Buying my Second Property

[Alec B.]

I purchased my primary residence 1 year ago in Los Angeles. I went in with about 25% down, and made some renovations. I lived in the property's guest house and rented out the main house. The property is probably ~70% LTV now, with high CF. I recently moved out of the guest house and rented that as well, and I'm currently living at home. I'm considering a number of different options. I would like to purchase another property similar to this one, but I can probably only put around 10-12% down with the cash I have saved up right. I'm looking to purchase another SFR with a guest house (Live in GH, and rent out main home).

What are my options? Can I get approval for a conventional + PMI @10% down? (Offset 1st mortgage payment with the rents) Would it potentially make sense to put an even lower down payment (e.g. 3.5%), and buy an investment property as well as a new primary residence? Any ideas or advice would be greatly appreciated!

(Note: Not looking to refi first property, as it is financed with a 30 year mortgage @ 3.25% -- I think a HELOC could be a possibility though.)

[Harjeet Bhatti]

You need 15% down payment for investment 1 unit. PR can be with 3% down payment under conventional or 3.50% down payment under FHA. You need reserve also for all these properties so keep that reserve in calculations.