How do I get more rental property?

Question

How do I go from one single family rental to maybe a another duplex or another single family?  I have owned this rental property for over 10 years and I have a $230k house that was originally bought for $142k.  I owe $120k.  I've contemplated selling it and taking the equity to buy a duplex close to where I live.  It is in the Dallas area which saw a large appreciation.

Kieran Donahue · Answer

I guess I’m a bit clueless on how to get money.  Can you borrow from the equity on rental property reasonably?  I believe I have approximately $100k equity. Loan to value is 120/230.  I didn’t know if I’d be better off selling what I got and buying an entirely new property?  How does one usually qualify income wise buying a $250k 2 unit duplex as investment property with $100k down payment?  My dilemma is I am making $1300 rent which should be higher I think around $1500 when I could own a 2 unit duplex with approximately the same debt and cost at $250k and make 2x$1200 mo rent.  I also didn’t know if it is better to just live in one side of the duplex for a year to get lower FHA interest rates.  I own my permanent resident outright.

Taylor L. · Answer

You need two components: a deal and money. You've identified a great way to free up money, by selling your current property. You could also refinance or take out a HELOC. Have you been looking at deals and making offers?