Rental Property Financing

[Jake Hill]

Ok here’s my situation -

Bought a house 3 years ago with the intention of flipping and then selling with in 4-5 years. We bought when interest rates were low (3%) and have a relatively inexpensive mortgage payment. Rent in the area has increased and we could have good cash flow so now I plan to make this a rental.

My question is what is the best approach for starting the next property? Best way to leverage the equity in the rental? Equity is 80-100k, haven't got a formal appraisal yet. Or do I go the private money route or conventional on the next rental? Next house I am looking to BRRRR.

Thanks in advance!

[J. Mitchell Bernier]

Hey Jake, 

Contact the company that has your mortgage and see if they offer a HELOC product and get that. If you have 80K equity they may give you a 60K line of credit and wont effect your current loan. Wouldn't recommend you doing a cash out right now if you can avoid it.

There are some banks that will do a 2nd mortgage with a HELOC, but try who has the mortgage first. They will always give you a better rate and more money then a bank in a 2nd lien position

Good Luck!