I also considered just paying cash for another 70k home but then Id have all my marbles in that one home….

Not sure which way to go next but I do know were in good position right now, I think... The reason we took the loan out on the land is because I figured I could make something happen with the money rather than just looking at the land that is not helping me at all. Now I can maneuver a little bit with the cash.

So lets recap…

I have one rental that cash flows for $300 a month, it will be paid off in June of 2015 then it will cash flow for $850 a month.

I am approved for a 70k loan at 6% payments of 777 a month for 10 years. The money is on its way, approximately 30-45 days…

What would be your next move?