Ideas to stretch a budget temporarily to finance a purchase
Hi there,
Looking for some clever RE finance advice. I want to get into RE investing by starting to rent out my current townhome after upgrading into a SFR in a better school district. I'm in the Bay area so prices are extreme. So here are the details:
My current townhome could rent out for about $3700 and the monthly mortgage is $2700. Plus it is in an great location and I bet appreciation will be higher here than most other area in the bay area – e.g. Trader Joe's is opening its first store in this neighborhood just a few blocks away. All this to say... I would rather not sell.
But I'd like to get my kids into a better school and to have a backyard. Therefore, we want to upgrade our townhome into a SFR. My current townhome is valued at 1.2M (I own about 50% of that equity) and SFRs in the neighborhood I want to target go for 1.85M to 2.0M. To do this without selling my townhome would mean a jumbo loan of 1.6M in addition to my current mortgage. My debt-to-income, as you can imagine, won't allow for it because well since I don't have rental income yet then it's a risk mainstream banks won't take.
Any ideas on how to accomplish this?