How do I leverage equity in my current rentals to purchase more?
Property #1: Found a 3100 square foot duplex that needed some tlc but for the right price I could afford the repairs. Decided to purchase as is. Although, I encountered a problem. Had the money for down payment and repairs but with lack of credit history I couldn’t get approved by the bank so I had to get creative. Convinced the seller to do a contract for deed with a low down payment and a year and a half later I refinanced so that my name is on the property. I have a loan for $113000and the property is worth $150000 at the minimum. Both units are rented and I’m sitting well with cash flow.
Property #2: while on the contract for deed for the 1st property, I found a second property that was a 1600 square foot duplex that I negotiated a good price for and pursued a rent to own contract. Roughly a year and some change later I’m officially closing on the $130000 property with an $80000 loan. I live in one unit and the other unit is rented with cash flow.
Now, here's where I need advice. With my name on two duplexes and with my current LTV's on the properties... what should I do to leverage these properties in order to purchase my next duplex? For example, can I pull out a HELOC on them, refinance them, and use the funds from the HELOCS as a down payment for property #3?
Any advice will be greatly appreciated!
Best Regards,
A fellow property investor