Updated almost 5 years ago on . Most recent reply
Equity/Cash Out of Home in California
Hello - we own a rental income property (100% equity) in Southern California and are preparing to buy our second rental income property (out of state). I am trying to determine what is the best way to get cash out of the current property's equity to use as a down payment on our second property; cash-out refinance or HELOC? I was wondering if anyone has had recent experience with this in CA and what would be the best method vis a vis today's rates, points charged, types of lenders to approach, etc.
The current property is easily valued at $400k+ and our base assumption is to access and use $100k as a down payment on the next property. Planning further ahead, we could do the same with a third property (another $100k down payment, leaving $200k+/50%+ equity in the first property so it still cash flows).
Or is there a better way entirely to get that cash? That is just my initial thought process, I am curious if any of you experienced investors approach this situation in a different way? Thank you!