You have an affordable place to live, about half your mortgage payment is paid by the renter, you get to dip your toes in the investor/landlord waters, and you are in a market that should continue to appreciate in value.I recommend reading and educating yourself while saving up for the next investment.

If it's a family style single family home or multifamily unit, unfurnished, in non-core areas, the timing doesn't really matter as most likely your tenants a re locals who can relocate at any time regardless of the season. 

They also are 0% for 12 months right now, with the min payment being 1% of the balance.  

, I’m looking into doing a HELOC on my current owner-occupied duplex (live in one side) to help fund a down payment on another duplex.

My company is looking at the acquisition of a pool of first position non performing residential mortgage notes in various states.

Underwriting items for DSCR loans include appraisal, credit report, liquidity verification, borrowing entity documents, landlord insurance verification, and whereapplicable lease, verification of rent and security deposit receipt, and property management agreement.DSCR lenders should never ask you for tax returns, W-2 income, pay stubs, or company financial statements.A good DSCR lender can fund your DSCR loan in under 30 days.Pro Number 2: Loan StructureDSCR loans are generally structured as thirty year term, fixed rate and fully amortizing, with LTV up to 80%.To increase cash flow and boost DSCR to qualify for a higher LTV, you can even structure with a five or ten year interest-only period where principal payments are made over the remaining portion of the 30 year term.Most DSCR lenders can fund your loan with DSCR as low as 1.0, though 1.1 is where you will find the best terms.A few DSCR lenders specialize in no and low seasoning cash out refi for rental property investors who use the BRRR strategy.Compare this to traditional banks which generally offer lower LTV, shorter term, higher DSCR requirement, and 6 months of seasoning.Pro Number 3: ReliabilityDSCR loans are a growing component of the multi trillion dollar institutional credit market.While DSCR loan origination volume is growing fast, it struggles to satisfy the demand from institutional investors such as insurance companies, pension funds and credit funds that buy DSCR loans.For this reason, as long as DSCR loan program guidelines for subject property and borrower are met, there is a very high probability that your loan will be fundedwithout delay.Compare this to banks which may subject you to months of underwriting before ultimately rejecting your loan application for reasons unrelated to your application.Con Number 1: Strict GuidelinesThe largest and healthiest part of the DSCR loan industry is 1 to 4 unit residential investment properties in non rural markets where the As Is value and the purchase price is one hundred thousand dollars or higher, and the guarantor's credit score is 680 or higher.If an element of your transaction does not fall within program guidelines, your loan will either be declined or require an exception which can cause delay.DSCR loan program guidelines are constantly evolving to adapt to the demands of borrowers and institutional investors, and to respond to market and risk.A good DSCR lender will knowledgeably and transparently communicate program guidelines, proactively communicate to identify potential issues, and set expectations in a clear and thoughtful manner.Con Number 2: ShenanigansThe DSCR loan industry is fast growing and loosely regulated, attracting loan brokers, private lenders and salesmen who are not knowledgable about program guidelines, not expert in structuring your loan to meet your specific goals, not capable of closing your loan in a timely manner, and not truthful or transparent about loan terms.Con Number 3: Higher interest ratesGiven the demand for DSCR loans from institutional credit investors, the credit spread or risk premium has decreased, making DSCR loan interest rates from the most competitive DSCR lenders nearly the same as bank loans and conventional investment property loans.We should include an asterisk on this con because it is not always true and may not be true in the future.

You just really don't want to take this on if you can avoid it because you will automatically be in the hole with not only a non-paying tenant but the out of pocket costs of the eviction, which can be substantial.

Rates: 9% to 13% (Most Deals are 11-12%)Terms: up to 36 Months (Most Deals are 6-12 months)Fees: 2-4 points(%) of loan amount paid at closing (Most Deals are 3 points(%))Minimum Loan Amount: $50,000 (For loans less than $250,000 $2,500 minimum fee)Max Loan: 65%-70% of After Repair Value(ARV)100% Rehab Financing Available (Require 20% of purchase price down payment or cross-collateral)Closing Timeframe: 48 Hours - 3 Weeks (Most Deals are 2 Weeks)NO PRIMARY RESIDENCES, NON-OWNER OCCUPIED ONLY, BUSINESS AND COMMERCIAL USE ONLY.

As a mental exercise, can you imagine the perspective of an investor that bought a property from you just 8 months prior to that email, had his FIRST TENANT miss payments, lie about making payments, make partial payments, then ultimately skip out on four months rent?

Additionally, there's a fixed self-employment tax.Income Tax: 22% * $70K = $15.4KSelf-Employment Tax: 15.3% * $20K = $3.06KTotal Tax Due: $18.46KRemember to account for any state taxes as well.To defer taxes entirely, you could utilize a 1031 exchange, which allows you to reinvest the proceeds from the sale into a similar investment property, thus deferring the tax payment until a later date.Example #2: Long-Term Capital GainsNow, consider a scenario where you hold onto the property for over a year.Project Details:Property Cost: $70KRenovation Costs: $50KResale Price: $200KProfit: $80K ($200K – $50K – $70K)Since self-employment tax doesn't apply, you only need to calculate the long-term capital gains tax.