Would you want 25k cash or $75k from a cash out refi

[Account Closed]

Curious what some of you who have experience would do. If you had $25,000 cash to invest what would you invest in? If you had instead $75,000 equity and did a cash out refi what would you invest in? Which scenario would prefer to find yourself in?

[Stone Jin]

It depends on what you are comfortable with.  If I had only 25K to invest (assuming that spending the 25K doesn't wipe out your rainy day fund), I'd leverage get a 100K house in the Midwest.  Or you can do both, do a cash out refi (not heloc), you now have more money to play with.  

Yes, leveraging will eat away at your cashflow, but it allows you to get into bigger assets.  I personally am not a big believer in 25K houses. On paper they look good, you might make it to work if you are local, but long distance investing in 25K assets is scary to me.

I'm currently in the process of buying a SFH in Ohio. It needs work. I'm buying it for 110K ARV is 160-170K. I'm putting in 15-20K in upgrades. So I'm all in for like 50K, my monthly PITI is about 800 and my rent is about 1500. After management my cash on cash is about 10% and I have 40K in equity if I need to get out of the project.

Good luck.