My name is Matthew I’m a licensed electrician and aspiring real estate investor. I live in the north shore area of Massachusetts where I purchased a two family roughly a year ago. I chose to live in the property and rehab it. After hours of sweat equity I am ready to purchase a second property and start the process again. Any advice on the best way to finance a second property? Should I fund it myself , or refinance and use any equity from my current duplex ?
To piggy back of of what Charles said, refinancing is definitely an option if you have the equity. I would also encourage you to look at some hard money options, some of them may even be able to cross collateralize your property if you have enough equity to reduce your down payment. Traditional banks can be iffy about investment properties especially purchase, although that comes down to your personal relationship with your banker and your income. I have even seen banks give out some large lines of credit.
It depends on a couple factors, mainly the equity in your current property and your income. If you have sizable equity in the first property, maybe refinance it and use it for the down payment on the second property. In regards to financing the second property, if it is 1-4 units, you can be approved for financing which has a down payment normally around 20%-25%. In regards to your income, you will need to show income to be approved for financing on the second property. Are you planning on holding both properties or flipping one of them?
To piggy back of of what Charles said, refinancing is definitely an option if you have the equity. I would also encourage you to look at some hard money options, some of them may even be able to cross collateralize your property if you have enough equity to reduce your down payment. Traditional banks can be iffy about investment properties especially purchase, although that comes down to your personal relationship with your banker and your income. I have even seen banks give out some large lines of credit.
I would consider cash out refinancing your primary residence to purchase another property. On a duplex, that is a primary residence you can cash out refinance up to 75% LTV.
@Matthew Stone Do you plan to stay living in the 2 fam you are living in now? If you are open to moving again, you can buy another 2-4 family and live in it to take advantage of the low down payment option. It all comes down to what your goals are, honestly. There are a few different ways to skin this cat, so to speak. Where on the north shore did you buy? I'm in Beverly!