By springtime, our mortgage on our Chicago 2-Flat will be annihilated.(!) For a variety of reasons, we plan to purchase a tiny studio condo in a swankier neighborhood. The units we are considering cost between $100k-$150K and we calculate a positive cashflow from rental income. We plan to contribute an additional $2k/month towards the principle to pay off the debt within 5 years. It seems we are fortunate enough to have several different financing options:
--Traditional 30 or 15 year mortgage,
--5/1 ARM loan,
--Home equity loan, and
--Home equity line of credit (no matter what, I plan to apply for this when our mortgage is paid off),
-- ???
Is there a preferred way to finance a second property? What are the elements to consider? I also expect that we will continue to purchase rental properties and want to have as much flexibility to do so when we find good opportunities. Thanks in advance for any helpful advice.