how to buy a second rental home

Question

I have my own house I live in with a mortgage of 90.000. its value is 100.000. I have house I rent out and own free and clear its worth 35,000. I also rent out a 1 bed room apartment in the house I live. in. my question is how do I go about buying another rental home. im thinking I might have to much debt ratio

David D'Errico · Answer

After checking with a lender to see what your debt to income ratio is, that will give you an idea if you can qualify for a loan.

You can also consider looking into owner financing. No need to qualify with a bank if you find someone willing to sell owner financed, then they become your bank. Research this strategy.

If you are comfortable downsizing, you can move and rent out the other space in your primary residence to create cash flow. Also look into multifamily units with 1-4 units, they qualify for owner occupant rates and they are a great way to earn income. Ask @Brandon Turner

Brett K. · Answer

Tracy,

If you are willing to move out of your current residence you may be able to get a good deal on a HUD house, etc..  First, go over your options with a lender to see if it will work.  They should be able to offer you sage advice and help you design a strategy.  If you can't use traditional financing you may be able to use creative financing but be careful.  If your debt to income is high you don't want to get yourself into debt you cannot repay.  If you have unreported income or some other situation where you think new debt isn't a real deterrent that's another matter.

Tracy Jacklovitz · Answer

I would like to give some one my financial situation, and have some one see if they have some advice for mr

Tracy Jacklovitz · Answer

Thanks brett , I know other people are doing it, just need some one to show me the way. or tell me what I should do. what I was thinking is maybe I shouldmove out of my home and rent the upper half to. seeing I have the bottom rented it is in a good location about 100 yards from a ski hill. but I owe a lot on it yet and don't think I can get another loan for a new house. there must be a way I can get it done. any one got any ideas. can I bundle all my debt into one big loan or is that a bad idea. maybe I should seel my personal residence and start over. any help or advise would be greatly appreciated

Brett K. · Answer

Tracy,

I'd start by talking to a loan officer.  I'd try to find one that is investor friendly.  They will be able to tell you if your debt to income ratio is too high for traditional financing.  If it is, there are still options but you will have to get creative.