Own primary residence, looking to buy first rental
*asking for a friend*
I've recently become a licensed agent and I am working with a long term friend to help begin his path into real estate investing with his first rental. Now that I have my license we have began searching for a deal. He currently owns his primary residence which he took out a 115k loan on 2 years ago. He owes 70k left on the loan and has 50k in cash reserves to invest. House has recently been appraised for 130k. Our question is... what's our best option to fund the deal? Between the cash and the equity in his primary residence which would be our best route?
Ideally he wants to leverage the equity in his primary, but he does not want to end up with a higher note.
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- Real Estate Broker
- Cody, WY
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Is he willing to live in a smaller unit? If he's owned his primary residence for two years, he could qualify to purchase another home using an FHA loan. He could buy up to four units. He lives in one, rents the other three out, and rents out his singe-family home. That gives him four rentals. Two years later, he can rinse and repeat.
Even if he wants a larger space, he could find a larger, nicer duplex that would give him a place to live and one more rental.
- Nathan Gesner
