I have been reading and learning and now have a real estate situation I would like to get your opinions on and whether it is a good thing to do or not. I am completely new to investing and know mostly only what I read here. In fact, your comments gave me the idea to try to do this rental.
OK Here goes. I own a house in a nice suburb of Cleveland, Ohio. Appraisal is about 155,000 by the bank for equity loan. I owe 75000 dollars on it. I need to buy a new house in a different suburb area. I need about 75000 dollars down on the house I want to buy in order to get the mortgage payment amount I want/need. I can sell this house and get the 75000 dollars I want. OR I can rent it. (I am still trying to figure out what would be an accurate market rent for this house which is a 4 bed, 2 1/2 bath, 2300 sq feet, very nice updated home in good condition and nice neighborhood since there are no rentals offered in this area of similar homes anybody know how I can find out what my home would rent for when there are no ads for rentals of homes like this in this area that I can find?)If I rent the house out, I figure I could probably get a good rent for it to easily cover the current mortgage. However, I would then need to pull out 75000 dollars in equity for the down payment for the new house or as much equity as I can get out of it and get the rest in regular mortgage for the balance on the new house. Unless there is a better way to do this. I don't even know if I would be allowed to do a home equity pull for down payment and a mortgage this way. I would like to keep this house as a rental and move on, but I need to be able to afford the new house as well. So do you folks think this is a good way to start to get my first rental property? Does anyone know about finance and whether a lender will allow me to work it this way? Anyone have an opinions, suggestions, or how would you work out using your current house for rental and buying a new one? Is there a better way to keep this houae as a rental and leverage it to get the new house I want as well?. Any and all comments and opinions are welcomed and gratefully appreciated.
@Jewel Starling - If your current home is worth $155k the max for a new loan would be $124k (80% LTV if you still live there) which would give you $49k for the cash out. So not enough for your new down payment.
Hi Jewel -what suburb is your home located in?
I appreciate this info. I could probably do it with less in the cash out, or use cash added to it as well. I was really hoping there was a profitable way to to leverage the equity in my current house into a rental and a new house to live in. If I don;t pull out the equity, I could probably get a nice profit on it as a rental, and use cash down for the new home. I am just not clear on good ways to work it. thanks so much. J
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