Updated almost 6 years ago on . Most recent reply
Cash out refinance to fund fix & flip
I would like some advice on this, and would like to know if this is a good idea or not. My property is currently worth about $445k. I owe $80k on it after doing cash out refinance few years back to update the house with floors etc. The current interest rate is at 4.5%. So I want to refinance to take advantage of the low rates right now and save a lot on interest. Since I have a lot of equity in the home, I figured now would be a good time to also get all of the equity I can since my house is worth more than it ever has been and at its peak in value. So my question is, would it be a good idea to to use money from a cash out refinance to cover the costs of a hard money loan to purchase a fix and flip investment? I have a hard money lender who accepts 10-15% down depending on the deal. With the cash out refinance I could easily afford the down payment and fees for the loan to cover the cost of a decent flip property, so would it be wise to take advantage of this opportunity?
any advice would be greatly appreciated!