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Updated about 8 years ago on . Most recent reply

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110
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18
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Valerie King
  • Rental Property Investor
  • Mount Clemens, MI
18
Votes |
110
Posts

How Long Before You Can Take Out Another Loan

Valerie King
  • Rental Property Investor
  • Mount Clemens, MI
Posted

Here's my plan. My first home will be a multifamily residence (duplex to quad) with a loan in my name. I live there for the two-year minimum. (Doesn't it officially count as an income property after that?) Then my boyfriend and I get married. I move out of that home and we move into a multifamily residence that he buys with a loan in his name. 

At that point, we've taken advantage of the low money down option that owner-occupied residences get. But then what? Whether we stay with the two multifamily properties and just get our own single family home, or we move into another multifamily residence, how will we get a loan if we both still have loans in our names? I guess I'm asking, once I've occupied my multifamily for two years and we've occupied his multifamily for two years, how do we move on from there? Is it even possible to take out more loans in our own names without having the initial loans paid off? 

I don't really want to go too far into investment. I think I'd be fine with us keeping our W2 jobs and having two rental properties on the side. Just wondering how we'll get our actual single family home once we've invested in the first two multi-families.

Most Popular Reply

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Andrew Postell
Lender
Pro Member
#1 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
  • Lender
  • Fort Worth, TX
6,316
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7,926
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Andrew Postell
Lender
Pro Member
#1 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
  • Lender
  • Fort Worth, TX
Replied

@Valerie King many investors keep their jobs and use rental income to supplement their income.  After renting a home for 30 years you'll not only have taken in a lot of income from rents but then the mortgage is paid off entirely and you can sell the house for a bunch of money or just make even more rental income.  Keep that W2 job.  

Also, as long as you live in a property you can always take advantage of a low downpayment option. FHA loans (the loans with 3.5% down) do put a limit of one FHA loan in one geographical commuting area but you can have as many Conventional loans as you want. Admittedly, to buy and live in a duplex with a conventional loan it's 15% down. But as an investment property (meaning you won't live in it) it's 25% down. So you still get an advantage by living in the property with a lower down payment if you decide to go that route. You don't have to pay any loans off if you don't want to. As you accumulate properties you will need to have more and more "reserve" money. Reserve money is money left over after you buy a home (they basically don't want you to be broke once you buy your 2nd, 3rd, and so forth homes) but these are good problems to have. If you are rocking and rolling with 8 properties needing reserve money is a good thing.

I hope this helps but feel free to ask any additional questions.  Thanks!

  • Andrew Postell
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