2 properties - looking at adding a 3rd. Best way to finance?

Question

I have 2 properties in the Denver Metro area with no debt. I found one in Omaha. What advice would you give for financing a 3rd property? I do not have more than 5% for a down payment. Thanks!

Caleb Brown · Answer

The 2 properties you have don't have any debt? If that's the case you can refi. You can refi to have enough for a DP for a 3rd property. HELOC can be an option but it's more expensive and you'd want to pay that off quickly. I would make sure you have money saved before adding the 3rd to be a safety net. If you refi and pull money out leave some set aside for a rainy day/repairs/maintenance.

Laura Navaquin · Answer

Hey Scott
That’s awesome, you’re in a great position with two debt-free properties already! For financing the third one with only 5% down, here are a few options to consider:

• Leverage Your Equity – You could look into a HELOC or cash-out refinance on one of your Denver properties to free up funds for the down payment (or even buy outright, depending on the price point in Omaha).
• Seller Financing – This could be a great option, especially if it’s off-market. You’d be surprised how many sellers are open to it when approached the right way.
• Partnership – If you’re short on cash but have the experience and hustle, bringing in a capital partner might make sense for this deal.
• DSCR or Low-Down Conventional Loans – Some lenders offer investor-friendly products with low down payment requirements. DSCR loans, for example, focus more on the property’s income than your personal income.

Leverage Your Equity – You could look into a HELOC or cash-out refinance on one of your Denver properties to free up funds for the down payment (or even buy outright, depending on the price point in Omaha).

Seller Financing – This could be a great option, especially if it’s off-market. You’d be surprised how many sellers are open to it when approached the right way.

Partnership – If you’re short on cash but have the experience and hustle, bringing in a capital partner might make sense for this deal.

DSCR or Low-Down Conventional Loans – Some lenders offer investor-friendly products with low down payment requirements. DSCR loans, for example, focus more on the property’s income than your personal income.

Happy to connect you with a few lenders or run some numbers with you if that’d be helpful!

Mike Grudzien · Answer

Cash out refi and definitely put aside reserves since you're stretching thin....

Daniel Luedtke · Answer

Hey Scott. Is one of the homes you own free and clear, your primary residence? Or both investment properties? Bridge really isn't going to work if you are keeping the properties. I think your best bet, depending on equity, is just cash out refi (first mortgage) on the property that has the most equity. Shoot me a DM or call if you want to chat about options.

Trina Woods · Answer

Hey there, Scott! Owning two properties outright in the Denver area is a strong position to be in — nice work.

If you're looking to finance a third property in Omaha with under 5% down, traditional lenders might be a bit limited, but there are definitely some creative ways we can structure this.

Here are a few options worth considering:

• Leverage your current equity: Since your Denver properties have no debt, we might be able to tap into that equity — either through a cash-out refi or by using one of them as collateral — to help cover the down payment on the Omaha deal. This way, you're putting your assets to work without pulling from your savings.
• DSCR or bridge loan: If the Omaha property is going to generate rental income (or already does), a DSCR loan could be a great fit. These focus more on the property’s cash flow than your personal income, and we can usually structure them with a lot more flexibility.
•  I’d love to hear more about the property in Omaha and what your longer-term game plan looks like.

Leverage your current equity: Since your Denver properties have no debt, we might be able to tap into that equity — either through a cash-out refi or by using one of them as collateral — to help cover the down payment on the Omaha deal. This way, you're putting your assets to work without pulling from your savings.

DSCR or bridge loan: If the Omaha property is going to generate rental income (or already does), a DSCR loan could be a great fit. These focus more on the property’s cash flow than your personal income, and we can usually structure them with a lot more flexibility.

I’d love to hear more about the property in Omaha and what your longer-term game plan looks like.

Patrick Roberts · Answer

Cashout refi on one of the free and clear properties. If you have to do 2 loans (because you cant get enough cash from the refi to buy in all cash), then use a purchase money loan on the new property for the bulk of the financing. Typically, purchase money loans have better pricing than cashout refi's. Also, if you can keep both loans below 60% LTV or even 50% LTV, you'll get better pricing as well.

Try to close both with the same lender and ask for some help on the fees since they are doing both loans at the same time. Plan to send some time talking through scenarios with your lender as loan amount and LTV can affect pricing - you should be able to work out a sweet spot to get the best terms.

Erik Estrada · Answer

Hey Scott,

Like others have stated you might want top consider a cash out refi on your two existing properties to finance the purchase of your new property. You could also look into a HELOC if the plan is to buy properties that need renovation.

Kiernan LaFaver · Answer

Definitely sounds like a cash out refinance would be the way to go if there's no debt on the other properties. Typically with a loan you'd need 20-25% down with what I've seen in my experience for investment properties

2 properties - looking at adding a 3rd. Best way to finance?

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