How to buy your second investment property while living in your first.

[Wayne Woodson]

I bought my first property last year and am now looking to do a HELOC and buy my second investment property. I donlt have much equity and houses are expensive AF here in Nashville. My question is how do I buy my second property while living in the first one? Do I need to move to an apartment and rent out the first one or just try to find one that is dirt cheap? I am sort of stumped as to what to do next.

[Denis Ponder]

Quote from @Wayne Woodson:

Quote from @Denis Ponder:

To clarify, did you buy your first property and it was your primary residence?  Or was it your first investment property?  The statement "How to buy your second investment property" implies you have a first investment property.  So just trying to make sure I understand the situation.

It depends on your goals. I would suggest a house hack, if you can. You can get another primary loan at 3.5% - 5% down, have help with the mortgage by renting the other units, or bedrooms if you want to go that route, rent out the first house, and be set. This is all assuming you have the income, reserves, capital, and DTI to support this route in addition to market rent being high enough to cover you.

Thanks for the reply. The first property is my primary residence on a FHA loan. I would like to rent out the first home if possible.

Do you have much capital? If not, be patient and build that up. From there, you can purchase the next home and rent your current house out. Most lenders give you 75% credit on the rental towards your DTI to offset the expense a bit. If you can house hack, I would go that route for sure.