1st investment property financing

[Joshua Telles]

Hello everyone! 

First time posting and getting into the investment scene, I currently have a single family home that was my previous primary, and looking into purchasing my 1st true investment property, trying to find some advice on the financial aspect of the purchase, here's my scenario;

Currently going through pre-approval with the builder and I do have liquid assets enough to cover the downpayment for the property (40k) but I do have a car note (41k, 800 monthly, extra 500 to principal monthly) and a Patio upgrade (25k no interest till March 2025).

I'm unsure if route A) Payoff the car note, and patio with liquid.... and do a 2nd mortgage on the single family (40-50k) for the downpayment on the investment property, or B) just use the liquid to pay for the downpayment and ride out the car note and patio till when its due.

Had a rough quote on the 2nd mortgage which would be 500 monthly, and I guess a follow up question would be; If going route (A) would I need to get the 2nd mortgage before or after pre-approval from the builder? When should I do the 2nd mortgage route for future investments?

Thank you again everyone and I'm excited to be a part of this group! Trying to see financial freedom! 

[Ty Coutts]

Hi Joshua,

I recommend leveraging financing options for your investment property purchase. Using a second mortgage or a Home Equity Line of Credit (HELOC) on your single-family home can provide the needed funds for the down payment while preserving your liquid assets. This strategy can enhance your investment portfolio without depleting your savings. Secure pre-approval for the second mortgage or HELOC before committing to the builder to ensure a smooth transaction. Financing can also offer potential tax benefits and help maintain liquidity for future investment opportunities. Feel free to reach out if you have any other questions, want to discuss, or would like to get your financing started!

[Timothy G Dunson]

Quote from @Joshua Telles:

Hello everyone! 

First time posting and getting into the investment scene, I currently have a single family home that was my previous primary, and looking into purchasing my 1st true investment property, trying to find some advice on the financial aspect of the purchase, here's my scenario;

Currently going through pre-approval with the builder and I do have liquid assets enough to cover the downpayment for the property (40k) but I do have a car note (41k, 800 monthly, extra 500 to principal monthly) and a Patio upgrade (25k no interest till March 2025).

I'm unsure if route A) Payoff the car note, and patio with liquid.... and do a 2nd mortgage on the single family (40-50k) for the downpayment on the investment property, or B) just use the liquid to pay for the downpayment and ride out the car note and patio till when its due.

Had a rough quote on the 2nd mortgage which would be 500 monthly, and I guess a follow up question would be; If going route (A) would I need to get the 2nd mortgage before or after pre-approval from the builder? When should I do the 2nd mortgage route for future investments?

Thank you again everyone and I'm excited to be a part of this group! Trying to see financial freedom! 

I'm a bit confused. Are you building your investment property?

[Joshua Telles]

Quote from @Timothy G Dunson:

Quote from @Joshua Telles:

Hello everyone! 

First time posting and getting into the investment scene, I currently have a single family home that was my previous primary, and looking into purchasing my 1st true investment property, trying to find some advice on the financial aspect of the purchase, here's my scenario;

Currently going through pre-approval with the builder and I do have liquid assets enough to cover the downpayment for the property (40k) but I do have a car note (41k, 800 monthly, extra 500 to principal monthly) and a Patio upgrade (25k no interest till March 2025).

I'm unsure if route A) Payoff the car note, and patio with liquid.... and do a 2nd mortgage on the single family (40-50k) for the downpayment on the investment property, or B) just use the liquid to pay for the downpayment and ride out the car note and patio till when its due.

Had a rough quote on the 2nd mortgage which would be 500 monthly, and I guess a follow up question would be; If going route (A) would I need to get the 2nd mortgage before or after pre-approval from the builder? When should I do the 2nd mortgage route for future investments?

Thank you again everyone and I'm excited to be a part of this group! Trying to see financial freedom! 

I'm a bit confused. Are you building your investment property?

Yes, currently there are new builds going for 30k off, with builder buying down points, and covering a portion of closing costs. The first loan officer offered a 7.8 on a DSCR, but the builder is able to do a 5.8 with mentioned incentives.

[Charles Holder]

Quote from @Joshua Telles:

Quote from @Timothy G Dunson:

Quote from @Joshua Telles:

Hello everyone! 

First time posting and getting into the investment scene, I currently have a single family home that was my previous primary, and looking into purchasing my 1st true investment property, trying to find some advice on the financial aspect of the purchase, here's my scenario;

Currently going through pre-approval with the builder and I do have liquid assets enough to cover the downpayment for the property (40k) but I do have a car note (41k, 800 monthly, extra 500 to principal monthly) and a Patio upgrade (25k no interest till March 2025).

I'm unsure if route A) Payoff the car note, and patio with liquid.... and do a 2nd mortgage on the single family (40-50k) for the downpayment on the investment property, or B) just use the liquid to pay for the downpayment and ride out the car note and patio till when its due.

Had a rough quote on the 2nd mortgage which would be 500 monthly, and I guess a follow up question would be; If going route (A) would I need to get the 2nd mortgage before or after pre-approval from the builder? When should I do the 2nd mortgage route for future investments?

Thank you again everyone and I'm excited to be a part of this group! Trying to see financial freedom! 

I'm a bit confused. Are you building your investment property?

Yes, currently there are new builds going for 30k off, with builder buying down points, and covering a portion of closing costs. The first loan officer offered a 7.8 on a DSCR, but the builder is able to do a 5.8 with mentioned incentives.

 double check with builder. They give much more incentives for occupied vs non owner occupied.  Make sure your not assuming anything and coming up short.