All Forum Posts by: Mohammad Haidarasl

@Mohammad Haidarasl  Not knowing how much your debt is, the interest rates and payment along with your income, makes it hard to give advice.  Generally speaking, your interest on your student loans will be lower and as long as you can save for a rental, you can then use the extra income from the rental to service your debt.

Get into REI first, but make sure to learn the in's and out's before making your first investment. Lock in the longest term for your student loans as possible.

@Mohammad Haidarasl if you have multiple separate loans (with different loan amounts outstanding and interest rates), consider picking some to pay off completely to help free up your Debt-to-Income ratio a bit. This will come in handy if you need to speak to a lender about a rental property in the near future.

Freeing up those fixed monthly minimum debt payments can be a big deal to a lender as well as to yourself for cash-flow and flexibility reasons.

@Mohammad Haidarasl not counting the potential investment income, can you make the payments with your current cashflow? If so I would invest you cash pile. If not, look at refinancing it to a lower rate and see if you put down some money if the payment will be more manageable.

 This would be easier to answer if we know how much student debt you have and how much you earn? There is a huge difference between you owing $18,000 and $300,000.

If you owe $18,000 and make $100,000/yr, then I suggest you pay it off as soon as possible. Postpone investing until after you are finished. If you owe $300,000 and make $20,000 then I suggest you put off investing or paying the loan down until after you can greatly increase your income.

Now is a great time to refinance your debt- I was able to lower my 6 figure debt to 3%, which has allowed quite a bit of freedom to look at other investment opportunities.

I know the scenarios given are often "but you could make 8%+ with that money!" Having been in BIGGER student debt than now, sometimes there's a mental victory from not feeling that weight. You have to decide how important that is to your happiness. Also, that's a guaranteed return of (insert interest rate here) v. investing which has risk in the best of circumstances. Lastly, if you need to take out a loan to REI, often your debts are incorporated in that decision and may disqualify you.

Make sure your earning potential is maximized, your other debts (credit card, etc.) are definitely taken care of, and then weigh the pros/cons. Best of luck!

@Mohammad Haidarasl I would echo what @Adam Parker said here. 

Let's say that you were paying 5% interest on your student loan debt.

Well, if you had the capital, and you could put it into an investment that was going to get you 8% do you think that would be a good idea?

It isn't quite as simple as this, but you would essentially be netting that 3% difference. 

Yes, it is great to get debt off of your books and out of your head, but if you can put your capital to work for you instead and get a better return then that's the better option. 

@Mohammad Haidarasl what kind of rates on your debt ? I think depending on what rates you can get on a mortgage that could be a better thing to paying down all the debt

I would start investing now. Getting financing is a big part of real estate investing so using cash to pay off that debt at this point of your real estate journey will make the journey slower.