Pay down debt or Buy first prop?

Question

This is my delima......we are getting a bonus of about 10k and adding to savings to pay off some debt.  But, I have been looking at a fixer upper.  Which should I do first?

Erick Jimenez · Answer

Pay down your debt.

I agree with Lou Castillo, if you find a good deal it is easy to find some investor or buyer to wholesale it to.

OPM when you buy fixers, flip for cashflow.

Good luck.

E.

Toby Munk · Answer

Get rid of your debt first. It will make your REI much easier when you get going. Debt that is used to invest is very very different from debt that yielded consumption.

Debt is leverage when it comes to real estate investment. That is a good thing if you are on to a winner.

Adrian Pillow · Answer

Pay off your debt.  It is a sure investment.

I have to assume that you are referring to credit card debt..?

Lou Castillo · Answer

Paying down debt is always a good thing. The question is really can you do both? If the fixer upper that you are looking at is a really good deal, you could pick it up and wholesale it to anotehr investor. You would have to put none of your money into it, aand could still make $5000-$10,000. Then use your original bonus and your profit to pay down debt and have it available for future deals. Just be sure that it is a profitable deal before you get it.