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Updated over 3 years ago on . Most recent reply

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Amy Stanley
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Can one use equity in a property without doing cash-out refi?

Amy Stanley
Posted

Hi all, 

I am newer to REI, I have 2 STR investments and my own home. I have over 50% of my homes value paid off and 25% in each investment property paid off. Can one use equity in a property without doing cash-out refi?

TIA,

Amy

  • Amy Stanley
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    Greg Scott
    #4 General Landlording & Rental Properties Contributor
    • Rental Property Investor
    • SE Michigan
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    Greg Scott
    #4 General Landlording & Rental Properties Contributor
    • Rental Property Investor
    • SE Michigan
    Replied

    You probably can, but that would entail encumbering one asset for the purchase of another one.  Cross-collateralizing assets creates a house of cards such that if one falls, the entire structure comes tumbling down.  You don't have that issue if you simply do a cash-out refi and then go buy another asset using that cash as a down payment.

  • Greg Scott
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