2nd property advice...

[Cari Childers]

Hi friends,

Hope you’re all well during COVID. 
I’m looking to make my next move and need your advice.

My 1st and only property I’ve owned since 2012 I bought for 120,000 in Downtown Orlando Fl, I owe 76,000.  It’s rented for $1450 and my monthly rent is 850.   My annual expenses average around 3000. Interest rate is 3.65. It’s a 1950s Florida block style home.  I’ve updated windows, doors, instant hot water heater, roof, ac, bathroom, and flooring. It’s in good shape and doesn’t need much.  I’d like to keep it.  Zillow says it’s worth 209,000 now. 

I’m thinking of refinancing to take the  equity out for my next property.  I have about $30,000 saved.  I live with a friend and rent out a room for $400 so my monthly expenses are low.  My question is:  how much do you think I should take out of my equity for my next property?  Should I take out as much as I can or try to keep the mortgage as low as possible?  Since the Orlando property is my first property the loan is conventional, will there be a higher interest rate if I tell them a renter is now in place?    Is it possible to refinance and then see how much I can prequalify for my next property with the same lender?  Any lenders you recommend for refinance and prequalifying for my next loan? I have Wells Fargo for my first loan and I’m not super impressed! 

I’m looking into buying a duplex or triplex for my next property - I’ll be owner occupied.  

Newbie with a lot of questions.  Thanks for any advice you can offer :)  would love to meet up with any south Florida investors when we are all allowed outside lol! 

[Kelsey T.]

Hi @Cari Childers, great post, I'm very interested in seeing everyone's advice. My husband and I have used Chase once and Wells Fargo twice and have not been impressed with either. For our next purchase we are looking into local banks, and even in the preliminary stages, they have been great to work with and it sounds like they can be more flexible than the big banks. 

What is the price range you are interested in? If you are looking into a duplex or triplex, have you run the numbers on house hacking with an FHA loan?

Also, zillow is pretty notorious for being inaccurate with estimating value, I would look at homes recently sold in the area (you can find that info on a website like realtor.com) that are similar in bed/bath, size, and condition to get a better idea. 

Good luck, I'm excited for you!