Buying a Second Home While Owning Your First

5 Smart Solutions

Are you thinking about buying a second home while still owning your first? Navigating the process of buying and selling simultaneously can be tricky, but with the right strategy, it’s entirely doable. In this post, we’ll break down five effective solutions to help you manage this transition smoothly.

1. Sell, Wait, and Buy: A Step-by-Step Approach

One of the most straightforward options is the “sell, wait, and buy” strategy. Here’s how it works:

• Sell your current home.
• Wait for the right property to come onto the market while you temporarily rent or stay with family.
• Buy your next home when the timing is right.

During the waiting period, you’ll no longer own a home. So, where should you stay? If you’re planning to wait 6 months to a year, you could rent a typical apartment or house. For shorter waiting periods, here are some options:

• Couch surfing with family: This might work if you have extra space at a family member’s home, though it may be less ideal if you have kids.
• Extended-stay hotels: Hotels like Marriott or Comfort Inn & Suites offer affordable long-term stays.
• Midterm rental through Airbnb: These rentals are available for 30 to 120 days and offer a fully furnished space where you can live comfortably while searching for your new home.

2. Rent Out Your Current Property

If you’re not ready to sell your first home, another option is to find renters. Renting out your property allows you to keep it as an investment while you buy a second home. You’ll need to:

• Sign a lease with renters within a 30-day window.
• Transition out of your home and into your next property.

3. Simultaneous Buy and Sell

If you’d prefer to avoid renting in between homes, a simultaneous buy and sell might be the solution for you. This involves:

• Making an offer on a new home, contingent on selling your current home.
• Aligning both transactions so you can close on your current home and your new home at the same time.

This strategy requires coordination, but it can eliminate the need for temporary housing.

4. Recasting: Lower Your Payments Without Refinancing

One of the lesser-known but effective strategies is recasting. This approach allows you to:

• Buy a second home with a minimum down payment (typically 5%).
• Qualify for both mortgages, even though most people don’t want two large payments.
• After buying, sell your first home and move the equity over to your new home.

For example, let’s say you buy your second home with a down payment that results in a $3,000 monthly mortgage. Once your first home sells, you move the equity over and reduce your mortgage to $2,000—without refinancing. This is a great way to minimize upfront payments and avoid extra costs.

5. Become a Cash Buyer with Ribbon or Homeward

If you don’t qualify to own both homes at the same time, you can still buy a second home as a cash buyer with the help of services like Ribbon or Homeward. Here’s how it works:

• These companies purchase the home on your behalf with cash.
• You then rent the second home while you prepare and sell your first home.
• After selling your first home, you use the proceeds to buy the second home back from the company at the same price they purchased it.

This strategy turns you into a competitive cash buyer, even if you still need to sell your first home.

If you have more questions or need assistance in choosing the best option for your real estate investments, feel free to reach out at (678) 389-3887 or email us at [email protected]. Stay tuned for more informative content, and don’t forget to subscribe to our blog for updates and tips on navigating the world of real estate financing. Thanks for reading!

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