Save for BRRR or pay down current property

[David Castillo]

Hello,

Hi, my name is Dave. I'm lost and I do not know what I am doing. Earlier this year, I purchased my first 4-plex investment property on a 30 year mortgage. I currently have only 14% equity in this 290K property. I pay mortgage insurance on it. The property is not distressed.

Shortly after the purchase, I read the BRRRR Book. I now desire to use the BRRRR method to build a portfolio of several small multi-family properties. The only way to increase equity in the this property would be to aggressively pay it down. I only cash flow $400 per month from it. However, I have 15K in savings and 2K extra monthly cash flow from my W-2 job.

I'm unsure if I should pay this property down then leverage for a BRRRR; Or if I should continue to build my savings to do a BRRRR. I'm targeting small distressed multi-families in the 250K-300K range.

Any guidance is appreciated. 

Thank you,

Dave 

[Karl McGarvey]

Paying it down would take cash out of your pocket to put a down payment on a BRRRR project. I would be saving as much cash as possible to set myself up for deal #2 because the costs of a rehab can become unexpected and way more than planned for sometimes. Cash is king, it cant do much for you sitting in the lenders hands from overpaying.