All Forum Posts by: Dennis Maynard

I think I would.  I like the idea of being debt free and not beholden to monthly payments.  It feels more liberating.  If houses didn’t cost half a million where I live and we’re more in the 100s or 200s I would be tempted to pay it off too. I think I would have more options to pursues other interests outside of of my w2.   

@Dennis Maynard find a way to do both, earn more money.

It's not about the numbers, it's about the psychology.  When you teach yourself to build and obey a budget and pay off ALL consumer debt, you're ready for real estate investing.  Don't get lost in comparing interest rates.  It's about an individual's attitude and behavior towards money.  

Dude said financial free beats debt free.  I say financial peace beats all.  Pay off all debts then buy investment property free and clear, rinse and repeat.  Eventually your cash flow from properties and job/business allow you to buy them faster and faster -- a snowball effect takes place.  Slow and steady avoiding the KO punches along the way by dabbling with debt.

The mathematical answer might be to use it to buy a cash flowing property, depending on rates of the various debts and what not.  But ultimately it probably comes down to behavior.  Are you going to diligently pay down that consumer debt once you have the extra cash flow?  Or are you going to go deeper in?  Personally we eliminated all consumer debt and student debt shortly after getting married and before buying a house.

Hey Dennis! unless its going to stop you getting the terms you want on an investment or getting approved at all, i would Pay yourself first, meaning get the investment. Then using the income coming in from the property to payoff your investments (using other peoples money)

 Exactly, Frank.

Dennis, just asking this with a straight face shows you don't account for risk, hassle, taxes or transaction costs, borrowing costs, partner and seller risk, etc.  

Paying down debt isn't always the answer, but if the anticipated  gross return is close to equal, take the risk-free, hassle-free,  tax-free path every time. 

I like a balance when it comes to investment. I like cash flow properties but often those cash flow properties have less appreciation in pricing. 

I don't think there's a one-size-fits-all answer to this question, as I've stated multiple times here in the forums. Carrying and paying off debt are not simply mathematical actions. There's psychology involved. I've seen dozens of blowhards take on debt almost effortlessly, only to be crushed in the end by it. Two months ago, I had a conversation with a 5'6", 130 lb. tenant about buying one of my properties. He played the big shot moneyman right up until a week later, when I found him naked in bed with his furry privates out, high as a kite on some kind of smack, blubbering his eyes out over a 400-lb equally naked woman who had just been brought back from death's door with Narcan by paramedics from the three ambulances and five cop cars blocking up the street my duplex is on.

"HE'S JUDGING ME, OH, HE'S JUDGING ME!!!" and "FNO (Furry-N**s-Out)" is now a permanent shorthand code between my wife and I for the eventual outcome of any big talker and dreamer in real estate.

That's tough. 1 hand you could invest use use the return and appreciation to pay off debt. Other hand having high interest rate debt would stress me out especially if things go sideways. In my current situation I'd invest and pay debt down 1-2 years later