I just happened to do a quick search for condos for sale in our area. And guess what?! Another condo in our condo association is for sale. We don't have enough in savings to cover another 20% down payment just yet, but I thought maybe we could tap into the equity in the 1st rental property.
This new condo is really really nice. Looks in great condition and it already has a tenant paying $850 per month. (We charge $825 for our rental).
I called the credit union and they referred me to the mortgage lady we worked with last time. I wasn't really looking forward to contacting her since I kind of through a little fit with lots of tears right before we closed on our last property. I felt that she misled us and when I get really mad I usually end up in tears. I hate that.
In any case, if I want to go through the credit union I have to work with her. So I emailed her. She responded very quickly. Unfortunately we have to have over 25% in equity to be able tap into it for the purchase of another property and we don't have that much.
I think Mr. R is relieved. I don't know why, he didn't have to do anything last time except sign some papers. He told me we can't buy anymore properties until we have $15,000 in cash in the bank. We'll see about that.
But we definitely won't be buying this condo. Unless it doesn't sell anytime soon so we have time to save up more money.
I'm a little sad. It's a really nice condo! And with a tenant already living in it!
You probably can't tap the equity in the investment property but what about the equity in your primary residence? You should be able to go up to 90% on that. If they tell you no, try a different bank.
ReplyDeletePerhaps Mr. R is relieved because he does not want to take on additional debt, even for an income-producing asset? We have many such discussions in my household as well.
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