My family owns a 3bed 2.5 bath Condo in a gated community in Las Vegas zip code 89123. It's completely paid off and a Zillow search has it probably valued around $300k. They're looking to get into a single story home so that they don't have to deal with stairs with 3 bedrooms and keep the current condo as a rental. I've read and heard a million times about pulling out equity in a home and then using that to acquire more property, but I've never put it into action.
I wanted to hear from the BP community about:
-the best way to implement this strategy- loan companies to talk to, realtors in Las vegas etc
-I don't think they want to manage the property, so perhaps a property manager
-A good real estate agent to find their next house
They can/should be able to Get a new mortgage against their current property for about $240k (about 80% of current appraised value.). That MAY put a crimp in getting another mortgage for their single story home if that will cost more than their current home. But that simply allows them to offer cash for their next house. Otherwise they might as well just get a new mortgage for their new single level home.
They could also get a home equity loan (fixed rate, not a variable rate home equity line). For just enough to put 20% down on their new property if they think they would qualify for the new mortgage with the home equity loan in place.
Is their current $300k condo a good rental? (At least $2,000/mo rent plus any HOA fees?) if not they could just as easily sell the condo and buy the single level home and then go looking for a good rental. This would also be the preferred method if they paid less than $200k for the property as all those gains are tax free now but will be taxable after 2 years as a rental.
Getting a new primary occ loan on the new home would be the way to go in my opinion. The terms will be better than a HELOC.
Can't really discuss recommendations for an agent, lender and pm company here in this forum as they will most likely remove the post. You would have better luck in the marketplace forum or reach out privately.
Best of luck.