Financing a rental

[Account Closed]

I talked to the mortgage lender who helped my wife and I buy our house, and told him I wanted to rent out my current house and buy a new one. He said that I could do so with 5% down, assuming that my wife and I qualify, i.e. can prove that we are able to make two mortgage payments. I have massive student loan debt, but since I plan to rent out one of the houses, I know we won't have trouble making the payments, assuming all goes as it should. Since I don't think we will qualify based on our combined income, is there any other option for us to get another property? We are looking to either rent out our current house or buy a rental. Thank you!

[Nuhan Demirkan]

Boyd, most lenders have overlays that will exclude the potential rental income from your current home since you are not a seasoned landlord. It usually takes 2 years to have that income included. My suggestion would be to follow Ivory's advice on owner financing. Concentrate on tired landlords. It would be difficult to get owner financing from an equity seller. They probably need the money to buy their next home. However a tired landlord likes the idea of receiving monthly income without the hassles of tenants, termites and toilets. I have purchased 4 homes using this type of financing. You can negotiate everything from interest rate to frequency of payment to payment start date. On one of the deals the seller agreed to hold off on receiving payments until I rehabbed the property and put it on the rental market. Good luck in your investing...