Updated over 1 year ago on . Most recent reply
Financing for a 2nd rental property
Hi Everyone,
Only just discovered this forum as I am currently reading Small and Mighty Real Estate Investing. I'm looking for some advice on financing to purchase a 2nd rental property. Here's scenario:
In my early 50's married with 2 kids, good income, live in San Diego, CA. Primary residence is valued at $1.8m with 10 years and $400K left on a 1.875% 15 year fixed rate mortgage. Bought a 1,000 sq ft rental unit about 4 years ago and put 20% ish down. The property is valued at $665K with 25 ish years and $310K left on a 3.125% 30 year fixed rate mortgage. The rental property generates approx $5k of positive cash flow per year. It's 1 mile from where I live so it's self managed.
I'm thinking about purchasing a 2nd rental property, but haven't started looking yet. I'm open to bringing in approx $50K but think I'll need to bring in more to cover realtor/closing costs esp if I want it to avoid it being cash negative each month. I am completely new to this stage of my journey so wondering if there's some way I can leverage some of my other assets to make this work. I'm happy for the current rental property to go cash neutral if need be. Appreciate any suggestions from the community.