Refinance so I can get a second home?

Refinance so I can get a second home?

Hi All,

I'm looking in investing on my second property, the problem with this is that I do not have much $ for the down payment/closing costs.

Generally the homes I'm interested in around OK areas run anywhere from roughly 300k-500k.

I spoke to my broker and he said the following:

"I will not be able to do another FHA loan for you, so if you're looking to purchase another 2 family, it would require a minimum of 10% down. The 2 family would also have to be bigger than your current 2 family in order to justify owner occupancy. Otherwise, it will be considered an investment property requiring you to put at least 25% down. On a 1 family, I can do it with as little as 5% down."

I clearly do not have this type of money, which is why I am considering refinancing, but even at that - i won't have much accumulated.

Does any one know other routes I can take to help me in my hunt? Unfortunately, I do not prefer private lendors


Partners / Seller Financing

I would say look at partners to put up the downpayment and give them an equity split.

Another option is seller financing, with the whole note, or at least have them hold a 2nd (seller holds 20% 2nd mortgage and bank finances 80% of the purchase as a first). To do this, you'll probably have to work with a small local bank that will allow it. Large banks / conventional financing won't allow you to finance the downpayment.

No matter what, make sure you have adequate reserves after the purchase to cover both mortgages just in case you can't rent it out for a period of time.

- Tom

Partnerships are a good option

If you are not open to private money or hard money, partnerships are a great way to go. You need to be open to creative financing to move forward and get more deals done. Give up a little bit of profit. 50% of something is better than 100% of nothing



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All great info Smiling) yes I love the seller finance strategy. Ask the seller ALWAYS if they will seller finance !! Your local credit unions are also a great source to get loans or loc lines of credit. This way you will have access to $$$ on the spot buy just writing a check and have cash is king advantage. Also find a buyer FIRST and use OPM other peoples $$ to purchase
Example. Find a buyer through many strategies with a down Pymnt. Then negotiate a SPREAD on the down with what you negotiate for a seller finance down Pymnt with your seller.
Another avenue is to use the refinance avenue IF you have equity in yours. Provided you have owned it long enough and or find a local small town bank with a no season refi policy. Good luck and do what it takes to make it happen Smiling)


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