This would be the least passive but potentially the largest upside. 

First, estimate what the renovation would cost, how long it would take, and how much extra you could potentially sell the property for once it’s fixed up.

If I pay it off, I could maximize cash flow earlier, reducing financial stress and allowing me to focus on other ventures or simply enjoy life more.On the other hand, I know some people advocate for keeping cheap debt and using the extra cash to invest elsewhere for potentially higher returns.Why I’m leaning toward paying it off:Security: No debt = peace of mind.Financial freedom earlier: A fully paid-off rental would give me a significant monthly cash flow?

For example, using 70-80% leverage could preserve your cash for more deals while maintaining strong returns.A blended approach might work: pay cash for smaller deals to avoid delays and borrow on more significant properties to spread risk.

Your plan to house hack a multifamily property in Indianapolis is a great strategy to start building equity and learning the ropes with manageable risk.

As more people placed more properties in STR inventory, and as more municipalities taxed and regulated the industry, the profitability of the overall industry has reverted to a much more aligned (lower) risk adjusted return.  

Bigger deals can be a good angle to attack AND that being said there is a greater deal of risk involved. 

Minimal risk.

Birmingham’s market is diverse, with various areas offering different levels of potential and risk, so getting boots on the ground can be one of the best investments you make in terms of time and money.I’d be happy to connect and share more about what I’ve learned from my experience managing properties in this market. 

Quote from @V.G Jason: I don't understand borrowing money to borrow money.Especially in this environment, why take that risk?