How can I used my current rentals to invest in future ones?

[Yolanda Martinez]

I have 2 rentals now but want to know what types of loans if any I can use to invest in more homes. Any one have any suggestions?

[Nghi Le]

I assume you have low-interest 1st lien mortgages on those properties that you don't want to pay off. If you can qualify for it, get a HELOC or HELOAN on those properties.

Or find a creative private/hard money lender that can tap into that equity in 2nd lien position or to cross-collateralize them with the purchase of the new property and use that equity towards your cash to close so you can buy that next deal without much cash out of pocket.  This only works on flips and BRRRRs, otherwise you won't be able to pay off that much debt unless you have other sources of income coming in.

This is what I did on my last deal in TX. I had two properties in WA state that had 3% mortgages in 1st lien position, but was sitting at about 50% LTV on them. I purchased a 3-property portfolio in San Antonio (13 units) for $465k from a wholesaler and got a loan on them for $510k because the lender also cross-collateralized my WA properties (without paying off the 1st lien) and used that to cover all of my cash to close. I ended up getting about $20k back at closing (on a purchase) and used that to start my renovations on the vacant units.