Hello ladies and gentlemen hope that you all are doing well.

My wife and myself are getting ready to buy our next or 2nd property next year, a single family because the family has outgrown the space, we have 3 bedroom, now we need at least 4 bedrooms minimum and a potential finish basement to add more rooms, we have 2 kids, a boy and a girl, so they will need a room each soon, now they share a room, a very big room because the girl just turned 1 year... One for us, one for my in laws, and i will need one for my mother whom health is delicate... Plus since i am working mostly from Home, from my kid's room, i need an office space, my computer desk is located in a corner of the living room, a big corner and i still have space for a large couch that can fit 4-5 people... So we are going from a multifamily to a single family, we bought this multi with a program called NACA (Neighborhood Assistance Corporation of America) for 1st Time Home Owners, very good program... But if we want to buy another house, the program requires that we sell this one or refi... I have never refi so no experience on that. On the 3 years we have been living here we have done tons of small and big renovations and reporting lots of expenses to our taxes, this year we are planning not to report expenses to and to work more, to have more income (i have 1 permanent job and a "side" job that i can pick it up as needed). SO please what are your recommendations?

What do we need to get ready in order to buy our 2nd property? And this will be like our dream house...

Any ideas, comments, suggestions and constructive criticism are welcome :).

Thanks and God Bless.

LZ, I not understand this comment " this year we are planning not to report expenses". Presuming that these expenses are for improving your existing 3 unit rental property, they should be at least 2/3 & perhaps even entirely deductible which should help increase the value of the property while also lowering your income tax obligation.

As you start looking for a new property don't limit yourself to just SFDs. I suggest that you consider also looking at 2 family & properties with either an attached or a detached accessory dwelling unit. This could give you the space you need.

Do you plan to sell the first house and then buy the second one or do you plan to keep the first house and get the second one to replace it?

I'm confused as are Steve and Richard regarding your plan.

1) Are you selling current property or refinancing?

2) Why are you hoping to gain by not reporting expenses? That just leaves tax deductions on the table.

Refinancing is simple: you go to a lender who then hires an appraiser, and if the LTV (loan to value) is 80% or lower, most times you get a new loan with new terms. Rates have gone down a bit, but the rule of thumb is you need at least 1% lower rate to make the refinance worthwhile. You have to recoup all the closing costs, and depending on what kind of loan product you go with, you will pay somewhere between $800 - $4000 for a typical Residential property refinance. A second rule of thumb is you want the savings to recoup all your costs in no more than 3 years...preferably 2 years or fewer.

-Robert, OntarioCanada thanks, i don't have any reno. experience neither handyman skills, my father in law has some handyman knowledge but not from this country, he needs to learn this country codes and laws, so for me doing those this might be a little tricky or difficult.

-Steve my friend thanks, that is why i post the question here because some people "brokers", said one thing, some others say different, 2 brokers mentioned that it will be better if i don't report much expenses or not at all so i can have more income, so i was not sure about that, but she also mentioned that you have 3 years to report the expenses as long as you have the receipts.

So i have a 2 family, my understanding is (correct me if i am wrong) if i look for another 2 family, it won't be consider like i am downgrading, this means that instead of me putting 3-5 % down, they will require to be more, because it will be look as an investment or something in between? Attach or Detached accessory dwelling unit, this is new for me, let me google that hjehehe.

I just really need more space, what ever we have to do, that will work better for us, have to put less down, the better.

Started looking for places, not yet, i had started making calls to NACA, to my actual Mortgage people, asking some questions and 2 brokers, any recommendation? I have heard small banks or Credit Union are the best... Please any advise will be greatly appreciated. I have a 3.25% interest now and the broker i am talking to she said she can get me that.

Richard thank you, i am planning to keep the actual one, refinance to i can get out ot the NACA program, and buy another one, more because we really need more space.

Nellie thanks, i stated to dig about that, that is why i post the question because as a newbie, you can get confused easily with so many inputs like i said before to Steve. And thanks for sharing the experience, i will keep that in the top of my mind hehehe.

What do you mean taking over some of the space rented? Like make an addition to the current place? I was planning to do the basement but the space is not worth the price they are asking like 30-35k, and i might just get one room due to the boilers location and water tanks.

Sid thanks, haven't read you in a long time hehe.

I am planning to refinance the actual place, not sell.

Like i explain to Steve, 2 brokers gave me that idea, so instead of having more losses, or that the IRS give me money back, i can have more income available, it sounds weird to me so that is why i posted, but i am willing to do what ever is best for us, please enlighten me :).

"the rule of thumb is you need at least 1% lower rate to make the refinance worthwhile." DO you mean if i actually have an 3.25 % Interest Rate, i should get around a 2.25% Interest to make the Refi worth?

"A second rule of thumb is you want the savings to recoup all your costs in no more than 3 years...preferably 2 years or fewer." Why is this? Sorry my ignorance, i am still learning.

LZ, is your current property a legal 2 unit or a 3 unit? I thought that you were on the first floor & had tenants on both of the other floors which makes it a 3 unit.

Steve legal 2 units.

Yes I live on 1st floor...

Regarding the 1% drop in rate. Precisely. If you cannot save at least 1%, it's likely not worth the effort. But again, this depends on the total refinance costs, which leads us to rule 2....can you recoup the expense in 2 years or less....certainly no more than 3 years.

why is that? Simple. Don't spend money on something that doesn't MAKE you much money.

Let's pretend your closing costs to refinance are $2500. If you only save $20 per month in interest, then it will take 125 months (over 10 years) to get all that money back. That's way too long of a payback period, especially considering you might sell the place meanwhile and never realize the full benefit of the saved interest.

On the other hand, if you are saving $100 a month on interest, then your investment pays you back in 25 months...slightly over 2 years. Not too shabby. I would definitely do that.

The final answer is based on your overall plans of how long you will keep the property. The kicker is that plans change, and factoring in 10 years worth of unknowns is a lot harder and less certain than 2 years.

$2,500 isn't a lot of money in this game, but if you could do something else with it that earns more money over less time, why wouldn't you? We're in this game for the money. I know our tenants are sweet hearts and we love them dearly, but at the end of the day, I think most of us dove into land lording because we wanted a bigger paycheck.

Robert, Ontario thanks, yes it is a legal 2 family, someone gave me that advise a few years ago but thanks, is a good advise. I wasn't planning to legalize my basement, just create more space for us.