Need Advice / Pay Debt down or get 2nd Deal

[Nathan Frost]

I'm looking for some advice on the best move here. I recently did a cash-out refi on one LTR and am selling another, which should net me around $40–50k. I currently have $37k in debt: $15k on a 0% credit card and $22k on an interest-only business line of credit. Part of me wants to wipe out the LOC (and maybe all the debt) and strengthen my balance sheet, keep solid reserves, and then look for another deal from a safer position. The other part of me wants to use the cash to acquire a second STR now and use the cash flow over the next few years to pay down the debt, aiming to be debt-free while holding two strong properties long term. My goal is to be in the best position possible in 2–3 years. For those who've been in a similar spot, would you prioritize cleaning up debt first or leveraging into another deal? Any tips on how you'd approach this strategically?

Because in my mind I'd love to get a second deal but with that I know comes stress and some unwanted expenses but long term it can really do wonders.  Just have to be conservative with it.

[James Jones]

You are not really choosing between “debt free” and “second deal.”

You are choosing between stability and velocity.

Here is how I would think about it strategically.

First, look at the nature of the debt.

• $15k at 0 percent is not urgent.

• $22k interest only LOC is risk. Variable rate, callable, and psychologically heavy.

That LOC is the weak link in your balance sheet.

If you net $40k to $50k, you could:

Option A. Clean slate approach

– Wipe out the $22k LOC immediately.

– Keep the 0 percent card until promo ends.

– Maintain strong reserves.

– Rebuild liquidity.

– Hunt for the next deal from a position of strength.

Option B. Aggressive leverage

– Keep the LOC.

– Use proceeds for STR down payment.

– Rely on projected cash flow to service debt.

– Accept higher stress and thinner margin for error.

Now zoom out to your stated goal: best position in 2 to 3 years.

In a 2 to 3 year window, liquidity and optionality matter more than raw door count.

If you eliminate the LOC:

• Your DTI improves.

• Your stress drops.

• Your risk profile improves for lenders.

• You protect yourself if STR performance underwhelms.

STR income is not guaranteed. It is seasonal, regulatory sensitive, and expense heavy. Layering that on top of consumer and business debt increases fragility.

Personally, I would:

Kill the LOC.

Set aside 6 months reserves across properties.

Keep the 0 percent card until expiration, but have a payoff plan.

Reevaluate in 6 to 12 months with a stronger balance sheet.

There will always be another deal. There is not always another clean reset opportunity.

Wealth is built by controlled leverage, not constant leverage.

If you cannot comfortably carry both properties and all debt through a bad 6 month stretch, you are scaling too fast.

Strength first. Then scale.