What's the BEST use of my money when pulling out equity?

3 Replies

I will try to keep this short-

I bought a duplex in Seattle for $583,000.  I'm renovating both the upstairs and downstairs, the renovation is costing around $130,000.

$80,000 of that is being borrowed against my Morgan Stanley Portfolio at a 4% interest rate.

-I upgraded the HVAC system / a heat pump for each floor

-Upgraded the electrical / new panels / new wiring

-Added an additional washer/dryer upstairs

-New kitchen upstairs & down

-New floors upstairs & down

-New bathrooms upstairs & down

-New floors upstairs & down

I am planning on living in the upstairs and renting the downstairs out.  

-My mortgage is $2800/month

-I'm planning on renting the downstairs out for $1800-2000

I'm planning on getting the place appraised and pulling out equity, my question to all of you is what is the better use the equity?

-Buying another place and fixing it up or paying off my debt to Morgan Stanley?

Thanks to all who respond in advance!


Sounds like your in a great position to pull equity out of the home and pay off your MS debt and still get a good rate. Based on your previous investment I would take the cash out above the MS pay off and put it down on another investment property. You could always utilize a second home loan which is only 10% down. That offers an immediate STR rental situation that you could turn into a long term down the road. Take a look at your local market or out of state and see if a second home options might be a good fit.

If not I would still use the cash and keep building your real estate portfolio with an SFR or MF (2-4) unit.

Jason, thanks for quick response!

I really appreciate your insight and thoughts on the situation. I like what you said about taking the equity and buying a second rental, expanding my real estate portfolio is a goal of mine. 

Being in the Seattle market can be tricky.

I hope all is well in Florida!