Partner. Capital. Slow down or keep pushing?

Question

I’m 24 in Oklahoma working on my second deal. My first one was a primary residence that’s I turned into a rental. The deal I have under contract now is on an investment loan with a 50/50 partner. In 6 months my current residence will become my third rental. And I’m going to be accruing quite a bit of debt. I’m wondering if I should save and pay down debt or if I should keep buying and finding ways to make deals happen. I would like to try flips to fund more rentals eventually but I have a good thing going now and want to keep learning what I’m good at before I venture off. Any advice or help would be greatly appreciated. Thank you guys!

Andrew Hogan · Answer

Keep looking for ways to add value before selling or refinancing. Rinse and repeat. If it's with a solid partner, you can do it at a much faster pace. All the best

Rick Novotny · Answer

When you say debt, do you just mean mortgage debt that is covered by your renters? I don't find that to be a bad thing as long as it's covered. As you start to scale, vacancy and surprise repairs become much less of a factor. If you don't feel comfortable and don't have a high income to cover in case of emergency, you might consider paying it down. If it's high interest debt, I would absolutely suggest paying it down. And make sure you keep an emergency fund of some kind, the higher the income, the smaller the required emergency fund.

I have about $1,000,000 in mortgage debt (~70% LTV) at the moment and want to keep pushing but down-payment capital is slowing me down, personally.