Need help moving beyond my first property
Hope all is well. I own one rental property and am looking to purchase another. I refinanced the property around five years ago to help with the down payment for my primary residence. The current condo I own is non-warrantable which eliminates utilizing traditional loans. What would be the best approach to purchase another rental property? Do I refi my condo again?
Take a line of credit on my primary home and buy a property outright? Thank you for your time, efforts and advice.
Most Popular Reply
I used a HELOC on my first property to be able to buy a second property. We chose HELOC instead of refi because we didn't want the rates to change (we got the first property during those golden days of 3% interest).
I just recommend making sure the HELOC payment makes sense from a numbers perspective—consider the interest as another "expense" when you're calculating cash flow. You'll need to plan to pay it off within ~10 years, too. We're making substantial improvements to property #2, so worst case we could always refi to pay off the HELOC.
Always run the numbers and have a Plan B, C, and D! Good luck!