Newbie here. I'm trying to decide the best way to fund my first deal.
I've got about $20k in cash to spend and up to $164k in equity on my personal residence. I also have a car loan for $8k. I'm wondering if I should pay off the car loan and use the remaining cash and a portion of the equity for a downpayment on a duplex. Or should I keep the car loan so as to have more cash available?
Paying off the car is defense. It lowers your expenses on a depreciating asset that doesn't produce an income. I would rather owe $8,000 more on an income producing asset that appreciates than on a car. You would still have enough cash to buy an investment property, which is offense.
@Sarah Mueller Depending on what your current interest rate is would consider a HELOC or a cash out refinance on the primary residence. You can pay the car loan off or leave it there...if the rate is low it doesn't really matter.
Sounds like you've got enough cash to get your first deal! There's lots of ways to go about it which each have pros and cons.