Good morning BP Family,
I posted this question on twitter, but by request I'll repost here with details for better results. I'm looking for input on financial strategy...
I have a rental property currently cash flowing $450/mth. I paid cash and refi'd the deal at $115k ARV where I was able to take about $80k out and buy another property. This original property is currently worth about $145k now. I feel like I should leverage this equity in some way to get yet another property (can I do that twice on the same house?)
My question is, What would you do:
Am I able to (should I) refinance this property again at CMV? We have long term renters who are planning to buy the house ultimately.
Take and equity loan on it? I currently know nothing about equity loans.
Or keep as is and continue to pay down the mortgage? I've seen info lately on getting mortgages to zero to maximize cash flow.
Thanks, I appreciate any input on this
Hi @Brian Orr .
What I'm seeing is that you have a current loan for around $80k that still cashflows at $450. If you refi'd at 75%LTV of the $145k, you could pull out around $108k. Paying off the $80k, you're left with $28k.
What are your closing costs for a cash out refi?
An equity loan is similar to a mortgage, except it does not have a fixed rate.
I would compare closing costs on both products to see which one is lower. I don't see much advantage to either, except the refi has a fixed interest rate, but you have to take the entire amount. If you get an equity loan, you can borrow up to the amount of the loan, but you don't have to take it all.
I don't know your area, but what can you do with roughly $30k? Can you use that as a down payment for a new property? Will your current financial situation qualify you for a mortgage on a new property?
Hey @Mindy Jensen ,
I will look into the terms of both, especially the variable rate on the loan. I'm concerned how that may inflate? I was thinking a refi would get me enough cash for 1 deal and I can structure the payments to be less than the rent. But I would have some cash sitting and I'd lose the cashflow here, but it would allow me to expand. I believe closing costs are around $3000 +/-
I can qualify for any mortgage but i've had problems with local lenders wanting to deal multiple properties, tons of hoops and a huge hindrance in building my portfolio. Unfortunately there's NOTHING available in the 30k range, I need at least 50 cash for a below average deal and probably 30 more for rehab costs.
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