Raising $: Sell the house? Cash-out Re-fi? Or HELOC?
I’m just getting started. Step one is to raise some capitol.
I’ve got a small house in Seattle that has gained some equity over the last 5 years. Purchased it for $150,000. Interest rate is 3.25%, 30 yr fixed. Currently owe $127,000. Estimated selling price at this time is about $378,000.
The house is currently being rented out at $1650/mo. I cash flow about $246.00 per month on it.
It was built in 1943 and has cinder block walls. It's a 2 bed, 1 bath at 780 sq ft.The house was remodeled about 5 years ago and looks relatively modern inside. Outside, the cinder blocks are covered by 4x8 sheets of fiber cement siding (HardiePlank), so it doesn't look too bad.
I've been renting it out for 1.5 years but lived in it before that. I could sell without incurring capitol gains taxes.
I'm leaning towards selling the house. It's old and I worry a bit about the walls falling down during Seattle's overdue earthquake. Also, the Seattle market has slowed and the monetary value of the house has started to decline recently.
Selling: could net me about $250,000 (how much would selling fees eat into this?).
Cash-out refinance: My lender says he can give me 70% of appraised value. So, about $264,600.The new interest rate would be 5 to 5.5%. So, new mortgage payment would be ~$2,550, which is about $1,300 more per month than I currently pay.
HELOC: Lender says HELOC is typically 70% of appraised value. Interest rate will be variable and tied to prime - about 7.5% right now.
What would you do?
Eventually I'd like to own a few duplexes/triplexes/fourplexes. Maybe in Idaho, or New Mexico or Texas. Not exactly sure on location yet.
Any and all suggestions are appreciated.
Thanks,
Cory