Cash Out Refi to buy multiplex
Hello All
i have an opportunity to partner on a multiplex in Denver. I have most of the cash needed to close on it but am short like 50K. currently we have about 400K equity in our first home. the rates to get a Cash Out are around 3.2% right now no closing costs. currently though we sit at 2.875% rate on the main house. only owned a few years so not that deep into payments etc.
running full 360 months out at current vs after cash out the difference in the life of the loan interest is about 55K or so ... assuming my math is correct running amortization on both scenarios out 360 months, adding up total interest payments etc.
in my head im thinking the long term cap rate gains and cash flow on the property far outweigh the added interest payments over life of loan. also if we were to make only but a few extra payments every few years from now we'd pay off that extra interest and shorten the loan life to account for the added costs...
with todays rates etc thoughts on this approach?