(Financing) Buying a home to use current home as rental

2 Replies

Hello!  I am just getting started in real estate investing (no deals yet) and have an idea on how to get started but wanted to hear your thoughts....  

I currently live in and own a home that had previously been a rental property (I believe for 10 years).  I am thinking about buying a new home to move in to and holding the one I currently own as a rental.  The obvious issue is coming up with a down payment on a new home without any equity from the sale of my current home.  The second (and maybe more tricky) issue that I foresee is securing financing on a new home.  I am hearing that lenders will require 2 years of occupancy on a rented home before they will approve financing for the next home.  Does that sound right?  Any ideas on how to get around this?  Again, I am new to this and am open to suggestions.

Thanks!

It really varies by lender.  The same goes for people saying you can only have 4 loans. 

Don't believe everything you hear.

On a podcast I recently listened to there was a guy that had 10 loans at his bank and they told him he can take out more if he wants.

You need to make a list of all the banks in your area.  Not the big banks, but the community banks and call each one, talk to a banker.  That really is the best way.  It may take calling over 20 banks, but it's definitely possible.  Don't give up someone will definitely fund you.

I wouldn't really worry about not having equity in your current home.

It wouldn't hurt to list your house for rent right now to get a feel of what is out there.

Otherwise you can always try to find an investor to make your down payment or go with an fha which only requires 3.5% down.

Awesome! Thanks for the suggestions.

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