'Serial Buyers' Reap
Real-Estate Rewards
Question: I just bought a home with 5% down. I hope to live in it for the first year, then rent it out after that and purchase a second house. Is it easy to get financing to buy the second home with 5% down?
-- Mehul, New York City
Mehul: Amazing as it may seem, you can repeatedly buy homes with little to nothing down, as long as you continue to have the income and credit to qualify for the mortgages. (It gets harder each successive time as lenders require additional income if you have rentals.) This practice is called "serial buying" and many savvy investors are doing it.
Keep in mind, however, that to get the best financing, you must intend to live in the property. Just how long you should live there before renting it out is a gray area. Some real-estate advisers suggest you live in it for at least a year; others suggest longer periods. Check with a professional to see what works best for you.
For answers to more questions on investing in real estate, check out the following columns:
-- Mr. Irwin has more than 25 years' experience as a Los Angeles-area real-estate broker. He is the author of more than two dozen books about real estate and is recognized as one of the most knowledgeable writers in the real-estate field. Mr. Irwin's most recent book is "Tips and Traps When Renovating Your Home," (McGraw-Hill, 2000).
Submit your question to realestatejournal@wsj.com, with your first name and the city where you're located, which are required to publish your question. If your question is answered and posted, we will show your first name and city.
Although we can't acknowledge all e-mail, we'll answer as many questions as possible.
Email your comments to rjeditor@dowjones.com.