Hi there, new to the forum and haven't found much talk about this topic so I figured I'd ask.
As a bit of a background, I've got a rental in Hamilton that I bought 2 years ago with a nice sized down payment (60k). I've been doing a lot of research lately and am getting ready to start looking for property #2. My current property has good cash flow but after all of the research I've been reading, I could do much better with my money and other properties, so I'm going to be listing it for sale soon. Property pricing in the area has positioned me to walk away with $82-100k after all of the expenses (realtor fees, mortgage cancellation, etc...). That cash range obviously is dependent on what it actually sells for, I wouldn't let it go for less than the 82k profit mark.
Once it's sold, I'd take the money plus cash I currently have and look to buy 1-2 other properties with better cash flow and better ROI.
What I'm wondering is if my current plan makes sense, or if it's common practice in this type of situation to take out a second mortgage on the property to leverage the invested capital, market value and cash flow to use as a down payment on a second property with the additional cash I have on hand.
I see the idea of 2nd mortgages thrown around a lot, but nobody has really posted something on the best strategies of using them.
Your input is greatly appreciated!
Stu
As a bit of a background, I've got a rental in Hamilton that I bought 2 years ago with a nice sized down payment (60k). I've been doing a lot of research lately and am getting ready to start looking for property #2. My current property has good cash flow but after all of the research I've been reading, I could do much better with my money and other properties, so I'm going to be listing it for sale soon. Property pricing in the area has positioned me to walk away with $82-100k after all of the expenses (realtor fees, mortgage cancellation, etc...). That cash range obviously is dependent on what it actually sells for, I wouldn't let it go for less than the 82k profit mark.
Once it's sold, I'd take the money plus cash I currently have and look to buy 1-2 other properties with better cash flow and better ROI.
What I'm wondering is if my current plan makes sense, or if it's common practice in this type of situation to take out a second mortgage on the property to leverage the invested capital, market value and cash flow to use as a down payment on a second property with the additional cash I have on hand.
I see the idea of 2nd mortgages thrown around a lot, but nobody has really posted something on the best strategies of using them.
Your input is greatly appreciated!
Stu