Rental Property Investor · Houston, TX · Member since 2017 · 31 posts · 6 votes
I bought a 3 bedroom condo in Downtown Houston in 2013 with 10% down and a 15 yr mortgage. I put some extra cash into the mortgage and did some upgrades. I am slightly positive on cash flow, but now have 139k left on a property valued at 275k. I would like to pull 80k out along with 20k of my own and re-invest into new property.
I went full rental/passive income lifestyle last year. That means no earned income. I expect 149k of passive income this year. I'm not sure on a couple things:
1. Should I do a cash-out-refinance, or home equity loan? I have a 3% interest / 15 yr loan now.
2. How do I go about securing the cash-out/loan, and also the new property loan if I have no earned income?
3. I heard Tim Shiner speak and liked his approach of getting as many "doors" or cash producing assets as possible, while still maintaining a emergency fund. Anyone object to my suggested approach?
I have contacted my mortgage broker but have not yet heard back. Thanks all for your knowledge and opinions!
Lender · Glenview IL- CDLP NMLS#230554 · Member since 2015 · 2k+ posts · 747 votes
9y
You have good interest rate. Did you try to reach out to local bank in your area and ask if they can get you line of credit on these homes? Otherwise cash out is the only option you have for these properties. I would keep the same mortgage and search little more on other banks.
Lender · Glenview IL- CDLP NMLS#230554 · Member since 2015 · 2k+ posts · 747 votes
9y
You have good interest rate. Did you try to reach out to local bank in your area and ask if they can get you line of credit on these homes? Otherwise cash out is the only option you have for these properties. I would keep the same mortgage and search little more on other banks.
You have good interest rate. Did you try to reach out to local bank in your area and ask if they can get you line of credit on these homes? Otherwise cash out is the only option you have for these properties. I would keep the same mortgage and search little more on other banks.
I'm trying to wrap my head around the home equity loan / home equity line of credit. Can you give an example with numbers of how each would work in my case? Example, what I could get out, what I would owe in monthly payments and interest?
Lender · Glenview IL- CDLP NMLS#230554 · Member since 2015 · 2k+ posts · 747 votes
9y
@Bradley Chiakas Fix HELOC is in range of 5.49%+. I don't know what will be home equity line of credit. I am not in that department just giving you my suggestion. If the lender will fix your HELOC payment will be $453.73 ($80000 loan amount). You can up to 75% LTV or some lender do offer 80%LTV.
@Bradley Chiakas Fix HELOC is in range of 5.49%+. I don't know what will be home equity line of credit. I am not in that department just giving you my suggestion. If the lender will fix your HELOC payment will be $453.73 ($80000 loan amount). You can up to 75% LTV or some lender do offer 80%LTV.
Thanks for the info! Can I work with any lender? Or are lender's only in Houston more likely to give the loan? Also, do you see it as a barrier that I only can show passive income on tax return? I have about $400k net worth at the moment with 4 condo's, and about 50% of the overall value paid off. I guess that would mean I own $800k worth of real estate. :)
Lender · Glenview IL- CDLP NMLS#230554 · Member since 2015 · 2k+ posts · 747 votes
9y
@Bradley Chiakas I would say start with your current lender and try small credit union local in your area. Where you are doing banking they know your incoming and outgoing of income, they could be more helpful.