Englewood, NJ · Member since 2016 · 47 posts · 4 votes
Hellp BP World!
Looking to see if anyone has experience and what the avg numbers are for cash out refi on rental properties owned free and clear.
I am in New Jersey ..does anyone know a good small bank I can get in touch with that are reputable.?
I have property free and clear with tenants providing good cash flow...I wanted to see If i can refi one of those properties and use the cash for a new property im looking to get. And whats a good number.. ex... 75% of what house appraises for..6% intrest for 15 years?
Should the underswriter have a easier time with this project rather than a reg home mortgage?
Investor · Rock Hill, SC · Member since 2015 · 6 posts · 2 votes
9y
Hi, Fred. You are exactly right. You can generally expect around 75% LTV on a rental. You can then use that as down payments for another couple of properties. You may also consider a line of credit on your rental property that will allow you to only pay on what you use...meaning if you take out a line of credit for $50K but only end up needing $20K, you then 1) only pay back the $20K you used, 2) can make interest only payments at any point, and 3) still have $30K available in case you need it for repairs or to get rolling on another property.
Investor · Rock Hill, SC · Member since 2015 · 6 posts · 2 votes
9y
Hi, Fred. You are exactly right. You can generally expect around 75% LTV on a rental. You can then use that as down payments for another couple of properties. You may also consider a line of credit on your rental property that will allow you to only pay on what you use...meaning if you take out a line of credit for $50K but only end up needing $20K, you then 1) only pay back the $20K you used, 2) can make interest only payments at any point, and 3) still have $30K available in case you need it for repairs or to get rolling on another property.
Lender · Berkeley, CA · Member since 2017 · 1k+ posts · 549 votes
9y
You should reach out to a guy in my office named Christian Pepe. He can walk you through many options. There are new products out there for rentals where we look at the debt service on the rental, and that's it. It works more like commercial. If you're 125% over the debt you can get a 3yr product (longer eventually) that allows you to take cash out.