Should I refinance all properties or just the one?

4 Replies

We have 3 rental properties. Property 1 & 2 we own outright. The 3rd was recently purchased using a Line of Credit from our first 2 properties.

We want to refinance the 3rd property to more favorable terms. We are not sure what to do. Should we...

1. Refinance the 3rd property so that we get our Line of Credit back. (Then have the Line to use for future purchase)

or

2. Refinance all 3 properties and pull out a chunk of money to have in case we want to purchase a 4th. 

Not sure which way would be better. We are trying to figure out the + and -s

@Steve Dudeck I would agree with Anthony. No need to take on debt that you’re not even ready to deploy effectively. You can just take another line of credit to get your next one, rinse and repeat. The risk is incredibly low in that situation. You’re in great shape here

In almost every case, you are better off using a line of credit rather than a cash out refi for investing. The sole exception (at least in my mind) is if you already have your next investment property under contract and KNOW you will close on it. Other than that, get your LOC back and start analyzing deals.

Happy investing!