Own One rental property ready to scale

[Abraham Shamosh]

HI All,

I currently own one rental property with about $70k in equity on the home since the value increased. That being said ive spent most of my savings on buying that property (down payment & closing cost) and im struggling with figuring out how to finance the next one as I dont have another 20% down payment ready and my DTI wont qualify.

Any advice would be appreciated Thanks!!

[David Bilandzija]

@Abraham Shamosh You have a historically low interest rate on your investment property. Best not to disturb it with a cash out refinance 1st mortgage but you still need access to the equity. That leaves you with a couple of options, 1) HELOC, home equity line of credit 2) 2nd mortgage, cash out refinance. Both of these options are going to carry a high interest rate but they'll help you come up with the cash needed for your next down payment.

A DSCR loan would be your best option for financing your next acquisition. DSCR loans ignore personal income/DTI and will qualify you based on credit and experience. You have the experience and I'm assuming your credit is good. The only other requirement is that you have skin in the game i.e. down payment for the acquisition.