How to Use 1st property equity to fund 2nd deal

[Steven Horvath]

Hey guys. i have 1 rental property that has 25% equity, about 25k realistically. I know i cant do a cashout refi, however is there a way i can utilize this to fund a 2nd property? how would i be able to use it with a private lender to make them feel more secure about a loan on a new property?
I know i might not have enough equity to use it yet, just wondering what the possibilies were. Thanks!
Steven

[Bill Gulley]

Hi, Absolutely! Especially with a private lender. Simply do a second on your existing property and a first on the property acquired. Or, a first on the new property and on your security agreement (deed of trust or mortgage) list the old property together with the new one. You'll have two legal descriptions on one deed of trust, but you'll have two filing fees in many areas. If you pledge the old property with the nee one, be sure that you have a release amount for the old property or for both. This will allow the older property to be released as collateral after XX dollars have been paid. That way you can seel the old property without having to payoff the entire loan if the lender was in the mood to require it! This is also possible with conventional lenders. Bill