A couple difficult questions

[Mike Shaw]

Hey guys, I wanted to ask a couple difficult questions that have been stuck on my mind. Apologies if these have been answered somewhere already (they probably have)

1. Say I own a house outright, and then use that equity to buy another home, with financing. As both houses are renting, I'm paying down the mortgage on home #2 at 2x rate. Say the note is 1.5k a month, I'm consistently putting down 3k. After 6 months of that, suddenly both houses go vacant for a period of 2 months (worst case). If I don't make any payments during this time, are all my previous payments taken into consideration? Am I up to date or behind if I start paying 3k again 2 months later? Also, if that is my payment plan, does a 30 year fixed still make the most sense?

2. For someone who has assets but isn't very liquid, what is the best way to find homes for buy and hold in my area (Austin TX)? Realtor.com and Loopnet.com are okay, but was hoping someone has a better option. 

All markets are cycles. Where do you believe the Austin housing market cycle is? What zip codes would you recommend investing in? What cap rate should I expect on a Buy and Hold? I've heard the 78704 but would love to get more info.

Sorry for the long questions on my first post, hopefully someone has some answers!

[Jason Hirko]

Hi Mike, to answer your first question: when you pay more than your monthly mortgage amount, that difference is applied directly to the princpal, therefore you would need to keep making the same monthly payment - the only difference is you'll have fewer payments to make and your interest cost goes down. You could at that point refinance, or if you have a good relationship with your lender, ask them to reammortize and give you a two month extension. Not all will do it, but some will.