I HAVE TWO RENTAL PROPERTIES, I WOULD LIKE TO REFI ONE HOUSE, PULL OUT MONEY OUT FROM ONE HOUSE, AND BUY A 3RD RENTAL PROPERTY.
NOT SURE WHICH RENTAL PROPERTY I SHOULD PULL FROM SINCE EACH HOUSE HAS ITS OWN VALUE AND NUMBERS, ETC..
BOUGHT IN 2001, PAID 217K
VALUE NOW IN 2018, VALUE IS ABOUT 330-340K
BALANCE ON LOAN IS $8500 (ALMOST PAID OFF)
LOAN RATE IS 3.2%, FIXED RATE
AT THIS MOMENT , CASH FLOW IS $541 A MONTH. (TENENTS ARE IN ONE YEAR LEASE TO EXPIRE 1-31-19).
IF I PAY OFF THIS LOAN NOW, CASH FLOW WILL INCREASE TO $897 A MONTH.
I DO NOT WANT TO SELL HOUSE.
HOUSE # 2
BOUGHT IN 2014, PAID 220K
VALUE NOW IN 2018, VALUE IS ABOUT 335-345K
BALANCE ON LOAN IS $151K
LOAN RATE IS 4.375, 30YEAR FIXED RATE SINCE TIME OF PURCHASE IN 2014.
AT THIS MOMENT, CASH FLOW IS $200 A MONTH
TENENTS ARE MONTH TO MONTH, HAVE BEEN THERE FOR 15MONTHS, I DO NOT WANT TO SELL THIS HOUSE.
MY TWO PART QUESTION TO BP MEMBERS, WHICH HOUSE DO I BORROW FROM,
I NEED TO PULL OUT $80K-85K TO BUY 3RD HOUSE.
- 1. DO I BORROW FROM HOUSE # 1 AND PULL OUT CASH, BUT MY NEW INTEREST RATE WILL RISE TO ABOUT 4.5% (FROM 3.2%)
2. BORROW FROM HOUSE # 2, PULL OUT CASH BUT MY NEW RATE WILL RISE TO ABOUT 4.5% (FROM 4.375%).
I WILL PULL OUT 90K AND TAKE $8500 AND PAY OFF HOUSE # 1,
THEN TAKE REST OF CASH AND BUY 3RD HOUSE WITH LEFT OVERS ABOUT $83K ?
WHAT AM I MISSING, WHAT SHOULD I THINK ABOUT, I AM NOT INTO EXCEL CHARTS, AND CRUNCH NUMBERS, NO IDEA ABOUT THAT.
I AM LOST AND CONFUSED, ANY TIPS I WILL APPRECIANTE FROM BP MEMBERS !
I would pull it from house #1. Because it is paid off the property is deep into negative cash flow from the property turning your asset into a liability. The only income source on the property is your own cash/equity at a very poor rate.
Neither property is a real winner but #1 is terrible based on the dead equity earning next to nothing. You need to get your money out of the grave and make it earn it's keep.
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