I am some questions to ask you hope you can share with me on this? I have a 2nd equity on my home at about $80k and cash of about 30k. How do I go about getting a home to purchase and rent out. I was thinking of getting either a condo in the early $100s and paying either cash for it, rent it out and then sell it later hopefully with a little profit. How then do I as the buyer able to acquire 1, 2, 3, 4 properties later on ? Do banks allow multiple loans later on?
I know that single homes are better than Condos but I like condos for now at least for now.
I buy low for cash, rehab, put a renter in, and then do an 80% cash-out refi based on the higher “fixed up” appraisal. I usually get all or most my cash back (the most that I’m actually out of pocket for a property is less than $2700) and have a strong cashflow.
My most expensive property was less than $65K, appraised after fix up for $77,900…and rents for $850.
When the dus settled, I’m out of pocket for $2580, have over $15,500 in equity, have a $300 a month PCF, and an annual cash-on-cash return approaching 140%…
It works for me…
Keith
If you are buying rehab properties then the above strategy works well.
However, if your properties are move-in condition then here’s what I suggest for you.
Put between 20-30% downpayments on the homes (enough to cashflow) and finance the remaining 70-80%. You’ll get great terms on your mortgages at that LTV and will have the cash free to purchase the rest of your properties.
If you purchase the first home cash then you are all out of money for 6 months until you can cashout refi. (some lenders do no seasoning, but those are more difficult to attain). If you have extra cash and want to pay off some of your houses then you can go ahead and do it. This allows you to acquire 3-4 homes with the cash you have available and hopefully at least break even if not cash flow so they will sustain themselves.
If you have questions or want pricing for your possible loan payments feel free to contact me.
Sounds like you need an Interest Only program with No Escrow to Max out your earning potential on a Investment Property. No Escrow and Interest Only loans are the more conventional way’s that Investors fund their loans especially when they have intentions on selling the property in 3 to 5 years
Carol Wilson
Nationwide Loan Consultant
Starlite Funding