Advice about acquiring a second property!

[Steven Bommarito]

Hello,I'm Steve. I'm from St. Louis. I have a question. Wanting to get into real estate and have a unique opportunity. A friend of mine bought my two family for me in cash and I owe him. He bought it so I could compete with cash buyers and not spend more then I wanted using an fha loan. I'm planning on using a Heloc to pay him back as I have rehabilitated the property and have the second unit rented. My question is what route to take if I want another building as a rental or flip while having to pay on the heloc? If I don't have money saved who can help me get going? Thanks in advance

[Thomas Guertin]

I wouldn't do a HELOC, I would go for an 80% loan to value mortgage. That way you have a fixed payment every month and build the equity by paying down the mortgage. You should get the second unit rented so that you have the leases to hand to the bank so that you can get the financing.

Personally, I wouldn't worry about the second property until you have this one settled with tenants (that pay) and you have paid your friend back.  You may be able to use your friend again if he/she feels comfortable that you can get their money back to them.

Tom