Is this Best my best Option? Sell my house to invest?

[Jacob Flores]

I had a real estate agent come and look at my house. I owe $140,000 on the house and real estate agent said well can sell our house for $260,000. I have only been in the house 5 years and property keeps increasing in value. My plan is to sell my current house and rent a apartment so I can purchase some rental properties. I don't currently have any rental properties and don't have much in savings to put down 20 percent for home loan. Just wanted to see if this sounds like a good option for my family.

[Melissa Kirchhoff]

@Jacob Flores - A lot more information is needed. I'm not a fan of renting at all, personally, but I would say what is your mortgage payment versus what is rent? If it's similar, why do it? Do you mean just rent short term so you can buy another property?

Here's some things I'd consider with the info you gave me:

1. Can I cash out refi? What would the payments be, and could I use that cash out to put money down on another property, will you qualify for another mortgage with that refi? What would the payments be if you did?

2. If you do sell, what could you do with that ~100k in equity? Could you buy for cash, or buy something bigger and use that as part of downpayment/repairs?

If you go that route, I would consider house hacking versus renting. Buy something 2+ units and live in one and rent out the other and live free and clear (or have a small payment) and continue saving to repeat the process.

Also, realize that nowadays you don't need 20% down for most loans, if it's owner occupied. There's many different loans out there with low money down, so if you have a trusted lender, discuss some of your options with them. If you don't, interview some and find one, when you have someone good and creative, they can be worth their weight in gold in helping give you numbers for different options, then you have some facts to base your decision off of!