So I have three mortgages on three very different properties. I am having a hard time deciding which one to pay off since I can throw in $2K a month extra. So hear me out and let me know what would you do..
1) A small 1 bedroom condo located in the hip part of the town. The rent is going through the roof. We have $82K left on 5.65% interest rate. I have a positive cash flow of $150 a month and goes up every year. Hard to refi since it's an investment property.
2) A retail commercial building located in a different state. I have positive $3K cash flow a month if all are rented. I still have $500K left on mortgage. 5.35% and I have only 12 years left on it. If this baby gets paid off, the total cash flow can completely replace our entire household income plus benefits.
3) Our own principle residence. It's on a 4% 30 year loan and we just bought it a couple of month ago with $417K mortgage.
My extra $2K a month can knock out #1 in a short a few years and we can snowball all the income to the next mortgage. Paying off our own house obviously will give us peace of mind knowing that we own our house!. But paying off #2 has the biggest payback, yet #2 is also our biggest risk. Since the mortgage amount is so huge each month, if we have less than 50% occupancy, we would be in rice and bean situation trying to stay afloat. If we can knock out this baby say in 7,8 years, we can basically retire. But that's a long 7,8 years...