What to do with 60K?
Hi All, Here's a scenario I would like some thinking power on.
Depending on the choices I make, at the end of this year I may have somewhere around $60K-90K to deploy. Also, at the end of the year, my situation should look something like this:
One recently purchased personal residence (using up about 15-20K of the above funds)
One recently converted rental with 55K mortgage renting for 750/month
One paid and clear rental renting for 550-600/month
My debts could (and will likely) include:
Converted rental mortgage 55K at 3.75% + PMI with PI 260, TI 220/month
60K in student loan debts at 4.75 to 6.8 percent about 650/month payment
15K car note at 3 percent about 270/month payment
Will probably need to buy another car for my wife (cost TBD)
I could sell my paid and clear rental easily for 35K. I don't like these student loans hovering over my head and killing my DTI ratio. If I sold my rental, I could pay all or most of my student loans off and have a big DP for another rental with a mortgage. I would probably end up with a nicer rental in a better area, but possibly not as profitable, and then there is the whole free and clear vs leverage argument. I could pay off my current home to be converted to a rental (55K) but that is stretched out over a long 30 years at 3.75% interest. I could pay of the car, but it is not costing me much at 3%, however, it does significantly affect my DTI ratio while I am paying on it.
I could pay nothing off and try to squeeze another fully cash paid rental into my portfolio, or I could pay some stuff off and put a DP on another rental. I don't foresee paying nothing off as I feel the need to do at least some debt reduction (somewhere around 30K).
I would like to get everyone's opinion on what they would do in this situation.
Thanks!