I'm looking for the best type of loan to use to purchase a rental unit. I left my job three years ago so my income is scaled back but my house in vegas $320,000 and my condo in houston $250,000 are completely paid for. Can I group these two assets together when applying for a loan for the third property or is a line of credit better? thanks in advance, Reece

Reece - sure you can. As a matter of fact, if your plans on to do some real estate investing having equity lines on your properties is definately the best way to go. You can then go into contract with a down payment. My recommendation is that you still apply for a mortgage on any new property you want to purchase...there are many programs on the market - no income verification loans, investor loans etc. Best thing for you to do is to work with a true mortgage professional...one with experience not only in lending but also in real estate investing. I provide loans in 39 states...including NV and TX. Good luck.

Reece:

Income producing properties are usually underwritten based in the cash flow that they themselves produce. While having a guarantor that has income from other sources is good, not having that income does not have to be a deal killer.

A lender will probably ask you to provide that equity in the form of cash for the new property. I think it might even be to your advantage as getting a home equity might be a more expedient way to get cash out of the house. Of course, the devil is in the detail so discussing your case with a local bank lender would be a good avenue.

thanks for the help, would a home equity line of credit be processed faster if i only pulled out 50% of the value of the underlying asset?

not really, it depends on how much you can afford to borrow. Loan-to-value comes into effect if the combined ltv is over a certain percentage. {usually 90%} on a combined basis with your first. In this case the HELOC would be a first so no combined ltv here.