i have a 1st and 2nd mortgage on my home but i have enough equity to purchase or place a down payment on a second home. i’m looking at refi the 2nd mortgage for a line of credit but i’m being told that is not a good idea because if something goes wrong with the second home i could lose my primary home. am i better off getting a separate loan for the investment property?
can i use my homes equity to purchase investment property?
21
Mar
frediwhite@verizon.net
March 21, 2010 at 8:10 pm
I note investment advisors right now are urging extreme caution; this is not a good moment in history to take on debt, assuming you could find a lender. Prices are declining, so this is a good time to shed debt instead.
Landlord
March 21, 2010 at 8:29 pm
Unless you can afford 25% down out of your pocket you have no business investing….you do not have anything to invest.
This is a really bad idea, never invest your primary residence.
spartanguy318
March 21, 2010 at 9:14 pm
Never leverage other properties to buy additional properties. If one property deal goes bad you stand to loose your entire “empire”. Leveraging your house to buy investment property is an especially bad idea in my opinion.
I saw a comment that if you don’t have 25% to put down don’t investment…maybe yes maybe no. In this environment there are a lot of deals out there, and there are some properties that can still cash flow at 100% financing. 90% of the success in real estate investment starts with the negotiation. I think the best advise is take a look at what you absorb if something goes horribly wrong. Always look to the worst case scenario and make sure the numbers work at that level (i.e you buy a house to rent and…ta da!! you don’t rent it for 6 months, and when you do rent it…below market…and the roof needs replacement, and the water heater goes). Real estate is a LONG TERM investment, just like stocks, just like bonds, just like everything else. I’ve said my peace, good luck