Collateral
I've bought 3 sf rental homes this year. All have positive cash flow, but not enough equity to cash out for another investment. I really want to attempt to purchase 1-2 small apt bldgs. Could I use the 3 sfh as collateral or will they only benefit me if I can use the equity?
Thanks for any advice.
I would ask your banker about using them as collaterial (which would probably be your best option because your interest would probably be less.)
You could also take 2nd mortages against the houses up to 100% to get into the apt complexes, but then your getting into high interest and dangerous waters.
Though anything is possible with a willing seller, it is really the equity that will make a difference. Hence, if you want to use the 3 as a tool to get a small apartment building you will need to either trade or somehow use the little equity you have to win over the seller.
A conventional lender will look at the numbers, and from what you wrote, they will not be interested.
John
[addsig]
i have a similar question,
i have 2 condo`s with combined equity of 200k if sold. however i am making money on them and want to keep them.
i have come across several 5+ apt buildings that will cash flow nicely.
however i dont have the 25% down
will lender cross collateral the down payment?
thanks
kj