Hi all,
Can anyone offer any advise on how to structure finance etc on the following scenario.
My partner and I own a house outright, we mortgage this to buy another, both have increase in value a fair bit, we are able to borrow again, another separate home it to be put into our names to (adding to our equity), is there some sort of finance option that we give us a line of credit type of system were we are able to borrow to buy and sell certain amounts several times a year. Say we are given x amount in dollars based on what we currently own to borrow, we use this continually over and over in other investments without setting up new mortgages etc.
Any thoughts much appreciated.
Hi denyell
If you own your first place outright, you could probably secure a Line of Credit up to 80% of that value. You could then perhaps pay the entire price of house 2 from this loan, then get a loan against the IP, paying the cash back into your LOC. Then repeat.
Or you could just take your deposits plus costs from your LOC, and borrow 80% against house #2 (avoiding Mortgage Insurance). As house #2 increases, you could refinance, and pay back the deposit etc. into your LOC. You could (depending on servicability, equity, etc) be also buying #3 and #4 in the same way before needing to refinance….
If you were planning to sell #2 within a short period of time, then don’t get a loan against it, but use sale proceeds to pay back the LOC. This then saves getting a mortgage, but you’d want to be sure of growth because of all the ‘extra’ costs involved in purchasing and selling….
Cheers
MelMelbear,u are one seriously smart/creative cookie! If only i had the knowledge NOW that “veteran” investors have……[eh]
Misty,
A good case for thanking Steve for the forum
We can all learn from each other
Geoff
“When you can walk on water…take the boat”
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