Hi all,
I`m wondering how to proceed in purchasing an additional rental property. I am in NJ.
Over the past two years I bought two two-family houses (foreclosure and shot sale) using a mortgage loan on my residential house, which I owned outright. The loan interest rate was a little higher as I got a no-doc loan; I am not working full time.
I know the area well and it is a excellent rental location - I haven’t had any non-rented time and am doing well on the rental income.
I am looking for a third propety. I could at a stretch pay cash, but am looking at a loan.
Was wondering if anyone has any suggestions - loan against the rental properties? Anything else?
I never recommend using your personal residence to fund investment properties - at least for the long-term. You should always try to put the investment financing on the investment property. In that case, if something horrible should happen, you stand less of a chance of losing your home.
I would highly recommend shifting the loan off your home and onto your investment properties. Still pay the 20% down payment but have the investment property carry their own loan.
I think campbellsimon is right. Don’t put your home at risk; take time to strategize for better investments in the future. I know some mortgage companies that have been cooperative and generous in giving advice; they actually gave me a solution on a flexible rate I can afford.