Can you do zero down and keep your current house?

[Jennipher Jess]

Hello everyone on BP, I am new here. 

My husband and I have done 2 live in flips and are currently living in our 3rd one. However, we love this house. We cannot sell it as of yet for many reasons. That said, we just refinanced when rates are good and want to start investing in real estate outside of the homes we live in. Cash is tight so we are unsure how to get started with a down payment. Could you do a second mortgage with zero down? 

[Paul De Luca]

@Jennipher Jess

Investment property loans (non-owner occupied) generally require larger down payments (20-25%), maybe 10-15% if you find portfolio lender/credit union you can get better terms. If cash is already tight, does it really make sense to get another property? 

[Joe Funari]

@Jennipher Jess I would suggest you reach out to my preferred lender that is local here in the DFW area and a fellow investor, @Andrew Postell. He is a guru at going over options on best way to help you use the equity in your home to obtain additional rental properties. He has worked such miracles for me over the years. If you need any help with additional REI purchases I will be happy to answer any questions you may have. I work all over the DFW area and surrounding counties.

[Jeff Roth]

Congratulations on your success with live in flips.

Hopefully you have adequate equity in your current house to pull out to invest in other property.

If so, keep your current mortgage with favorable rates and take out a HELOC that allows you the flexibility to lock in a portion as a loan so the interest rate does not float on the used balance. Call around and compare rates and programs. Credit unions are good places to focus and they are less likely to reduce or close your line of credit if market conditions soften.

Happy to help!

[Andrew Postell]

@Jennipher Jess thanks for posting.  Always great to hear from a fellow Texan.

Would you mind me asking what  your home is currently worth?  And how much is your current loan balance?  (approximately is fine)

That will  help me with the math and making a firm suggestion.  Thanks!

[Jennipher Jess]

Quote from @Andrew Postell:

@Jennipher Jess thanks for posting.  Always great to hear from a fellow Texan.

Would you mind me asking what  your home is currently worth?  And how much is your current loan balance?  (approximately is fine)

That will  help me with the math and making a firm suggestion.  Thanks!

Believe it is worth around 700k and we owe a little over 320k. 

[Jennipher Jess]

Quote from @Jeff Roth:

Congratulations on your success with live in flips.

Hopefully you have adequate equity in your current house to pull out to invest in other property.

If so, keep your current mortgage with favorable rates and take out a HELOC that allows you the flexibility to lock in a portion as a loan so the interest rate does not float on the used balance. Call around and compare rates and programs. Credit unions are good places to focus and they are less likely to reduce or close your line of credit if market conditions soften.

Happy to help!

Thank you for the tip :) 

[Jennipher Jess]

Quote from @Joe Funari:

@Jennipher Jess I would suggest you reach out to my preferred lender that is local here in the DFW area and a fellow investor, @Andrew Postell. He is a guru at going over options on best way to help you use the equity in your home to obtain additional rental properties. He has worked such miracles for me over the years. If you need any help with additional REI purchases I will be happy to answer any questions you may have. I work all over the DFW area and surrounding counties.

Thank you for this information. What is your speciality in real estate? 

[Jennipher Jess]

Quote from @Paul De Luca:

@Jennipher Jess

Investment property loans (non-owner occupied) generally require larger down payments (20-25%), maybe 10-15% if you find portfolio lender/credit union you can get better terms. If cash is already tight, does it really make sense to get another property? 

If we can find a deal on a property, but don't have the cash on hand (because it is locked in the equity of the home), I don't see why not. Curious about what others have done in this situation. Is the best strategy always to move out of your current home, buy another and make the original home an investment or are there other ways to start building wealth and keep your current home?

[Bud Gaffney]

@Jennipher Jess no

[Ben Zimmerman]

You're not going to find a 0 down investment loan option. Its much, much easier to keep buying homes for yourself and simply rent the house you previously lived in. If you live in Denton, then you are on the edge of a major metro area and can use something like the HUD rural development loan which is a 0 down option so long as you earn less than 115% of median income for the area and live in a 'somewhat' rural zone. The term rural is pretty generous and would involve pretty much any house on the outskirts of denton or any town that is close by that is smaller than denton.

Just a few miles from denton is Ponder which has some nice subdivisions and qualfies as 'rural'

https://www.google.com/maps/@3...

[Jennipher Jess]

Quote from @Bud Gaffney:

@Jennipher Jess no

 Could you elaborate more on your answer?

[Joe Funari]

Quote from @Jennipher Jess:

Quote from @Joe Funari:

@Jennipher Jess I would suggest you reach out to my preferred lender that is local here in the DFW area and a fellow investor, @Andrew Postell. He is a guru at going over options on best way to help you use the equity in your home to obtain additional rental properties. He has worked such miracles for me over the years. If you need any help with additional REI purchases I will be happy to answer any questions you may have. I work all over the DFW area and surrounding counties.

Thank you for this information. What is your speciality in real estate? 

@Jennipher Jess My specialty is Buy & Hold &  Flips for both single family and multifamily.

[Jay Hurst]

Quote from @Jennipher Jess:

Hello everyone on BP, I am new here. 

My husband and I have done 2 live in flips and are currently living in our 3rd one. However, we love this house. We cannot sell it as of yet for many reasons. That said, we just refinanced when rates are good and want to start investing in real estate outside of the homes we live in. Cash is tight so we are unsure how to get started with a down payment. Could you do a second mortgage with zero down? 

 @Jennipher Jess The min down payment for a non-owner property would be 15% down. You would have three options to to access equity in your current home to use for that down payment. You can cash out refi up to 80% as a first lien, but you mentioned you just refinanced your loan so you likely do not want to do that with the recent surge in interest rates. The other two options are second mortgages (leaving your first mortgage in place) either a Home equity line of credit (HELOC) or a home equity loan (HELOAN). The HELOC is a variable rate but you open ended meaning you can pull money, pay it back and pull it again. The HELOAN is a fixed rate but closed ended meaning you can only use the money once. There are pro's and con's to both approaches.

[Andrew Postell]

@Jennipher Jess hmmm, I guess my question is if you just refinanced....why didn't we do a cash out refinance? I mean, I guess it doesn't matter....but that would have been my suggestion at the time. I'm sure someone suggested it at the time. But with that much equity in your home you can do either - a cash out refinance or a HELOC. Both will provide you with the cash to purchase another home.

The only way I know to purchase an investment property with little to no money out of your pocket is using the BRRRR method. But even the best of us come out of pocket some on those transactions usually.

Hope all of that makes sense.