What to do with my cash on my first cash out, pay off debt or no?
Main question, how much debt should one carry to acquire more property, if any? Not income producing debt, I am strictly talking small payment debt. Car, cc, student loan. If you have a refi cash out, should you wipe all that out before making another purchase? Interested to hear who would go against a Dave Ramsy train of thought?
I am going through with my first cash out refi on a duplex. I have used most of my cash to get it up for remodel and carried some on cc, and refinanced an inexpensive paid off vehicle to complete the job. The refi is looking like it will be anywhere from 31k-40k cash out. I don't like the feeling of looming debt, however can I do more with the cash opposed to paying off the debt. Interested in thoughts.
The debt looks something like this.
$4,000 on a 3% vehicle loan that is $150/mo-my mind is made up I am getting rid of the vehicle with a different plan, so this will be gone for sure.
$6,500 in cc debt.
I also own another duplex on a 3 year ARM that I have had for about 5 months, I subject to borrowed on it for 32k and will want to refi it in the next year out of the ARM, would need it to be around 28k on the loan. I was going to put down 5k on that principal for the future refi.
Have another duplex that needs about 12k of work done before it can be rented.