New to BP! Looking to do my 2nd deal and wanting advice!

[Account Closed]

Hi all! I bought my first condo when i was 22 with my mom as a cosigner. I have that property rented in Colorado and am now looking to buy my first single family with rental potential. 

My idea is to buy a single family home with a finished basement and some sort of other ADU (finished garage, separate rental on site, etc.) and rent out the basement/rental/garage while i live in the main property. I'm look in a touristy college town with approximately $200K people so I think the rental market will be good. Right now the properties that fit this criteria are between $350-$499K (~$176 per sq/ft).

I have $40K (liquid) in savings and I'm *thinking* that what i want/need is a conventional loan with 3-10% down. However, I don't really want to touch my $40K. I'd prefer to keep it as a cushion as it is my only savings. I'm thinking about a HELOC on my Colorado condo for $70K for the 3-10% down payment plus a little extra for renovations.

I bought my Colorado condo 11 years ago for $140K and now it is appraising at ~$270K. 

THANK YOU!!!

[Jared Bouzek]

Hi @Account Closed. I didn't really see a direct question in your post. What you're suggesting is definitely doable if you go about it the right way. Whether you choose to do a HELOC or a cash-out refinance on your condo is partly personal preference and partly strategy. You will want to be clear with your loan officer on what you are doing, so that you're taking everything into account in your DTI and they should be able to walk you through the pros/cons of HELOC vs cash-out refi. You do have access to HomeReady (3% down) if you meet income limits, but you cannot use Home Possible because you already own property. You didn't say where you're specifically looking to buy, but I suggest you connect with a loan officer licensed in the state you're looking to buy in who will do the low down payment options for you.

Let me know if I can answer any questions for you.