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Private Lending & Conventional Mortgage Advice

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Michael Garson
  • Philadelphia, PA
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2nd House Strategy

Michael Garson
  • Philadelphia, PA
Posted Jan 22 2014, 20:31

Which house first?

I found a deal on a cheap, small house, for 65K. I plan to live there for a year, and fix it up a bit, before moving on and renting it out. Which allows me a 5% down loan and I'd have cash left over to fix it up.

So, when plotting buying my second house, which would become the owner occupied home, would they consider the new house an investment, and thus I'll need 20% down for that?

My concern is that by buying the investment house first, I ruin my chances at getting a less than 20% down loan on the 2nd home, where I'd really plan to settle in. I'll be looking at a 150K or so house after that, so it'd take me a while to have the 30K plus closing to pull that off.

Is it a better strategy to get the 150K home first, then buy the investment home? It's just that this one house is a great deal, and I wouldn't mind living there for a year, before moving on.

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