Quote from @Brad S.:
Quote from @Elina Aske:
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First of all Congratulations on your current rental, those are great #'s, especially on just 1 property! I realize you bought it in 2013, but even so, we don't see anything close to those #'s in decent areas near me. And, I'm curious as to your potential deals (300-450k @ 4k/mth cf). Are those properties in good B or better areas or are they multi-families. ...just curious
Anyway, since you have converted your primary into a rental, do you own a new primary home? Is there equity in that? Or do you have only the $200k equity in your rental?
Either way, I'd say that a HELOC sounds like the way to go. I would first get one on your primary (if you have one and have equity). For that route, I just heard that there are no-income HELOC's available for owner occupied homes, up to $250k (up to 90% ltv I think). But, I am not sure which banks/lenders do them in your area. You can also see if there are any no-income HELOC's available for non-owner occ. A little harder to find, but might be possible.
Otherwise (if you have no primary or HELOCs available), you would need to do a cashout refi (dscr) on your rental. I'm getting quoted a little over 5% on one of mine right now, which isn't too bad. Just work out the #'s based on both your current rental and your proposed rental, to average out the expenses and cashflow. It would probably be worth it with the #'s you presented.
Hi Brad, thank you! My potential deals are in a different area, decent area for rentals in Bowie MD, which I've noticed prices going up. The purchase prices are now a little too high for me in DC, where my current property is located, so I've been looking elsewhere like in MD. The no-income HELOC sounds good but I don't own a primary:-(
5% is not too bad. I am getting quoted higher than 6% for DSCR (750 credit score), but I also haven't shopped around much. Ideally, I prefer to do a separate DSCR loan for the new property but due to the lack of cash for a down payment, I may have to trade my low interest mortgage (3% FHA) for a cash out refi. I'm not too sure about giving up my 3% int. mortgage for a 7%, but if it's the only way to scale, I'm having to consider it. You're right, the numbers would need to balance out and make sense to make a move like this one. Happy to hear more tips if you have any, and glad to share any info that could be useful.
