how to approach second property?

2 Replies

i own a primary. i own an investment property. (my investment property was purchased 6 months ago because the deal was wayyyyy to good to let go! it was free!)

there is a second investment property near my work that i am greatly considering to move on. he property is listed for 70k. might be able to get it for 60k. in any event, i need to figure out a way to best finance this.

i contacted lenders who will write a small note, under 50k. my DTI will work and my w2 support the numbers. the X factor the i have come to realize is the lenders need to see 6 months reserves on all properties i own and 20-25% down plus closing costs....

for a 70k property i need a down payment of 14k plus closing costs PLUS 6 months of reserves of my primary residences mortgage taxes insurance ( 9 k) and six months of taxes and insurance for investment property number 1 ( 2k )...thats comes in around 30k when all is said and done to be sitting in my account, seasoned ! this troubles me a bit, i might just have to get a HELOC on investment property number 1 and pay the difference in cash. the guidelines are more flexible. closing costs are minimal. draw period for 10 years. i dont need seasoned money like i would for another mortgage....

Yea, that is pretty standard for conventional financing. 3 months PITI on your own and 6 months PITI on all current investments and the one you are buying.

You can count 75% of Your total 401k, as the reserves, just ask.


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