Advice on Funding Strategy to Aquire new SFH Rental Properties

[Tom Giles]

I am 61 and preparing for life after retirement beginning this summer. I will have 2 pensions and some rental income that my wife and I should be able to comfortably live on without immediately drawing SS when I turn 62. I would like to acquire several more SFHs in the $80-120K range to rehab and turn into rentals. My immediate regional focus will be NW FL between Panama City and Pensacola.

With the loss of earned income after retirement, I do not think I can immediately qualify for a conventional loan for investment property. I do however have about $180K in equity on three homes, neither of the three are my primary residence. I also have $50K in cash.

I am thinking that I could obtain HELOCs on a portion of my equity to add with my cash to make a cash offer and purchase of my first SFH after retirement. After I rehab the property and get a lease, I should then be able to qualify for a conventional loan on that property to free up my HELOC and some of my cash for another purchase.

Is this a feasible and sound strategy?

[Jerry Padilla]

@Tom Giles  as @Terry Lewis said it would be a good idea to get all your financing in order now. It looks like you have four properties now. If I were you I would do cash out refinancing on these homes over a HELOC. They are fixed rate and will keep you at one mortgage for each property. I would also purchase the new investment properties while you have you current job and all the assets to meet the reserve requirements. You can consider 75 percent of the rental income on the new purchases with Fannie Mae.