Goal: 2nd rental property. Scratching my head for a strategy.

[Vy Mai]

We took out equity from our residential house for a 20% down payment for our 1st rental property. We've been renting it out for a year now.  Looks like the house has appreciate 25K more than when I bought it. What can I do to buy a third rental property? Can I take equity out from the rental property?...I'm hearing a no in my head but any advices?

[Joe Splitrock]

Originally posted by @Vy Mai:

@Joe Splitrock.@Andrew Johnson Yes, monthly rent is $1900, rental property mortgage + HELOC is $1500. Right now, my safest route is paying off the HELOC and then take it out again to buy a third house. However, it would take at least 2 yrs to do so. So that's why I'm scratching my head :). Thanks for your confirmation!

I think paying down the HELOC before getting the next house is a good plan. The two years will go by really fast.