@Yesenia Padilla , your "save" option should happen in any case! (No brainer!)
I don't really see a question here, because you've already been carrying out the answer. Congrats on your progress so far. (Some of which needed your "refinance" option, right?)
And I shouldn't even need to remind you: only buy bargains!
ie. From 2018 onwards, don't rely on never-ending/uninterrupted appreciation! All the best...
@Yesenia Padilla , and what I meant is: start/keep saving anyway! (The movie "Shawshank Redemption" comes to mind, when Andy asks for a rock hammer). Cheers...
The smart answer is actually refinancing when you are growing. Your dead equity is going to waste. You are only saving the prevailing mortggae interest rate when you should be reinvesting and earning 10% or better ROI.
$400K in dead equity is worth $3332/month in investment income. If you are saving 5% in interest you are losing out on a easy $1666/month in opportunity value.
To grow at a respectable rate leverage is the best partner to have.
Take Brent's warning in regards to appreciation as well. If th eequity is now in high appreciation properties that can not cash flow with 100% financing I would advise you sell and reinvest in cash flow only properties. Nothing is forever.
I can't/won't tell you what you should do, but I'm still trying to grow too. I recently purchased property that I believe I could 1031 or cash out refinance in a year or so.
I'm leaning towards cash out refinance for this property because I really like them so far. My last property I did a 1031 to buy these and don't regret it a bit.
But long story short, I mostly agree w/ @Thomas S. My need for expansion drives the need to leverage. Just don't leverage more than you're comfortable with. Which to me, means I'm still cash flowing ok after all expenses, cap-x, etc.
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