Hi Everyone,
This is my first post on BP, but I have been an avid reader for some time. I have, what I think, is a pretty simple question. But first, here is my situation:
I am very new to the real estate investing world. I spent a few years reading and listening to podcasts, but just recently started buying. I am a full-time teacher in SD, the lowest paying state in the US. However, I have maintained some side jobs to allow me to save a bit for investing purposes. So far I have a SFH that I bought for $60,000. I put 20% down so the loan is right around $48,000 right now. I am confident the property would appraise for $70,000, theoretically giving me about $22,000 in equity. This property cash flows $280/month.
I also have a mobile home that I purchased with cash for $12,500. This property cash flows $500/month. I believe it would probably appraise for $10k.
So here are my questions:
1. Can I simply go to a bank and show them this information, get the property(ies) appraised and then request a Line of Credit from the equity I currently have in order to use as a down payment on another property? Is there more to it than that? Or what does that process look like? The more detailed the better!!
2. Would a bank count the mobile home as equity for the purposes of the Line of Credit?
3. How much could I expect to actually receive from the equity I have? 75%? 90%? Does it depend on the lending institution?
4. If you were me, what would you do? It seems that every idea I have stems from someone else. So I always like to get opinions and ideas from others. Thanks in advance!
I know these maybe sound like some rookie questions. But, I am a rookie after all. You won't hurt my feelings. I just have never quite grasped the idea of using equity to purchase more properties.
I appreciate your feedback and advice!
Seth
