Have 4 SFH and am looking to expand to 4 plex. I need to either sell or re-fi a condo I bought in 2013. That will give me the capital to invest in a 4 plex. I don't do 0 down stuff and I am also looking for capital to do some rehab for value add and rent increase.
-Current Value $260k
-Rent $1875, (Dropped from $2375 from 3 years ago due to oil downturn in Houston)
-Mortgage 15yr 3%, total mortgage payment inc HOA/Prop tax $2375
-Remaining mortgage balance $130k
I acknowledge this is a negative cash flow property. And I have taken maintenance, prop management into consideration during and am fine putting cash in for now. The reason I don't outright sell is the condo is its in a high development area in Midtown, Houston. There are massive 5 story, and 25 story developments going on blocks away. The average price/sq/ft will increase dramatically in the next 10 years. Houston is also set to overtake Chicago in population in the next couple years.
Option 1 Sell:
-9% for closing costs, walk away with $106k for 4 plex
-Refi to 30 yr, drop mortgage payment to $1,800
-Walk away with $78k for down payment on 4 plex
-Is this even an option for what I'd like to do?
In my opinion future valuation play is a terrible idea... cash flow is king... the decision whether or not to refi the condo is without question, but the path to a larger property depends on the equity need for the plex... I would also think about refi of the other 4 properties along with the condo... maybe into a single loan...