Will This Work? 100K Into A Rental Property And Pay For Mortage Out Of Rents?
I have a house that I put 100k down on and am looking ot get 100-110k back from. Instead of going and purchasing a new house I think that I should put the $ into a rental property (multi-unit) and then use the rents to pay for a primary residence in the 120-140k range. What do you think?
I did find one triplex (and I haven't looked too hard) that would NOI including vacancy rate at $16252.00 a year or $1354.00 a month. A house at 5% and 120k would leave me a $5 a month mortage payment and carry the $508.00 note on the triplex.
Would I be able to 1031 exchange this in the future?
Can you see any error in my logic?
<IMG SRC="images/forum/smilies/icon_rolleyes.gif"> [ Edited by Stockpro99 on Date 07/07/2003 ]
Are there any mortgage brokers that would be able to check the logic in this?
A lot will depend upon how long have you owned the property that you want to take cash out of? And what will the LTV be on it?
I am thinking that the property in question (the rental property) is 150k and that there would remain a note on it for 50k.
I was thinking that I could then borrow 70-80% of my equity if indeed the property is valued at 150K (and judging from a 11.5% return NOI I would think this would be accurate?)