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Updated almost 8 years ago on .
Question(s) with multiple rental property financing.
Hello pros,
I'm needing some advice. Let's say I would like to purchase multiple single family homes to rent out. My short term goal is to get the first purchase under my belt needing for experience, etc. Secondary goal is to add to that up to 4 additional rental properties. My COH is not that great currently so my intentions would be a HELOC or dip in my 401k.
Option 1) Let's say I could get roughly $50k from a HELOC. My goal would be to find a home that I could pay cash with the $50k and then rent it out. Could I then refinance the home, reload (pay off) my HELOC, repeat?
Option 2) Or, would it be better to use the $50k as down payment on purchases as needed and get another type of loan to cover the remainder 80% of the purchase? The only problem here is how do I refinance to get my HELOC reloaded after several purchases when my HELOC is open and already have 2 mortgage loans (1 being primary home and second is the 80% cost of the first rental property)?
Option 3) dip in my 401k for down payments and get the remainder 80% through a lender/bank?
I guess what I'm asking is how could I do this to keep on rinsing and repeating without looking like I have a open HELOC account and 10 loans? Hopefully this is not a dumb question.
Thanks in advanced,
Doug