How to move up from wholly owned properties to a 50% leverage position?

[Dawn Raye Cain]

Hi there!

I have fully owned and successfully rented 3 properties in Texas for 2 years.

I have heard advice all the way from "no loans!" to "borrow everything possible!"

I have decided that I now want to try adding property such that I keep 50% equity overall. 

I know the area of southwest Florida that I want to buy in and have been studying it. I have also read quite a lot about real estate loans. But nothing has been clear about "using my equity".

The choices I can see are:

1)Sell one TX house, 1031 the proceeds into 1/2 the price of 2 different houses and apply for 2 different loans. I would then supply my 2 yrs IRS returns which only have investment income from my rentals on them. Better make sure that the new houses are ready to rent soon! Would the banks say "Hey, you just sold one of these houses, we cannot use this entire amount as income."?

2)Take a loan against 1 of the TX houses (maybe 70/80% of its value, maybe 4% interest-if it's 8% use less value) use this to make 2 down payments on 2 FL houses (hopefully short sales or motivated seller in good condition) and get them rented to cover the loans and expenses and maybe a small cash flow.

3)Maybe try to buy a Home Path Investor house also/instead (but I am wondering if they tend to be overpriced)

I recently got a sales job so I will not have to be completely dependent on my rental income (but it sure has been fun!)

What do I say/ not say to the Credit Union when I go to pre-qualify for a loan?

Thanks so much!