Is paying off my mortgage the best idea for my future

[Brian Johnson]

I have in mind of paying one of my properties off in the next few months. The advantage the way I see it is once I pay off the property it will free up my borrowing power a bit more so it will not be such a challenge to finance another property. It is going to cost me $30,000 but in return it will give me about $400.00 more dollars a month. I have thought about keeping the $30K but I am at the 4 mortgage mark and it becomes more difficult to get loans. Our credit score is good at around 725. (this will be the only property we will have payed off if we do this)

My main concern is once I leave my job and go into real estate as a realtor and home flipping on the side. I am worried if I don't free up the books a bit no lender will offer any loans for me to purchase other properties. Should I look at this in a different way or any other options?

Thank you for giving me direct advice from different views.  I know this topic has been discussed several times from other people.

[Ryan Arth]

it depends on what your overall strategy is. If your main concern is not being able to borrow again beyond four mortgages, that really shouldn't be too much of a problem. 

Hypothetically, you tie up 30k to be able to borrow again to buy property number 2. You net is $400 higher per month now, but reserves are squashed, tied up in equity now. This could be a problem for the lender, more so than having four vs five mortgages. At your new cash flow of 1k per month, it would take you 30 months to get back to the same cash position and your return on that property went down because it is now up leveraged. The 30k was just "invested" at a fixed rate return of whatever the mortgage rate it paid off was at.

Now how everything ties in with the move and getting situated at the new job and all that, that takes it away from a pure mathematical/leverage situation, and is also very personal. And that dance is why this business is a mixture of art and science sometimes.