Residence Equity what should I do?

Question

I have been wondering what to do with my current residence. I am aggressively moving forward as a real estate investor with single family, duplex, fourplex, and apartments; unsure of best option with current residence.

1) Sell home to capture 150k plus in equity to use as capital for real estate investing

2) Refinance pulling out ~40k and turn into rental

Facts: home build 2012 - est value 350k - loan balance 163k - 15yr note 2.75 rate - desirable area - 5 bed / 4 bath - rental value 2200 - prop tax 1900

Forgive if I forgot pertinent info.

Regards,

Micheal

Michael Willand · Answer

Perfect, thank you for all your advice.

Chris Szepessy · Answer

I also agree with the HELOC. You should be able to get around $115,000. I would get as much as you can, even if you don't intend to use all of it. You only pay interest on what you are actually using.

Michael Willand · Answer

Thanks, this is something we haven't strongly considered, and a great point with the fees from selling, that is a large sum of my money. May I ask your recommendations on the minimum HELOC amount to move aggressively acquire cash flow properties, single or multiple.

Best Regards,

Michael

Jacob Sampson · Answer

I would get a HELOC on the home and use it to acquire more properties.  I wouldn't sell because the transaction fees would be a major "tax" on your equity.  You would likely pay somewhere around $25k to sell the home.  That is 13% of your total equity!!!