How To Find A Down Payment For A Duplex Someplace You Forgot

If you’ve ever thought about buying investment property you may have stopped short when you realized you had no idea where you’d come up with the down payment.

Now that we’re in a booming real estate market, saving an even bigger down payment to invest may seem like an even more preposterous idea.

Maybe not. Two sources of down payments that almost vanished during the great recession are back.

Whether you bought a home during the downturn, or purchased it long before that and rode out the storm, odds are the hot real estate market means you have equity in your home.

That means one way to come up with a down payment on a rental property may be to go to your local lender and get a Home Equity Line of Credit, also known as a HELOC. This loan product is a second mortgage on your home which you only make payments on if you use it.

Using it as a source of funds for a down payment on an investment property that cash flows well enough to make the loan payments results in you owning two properties (your home and the investment property) without adding additional expenses to your budget.

Real estate isn’t the only investment sector that’s booming. The stock market has been fairing well too.  The value of your IRA may have grown to the point where it too may be a source for funds to purchase real estate by converting it to a self-directed IRA.

Remember, you must convert your property to the proper type of IRA to use it to purchase real estate. This type of investment also requires any reserves for property maintenance, improvement or repair come from the IRA, and you are not allowed to self-manage the real estate.

If you’re interested in learning more about what investing in real estate can do for you, please call or email me. If nothing else, we can come up with a plan to get you headed in the right direction.