Can I purchase investment (rental) property using equity from 2 homes?

Asked by Beaster, Rochester, NY Wed Apr 7, 2010

I lived in a duplex for 10 years before purchasing a single family home last year. I still own the duplex and rent out both sides. Between the duplex and my new house, I have ~$60k in equity. How might I harness that equity to purchase more rental property? Is it even possible? Keep in mind I would being doing this for cash flow.

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Richard’s answer
Richard Coak…, Agent, Fairport, NY
Fri Apr 9, 2010
You can purchase 2 more properties with mortgages on something like favorable terms with 10% down payments on duplexes, and $60,000 should cover you for total expenses.

If you're confident about managing 4 more units, tap your equity through a refinance or line of credit while at the same time, accelerating the mortgage paydowns of as many mortgages as possible. There is a proven and even guaranteed method for doing the latter, without having to make extra principal payments from income. Through this dual-track approach, you're building cash flow and next worth while simultaneously reducing debt, even on 4 properties.

Call me at 585.223.4449 if you'd like more info, and best wishes on your plans!
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Gerard Dunn, Agent, Chevy Chase, MD
Thu Apr 8, 2010
If you are dealing with a local lender - maybe.

You can ask the lender to BLANKET the mortgage over multiple properties. It is NOT normal and customary - especially in this over cautious market.

The banks can do this in a few different ways. You may hear the term IDOT (Indemnified Deed of Trust) that will secure the bank against your other property.

This is NOT a loan for a typical mortgage broker. Check with a local bank that also does commercial loans and see if they can help!

Good luck!

Gerry Dunn - Associate Broker
Serving Maryland, D.C. and Northern Virginia
Over 27 years
0 votes
Bob Hibbard, Agent, Penfield, NY
Thu Apr 8, 2010
Depending variables such as credit score, employment, cash flow/s, debt ratios and appraisal values of the properties you own, you may be able to to get a lender to lend you the funds. Either through a mortgage, home equity loan/s, or a line of credit, etc.. Remember most lenders will only let you borrow up to 80 or 90% of your equity, sometimes less for investment property. It sounds like you may have a good history of managing rentals. If you have a good relationship with your lender start there.
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