[Sophie]

.. but I wasn’t sure if our rental property would be included in Baby Step 2 as consumer debt?

We owe about $175,000 on a multi-family unit. Should we pay off that first or move to Baby Step 3 and save up 3-6 months of expenses first?

It’s on a 7 year arm loan.

TIA!

[Tracey]

I second what Michele said. $175,000 is a big nut. Dave loves real estate investing, but only while on step 7. If your balance was really close to being paid off, then I’d say to keep it, but it’s far from being paid off. Use the sale of the rental to slingshot you in the baby steps, then work towards investing in rentals again later.

[Michele]

I’d sell and use the money toward the steps I’m on… rental property is great on step seven the home you live in should be paid off and you pay cash upfront for the rental property. Good luck on your journey to financial peace.

[Amy]

How quickly can you pay it off? I believe I’ve heard Dave say (if you decide to keep it) that it can go in BS6 but you should focus on paying off your primary residence first. Is it an option to sell it and use the equity to put toward your primary mortgage?

[Author]

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