Originally posted by @Justin Zoeller :
Hi all! I have a tough situation I would really appreciate some help on. Heres the situation in a quick paragraph:
I house hacked my first single family home 8 years ago. 1 year ago I moved out of it and into a larger home for my new family. I still currently have my original home as a rental. I am trying to establish how to purchase my 1st actual investment property (not by house hacking) with little or zero down. What would be the best option to take here? Is HELOC on my first home the best or a possible option? Thank you SO much!
If you take out a HELOC on your first property than you're still putting money down. Your best options for low or zero down is to find a property using seller financing, lease option, or get a private lender.
@Justin Zoeller If you want to take conventional loan HELOC will be good option for down payment, in this way you have 100% financing.
Thank you for the responses. I did some investigating here at a local bank and I do not have enough equity in my rental home yet to be able to use it as collateral. Therefore, I am stuck on that option. I was advised just as you advised me James to either open up a credit card for the necessary amount to get the down payment, seller financing, private lender or sell my rental house and use that equity to buy the next. The only problem with that last option is that it seems to defeat the purpose of cashflow if I sell one rental and buy another. Now I just need to figure out what the best option is. Thank you for both of your help and if there is any other advice from here, I would be grateful.
@Justin Zoeller I would keep searching for something you can buy with seller financing, rather than sell your property. The only way I could see doing that is if you buy a multifamily after selling the single family.
@Grant Rothenburger , you are the man. Thank you. If I sold my rental at what I bought it for, I would obtain 15k equity for the multifamily. I assume I need to run the numbers for my area on multi families to see if that 15k would even touch a down payment amount suitable for a reasonable starting complex. I will also continue reviewing and looking for seller financing opportunities.
@Justin Zoeller Seller financing will be good option as @Grant Rothenburger mention or get a partner for next deal if possible.
Thank you both so much!