I am a brand new investor and trying to purchase two duplexes in my home town of Pittsburg, Kansas. Currently, I owe $19,000 on my primary residence in Sandy, UT. I want to purchase the duplexes outright by buying the duplexes with a new mortgage on my primary residence. My new loan would be for $110,000 for the duplexes, $5,000 cash out and $19,000 for the old mortgage. My new mortgage would cost about $816 a month with $600 for expenses. Rent would be $2200 a month. My wife is a little uncomfortable with us taking out a new mortgage on our primary residence since it is almost paid for. I am looking for some advice about what I should do.
@Jeff Ferlo Welcome to the site. Have you got some boots on the ground in Pittsburg? I had 28 units here and sold them all off (still have 1) to focus on self-storage. I can connect you with some people if not.
Anyways, have you looked into establishing a HELOC? Also, why not get traditional mortgages on the investment properties if that is what would make your wife more comfortable?
I am from Scammon, just outside of Pittsburg. Grew up in that area. I have a cousin who is a realtor and my mother still lives there.
I did look at a HELOC. The HELOC would be the money down on the duplexes. I would have a payment for that as well as my home mortgage, plus the mortgage on the duplexes. I thought putting it all into one mortgage would make more sense and save me on rates as well.
@Jeff Ferlo Have you spoken to any banks about your plans? You could always buy the mortgages with your HELOC, and then after they season you could cash-out refi the duplexes and pay back the heloc.
Who is your cousin? Small world.
I am probably going to purchase the duplexes with my home equity. We have been discussing it and that seems like the best plan.