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First, thanks to anyone reading and giving time to help a new, young investor.

I'm 24 years old and my annual income is roughly $60K.

I currently own 2 houses in my home town, which is a pretty small farming community (population roughly 12k).

1 of which I am selling on contract which in 2 years will give me roughly $40k due to equity I have in it. Presently, though, I'm renting it out to this person buying on contract.

The other I am currently renting out for $550/month.
My total expenses for this property including water/trash/mortgage/insurance/taxes
is roughly $450.
My mortgage is an 80/20.
The 80 is a 3 year ARM currently at 5.5%
The 20 is at 7.24%
I didn't put any money down on this house as I originally bought it as a second house.

I have a student loan for $17k at 5.3%

I have a car loan with $2.5k left at 6.35%

I currently have about $10k saved.
I'm capable of saving roughly $1,000/month if I watch my spending fairly closely which I typically do.
Therefore, I have a few options on how to invest this and wanted some more experienced advice/opinions.

What I originally was thinking was that I wanted to use the money to buy another rental house. Housing is (obviously) rather cheap back in my home town.
For the $10k I could put money down on a house and net about $150/month by renting it out. This is assuming I keep the house rented which is fairly easy to do there. This isn't including tax kickbacks from the mortgage or actual principal paid against loan either.

My main concern is that I will keep generating more and more debt.
My goal is to have enough income one day from real estate and other investments so that I don't need a day to day job. Should I not worry about debt since it is for a business and essentially being paid by my tenants?

The way I see it is that I'm getting a pretty huge return on my investment with the rental property.
Including tax incentives I'll be bringing in roughly $2,500 annually from a $10k investment.
Houses don't appreciate much there, but the principal I'm paying against the loan will obviously increase with time also.

My thinking is that if I buy another property my money will be making more money instead of paying off debt.
This seems to be a more viable option to me.
The only interest that isn't tax deductable is my car loan which is fairly low anyway.
My other concern is having all this new debt possibly affecting my credit score and things like that.
Also, I feel I should probably have a few grand in some sort of emergency fund just in case something happens, but I guess that's another topic all together.

I was also wondering if anyone knew of a way to buy a rental house without putting the 20% down since I can't buy another second house again as I already bought one house in this manner.

Lastly, how worried should I be about my ARM jumping up significantly? I know there is a cap but I'm just worried that my mortgage payment would exceed what I get from rent. My next loan I think I will get a fixed rate, unless someone else suggests otherwise.

I'm also open to any other investment ideas, or just general thoughts.
I hope that wasn't too much all at once for anyone.
Thanks again for your time.
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