Updated over 8 years ago on . Most recent reply
Taking equity from first house for second house ?
I own my first house which i built a few years ago. The house now appraises for over 430 k and could comfortably sell it for 405 k. I owe 315 k on the house and am now interested in buying a second house for around 150 k with taking 20 k of equity from the first home for a down payment.
Is this too high of a risk to take or is this a common way to move into a second investment? Also what is the advantage of keeping the first home? It could rent for 2200 and the mortgage is 1800. I want to do it since we rent the basement of the first home for 1200 and this has been incredibly easy income as I did all the work on the home and know how to do any repairs.
What risks do I face by doing this aside from the common ones of the water heater and furnace going out ? Any pointers appreciated!