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The answer should be pretty obvious to someone in this industry for any length of time.
-Just make sure your rental income is greater than your expenses no matter how many mortgages you want to take out.
-Always calculate whether your leverage is positive or negative
-Since your a newb at it, make sure you have at least 3 months of expenses saved up for vacancies, evictions and other unforseen costs.
And, of course, don't buy more than you can handle. Since you don't currently own a house you HAVE to finance a property as a primary residence. Do so, and in a year start your plan. That way you get an idea of how much maintenance expenses cost when owning a home, this will help you better figure the expeses of the home when rented.
Hey Greg, so one cannot purchase a home as an investment property (without occupying it) without owning a primary residence? How does that work?
You can rent and get a loan on a house as a "2nd home", or investment property. I don't think it's that uncommon.
This thread is interesting because I'm always going to my mortgage broker to ask her these kinds of questions . . . instead of the other way around. I think maybe I'm just not following the OP's inquiry. From a mortgage standpoint I'm sure she knows how to finance multiple properties.
If there's one thing my mortgage broker has taught me, it's that each client's situation in unique and it's important to find the right mortgage product for that person's situation. Sometimes there's many options but maybe only one or two that are really practical for that individual.
For me personally, holding multiple rental properties at the same time wouldn't be my cup 'o tea - too many headaches (unless you've got a couple of great property managers lined up). I'd rather invest in commercial or raw land.
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Originally Posted by Gretchen B
You can rent and get a loan on a house as a "2nd home", or investment property. I don't think it's that uncommon.
This thread is interesting because I'm always going to my mortgage broker to ask her these kinds of questions . . . instead of the other way around. I think maybe I'm just not following the OP's inquiry. From a mortgage standpoint I'm sure she knows how to finance multiple properties.
If there's one thing my mortgage broker has taught me, it's that each client's situation in unique and it's important to find the right mortgage product for that person's situation. Sometimes there's many options but maybe only one or two that are really practical for that individual.
For me personally, holding multiple rental properties at the same time wouldn't be my cup 'o tea - too many headaches (unless you've got a couple of great property managers lined up). I'd rather invest in commercial or raw land.
A renter can purchase and finance an investment property, but not a second home. There is not a lender in business that would lend money to someone for a vacation home when they don't own a primary residence. Also it will be difficult if not impossible to purchase an investment property as a first time home buyer.
Lots of good information here already. The only thing I would add that I've seen in multiple investments is your debt to income can get too high if you're not careful. Oh yea, and either look into 1031 for the investments (non-primary) or set them up in a corporation for asset protection. I'm certain there are others more knowledgable on these subjects. Just my 2 cents toward your research and to maybe spark some additional responses.
I also had a purportedly wise investor tell me once that a "review every two (years)" is a must.
If you don't have a high FICO and sufficient cash on hand at the moment, use low rate balance transfers from credit cards to purchase the property outright, and then mortgage the property @ 75-80% LTV when you do qualify. I used this method once in 2006 for a $137k townhouse purchase, and it worked out perfectly. This is only risky if you aren't able to pay the balance transfer(s) off before intro rate expiration, as rates tend to default considerably higher.
I think this is a big no-no with a reputable lender.
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I think maybe I'm just not following the OP's inquiry. From a mortgage standpoint I'm sure she knows how to finance multiple properties.
