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Updated almost 16 years ago on . Most recent reply

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S B
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how to finance 2nd investment property

S B
Posted

I own one investment property (duplex, if that matters) - It was quite an ordeal to secure the financing for it: a million questions about what other debt I have, etc. I ended up getting it because I had virtually 0 debt.

Now I'm thinking I want to buy a second one. But what happens when the lender learns I have a 160k mortgage? That obviously is much much more debt than I had last time when I just squeaked by... how does this work? If I can prove that I have tenants, does the lender then ignore/discount the mortgage debt it when qualifying me?

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Donny Random
  • Asheville, NC
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Donny Random
  • Asheville, NC
Replied

SB-

I think you are getting ahead of yourself (I know it is easy to do!). You need to first rent out both units in your duplex asap, it is getting very close to the "off season" for renting. You don't want to try to rent it out during the winter. Also, you need to get the feel of being a landlord and see if it is something you really want to do.
Another thing, when you apply for a loan for a second property, part of the evaluation for that loan is that you have been a successful landlord with your first property. You need to rent it out so you can demonstrate that you are capable as a landlord. So get to it!
Good luck!

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