Mortgage question on owning multiple rentals then buy new home

Mortgage question on owning multiple rentals then buy new home

Real Estate Investor · Saint Louis, MO · Member since 2013 · 21 posts · 0 votes

Hello, i own two rental properties. One property I will have the renovation done this week and I have lots of equity in it. My second property is a 2-family and I live on the premises. The property needs about $60k for full renovation. My credit score is in the low 660's. I do not want to sell either property. How do I get the necessary funds to complete the 2nd property repair and upgrade work? My goal is to have both rental properties rented and then I buy myself a house. What would be your advice in this scenario. BTW the loan that I have on the 2nd property is a VA Loan, primary residence. I want to be able to use my VA Loan again in order to buy a house. My main concern is if I try to borrow funds and refinance out of my VA Loan then adding the $60k to my new mortgage may not net me enough income to want to keep the property as a rental. Any assistance with this scenario would be great. I really need to get the repairs done and buy a house. A mortgage person told me that I may run into issues in buying a house if I have multiple rentals. He is telling me to sell my condo and use the money to renovate my 2-family and then he will refinance me out of the VA Loan. I want to keep both properties. Other than me doing the work and saving money is there any other solution to this issue.

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  • Zack KarpPro Member
    Lender · Schaumburg, IL · Member since 2015 · 834 posts · 774 votes
    5y

    @Steven Haskins how do you want to get $60K and not add it to your mortgage?  Do you want the money fairy to just give you $60K?

    Seriously though, the FHA 203K is your best bet, so that you can finance the rehab. That also frees up your full VA entitlement to buy the next property.

    Or do a cash out refi on the first property.  I don't know how much "lots" is, but if you have enough equity that's another solution.

    And you do not need to sell in order to buy another property with VA, you absolutely can have multiple rental properties and qualify for a new VA loan. You're talking to the wrong lender.

    TYFYS and best of luck!

  • Member since 2020 · 2 posts · 0 votes
    5y

    Have you considered a HELOC? Use a small local bank

  • Real Estate Investor · Saint Louis, MO · Member since 2013 · 21 posts · 0 votes
    5y

    Hello Zac & Dino,

    Thank you both for the feedback. I met with three contractors this week and should have some estimates after the holiday. I will speak to my lender about the FHA 203k loan and a neighborhood bank about the HELOC.

  • Realtor · Lubbock, TX · Member since 2020 · 144 posts · 80 votes
    5y

    I would seriously consider a HELOC. If local doesn't work out there are quite a few national options I would recommend and a TON I would avoid at all costs! Definitely let us know what your local banks say.

  • Real Estate Investor · Saint Louis, MO · Member since 2013 · 21 posts · 0 votes
    5y

    Thanks Tyler. I am just waiting on my quotes to come in. I will try a HELOC.

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