Using equity to fund down payment

4 Replies

Hi BP!

Basically noobs here. My wife and I own two properties. One rental property (in Europe) and our condo (New York). We recently took 33% equity out of the rental to purchase our condo. Our rental is paying off the remortgage and still cash flowing. We own the condo outright now. What is a safe strategy for leveraging the equity in our condo to begin building a RE portfolio here in the US? Helco? Mortgage on the condo? I have excellent credit. I know I need to sit down with some lenders but I’d like to get some feedback as to what to ask for going in.

Thanks!

I sound like a broken record, but a high percent of people in today's modern digital world probably never really heard a broken record playing.

Dump all the properties, cash out and buy multi-unit properties and live in one unit. It will be no different than living in a condo and your equity and portfolio will grow exponentially.

I know many people who got rich by re-financing several times, but they could have been filthy rich if they invested in multi-units. It is easier to manage multi-units at the same address vs. single-families all over the world.

Many people have been successful by re-financing properties, but I don't play that game because when things go bad your empire falls like dominoes. Multi-unit properties are much more recession-proof and when the bubbles pop the multi-units do not decrease in value like single families. They actually continue to increase in value because people losing their homes switch to renting apartments and the apartment owners thrive in the worse economies.

@Jack Cross Personally (and I am not an expert) I would finance your primary because you can get a great low interest rate. While I like the idea Jack had about multifamily, I also understand that not everyone wants to take that route. Now as far as safe, no investment is truly safe. The safest method is to keep your primary residence debt free. However, to build wealth, I would definitely do a refi on the primary, take out as much cash as you can and go from there. 

@Jack Orthman Thanks for your response. I have seriously considered multi-family. The issues is two fold with selling the properties. The rental is in the UK so we’re pretty much at the bottom of the market now with because of Brexit. The rental income is very good though and actually went up after a remodel. Our condo is my wife’s dream home. Great neighborhood and schools. I don’t think I could get her to part with it and we’d probably lose money since we recently purchased it. Could very well be worth it in the long run but not a gamble I have the skills or knowledge to take with confidence at this point.