Buying a second property

[Nathan Doherty]

Hi everyone, I just closed on my first property and I’m already looking for ways to get my next one. I bought my property with a 203k loan and will have about 20k in equity once the work is complete. I’ve considered many strategies for obtaInIng my next property which I’d like to be a 2-4 unit multi family. I was thinking about using a heloc or equity loan as funds for the down payment on the next one but I am worried that I’ll have a hard time getting a mortgage on a second property due to my low military income of about 45k annually. Any advice or insight is appreciated!

[Milton Rivera]

@Nathan Doherty

What is the plan for the first property?  If you are going to keep it as a rental, the key is for that property to be cash flow positive.  In essence, the property will be considered as additional income.  The lender will most likely look for you to have a reserve fund (say three months of mortgage).  They will also take about 80% of the revenue from the rental (the remaining 20% will be considered vacancy).  I recommend calling the bank and/or a broker to see what other tips they could provide.