What would you do? Grad school loans

Question

Looking to invest after grad school And need a little advice. I would consider my debt from undergrad low -$19k and I have been working hard not to pull out loans for grad school, which would cost me another $15k for the semesters I have left. I can afford to pay out of pocket but someone recently suggested I use the loans I qualify for and start building capital with my own money then pay off loans with money I make off investments. What do you guys think? I'm a little worried about pulling out loans because I don't want to have a high debt to income ratio. Thanks!

Bryan O. · Answer

Hi @Cemone Cowart. I pulled max student loans during my masters program knowing I was going to invest in RE. It was a big part of how I was able to FHA a 3-unit. Buying that unit has given me well into the double-digit returns already, plus whatever appreciation I might get. The income far outweighed the student loan payments. I also have a good W2 job that banks love me for and experience investing in RE prior to that, so your mileage may vary.

Another thing to factor is your location. If I were doing it all again here in Denver I wouldn't do it because the market is very tight and I wouldn't be sure that a deal I can find would be good enough to pay the loans and line my pockets.

It's more about what fits your particular flavor of investing. Numbers work in both directions, so it will be more about your internal risk profile. Best of luck!

Tony Mai · Answer

hey cemone,

I depends how aggressive you want to be.  Obviously being the most aggress you would pay as little as you can on your loans and reduce your debt/borrowed money.  Save what you would have paid into the loan repayment.  Then use that money towards a purchase.  You can put as little as 3% down on your first purchase of your 1st primary home.  Hope that helps!