Would getting a equity loan and using it to invest in buying another house be smart?

Question

I know someone that can help me with buying a home at a good price that I could turn around and rent or sell. I would just like to know if its a good idea to take the risk of my house note going up and maybe loosing both homes.

Answer 1

You have hit the mother lode. You have had some good advice from the other two. Taking equity out of your home is the way to go in purchasing an investment property.

Make sure you have the correct numbers, Take an extra day to ensure the numbers are correct on your purchase. You don't want to make a mistake, because Uh oh will not do.

Now if this is your first property you are buying, you have to decide if this will be a flipper or a keeper for a rental. You have to make this decision before you make the purchase.

#1 How much will it bring if I flipped it?

#2 What rent could I get if I kept it?

#3 Would the rent cover any mortgage and how much do I have to bank?

Now I see that Steve has a plan. Mine is a bit different. I flipped my first three properties so I could have money to purchase other properties. That was my plan from the beginning and that is what I did.

Since then I now have a different plan for wealth building and cash for myself. I keep 1 house out of every three. So if you are doing 3 houses per month you will have 12 house for rentals at the end of a 12 month period. The other 2 I flip for cash so I can keep my business going without getting a mortgage each time. I have also acquired several investors now that assist me in my purchases.

The ones I keep are kept for tax advantages, as well as building wealth. They also provide an income. (Please check with your tax advisor or preparer for tax information)

After you have successfully done about 5 you should consider a corporation to protect you from personal liability and w-2 your income (Again check with your tax advisor for all tax questions)

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 2

Yes taking equity out of one home and putting it into another home is a great move. Also, make sure you take enough money out that way you can buy 2 homes. Once you have those 2 homes take the equity out of them in a year and buy 4 more homes. You are creating wealth this way. if you want to sell any of the homes you can. But it is better to rent them out at least for 2 years. This gives you credibility as an investor and then you can use the income from those homes being a part time real estate investor.

Answer 3

you have an exciting difficulty. First, stop thinking with regard to the properties as one. i'm going to be honest, i haven't been asked approximately putting a house fairness on 2 seperate properties yet i haven't heard of a bridge living house fairness. the 1st question i might ask is that if a lender might desire to place one living house fairness on 2 properties, my wager isn't any, besides the indisputable fact that that is in basic terms a wager. If a lender is unwilling to accomplish that, then your going to might desire to take a loan out on the living house which you're feeling is incredibly easily worth the main. a house fairness isn't your ultimate approach right here, many lenders are shutting down the lines of credit and their lending standards have tightened dramatically. you will possibly desire to have over a seven-hundred credit to get a great cost or maybe that may no longer certain. whether you get authorized for a HELOC, I wouldnt do it except you come across one that could has somewhat or lock in characteristic. working example, say you get a heloc and choose 50k, as quickly as the draw is made, you call the lender and that they lock the cost on the 50k allure to reserve that it does not regulate. the situation with a house fairness loan may well be which you will probable be paying a extreme 7% cost at mininum, over 2 a protracted time, so why waste money. the final guess may well be to refinance between the properties, they might desire to lend as much as 80%, possibly 80 5% by way of fact that is condo, yet you would be hit with PMI. One observe of warning, in case you won't be able to locate a lender which will positioned one loan on 2 properties, you're making get asked to refinance or positioned a house fairness on the two, in case you won't be able to swing it financially, in basic terms finance the single assets

Answer 4

Yes....First of all, make sure to make improvements, to get the most of your investment......But what kills most people flipping homes is carrying costs! MAKE SURE to have an exit plan....If you plan to sell, sell it a little bit cheaper, then what others in the same neighborhood, are selling for.......Since I don't ever rent my investments, I flip them, I can't advise you on this....Best of luck!

Answer 5

Is the market good at this time?