Owner Financing vs. Renting

[Patrick Howell]

My wife and I are looking to acquire our 2nd investment property. We purchased our first investment property (rental) about a year ago with the goal of holding everything we acquire long term to supplement our retirement goals. We set a goal of acquiring one rental property a year and setting each one up on a 15 yr note, so that one property would become "free and clear" every year after we turned 40 (currently 25).

We have an opportunity to buy a second property for 10k (needs 11k in repairs) that comps for 40-50k. If we decided to rent this out, we would be able to leverage the equity in the property to purchase the next one and so on...... (set up a successive purchasing system). But the more and more I read about offering owner financing the more attractive it seems. I could very easily put this on a 15yr note at 8% with a purchase of 45k. That would roughly bring $430 a month for 15yrs totaling around 77k! Not to mention, this would free up the day to day headaches with tenants etc....

But, at the end of the day owner financing takes away the opportunity to leverage equity correct? (i.e. I wouldn't be able to get a line of credit on this property so I could move on to the next one...) Just wanted to hear everyone's thoughts.

Cheers, Patrick