I have about $50,000 in debt including my car payments which is probably the biggest debt.

With a title search/insurance you don't have to worry about assuming part of someone's debt, unless your contract specifies you will.

@Jeremy McClure It all depends on your monthly DTI (Debt-to-Income) to see if you can borrow from a bank again.

 * If the seller has debt on it, then it's also an easy way to find a bank crazy enough to lend on it.

Look at auto subprime, student debt subprime, oil subprime.  

I actually attempted to pull out as much as I could get, but because my debt to income ratio was so high 80k was the best they could do for me.  

My original thought is to pay off the rental ($45k) because the 700 month after expenses is a better return than .75% in a savings account.After reading similar threads here, others would argue pay off your personal debt and let renters pay down the other mortgage.  

Banks are at their old games again... loaning to people who shouldn't be buying houses, underwriting amounts that are outrageous and packaging and selling of off mortgages based on debt class.When I appraise a house I toss out the outliers (the lowest and highest sold) I then use comps like anyone else would.  

The $ 3,500 figure is figured at closer to 5% for management and does not include debt payment.  

Besides, my opinions on what's wrong with the property, the only way to make this property cash flow positive is increase your down payment to 30 to 35%, this way your debt service will become smaller than your rental income and you'll start earning a $25 a month of positive cash flow.Austin is a tough market, if you are going for newer properties.