Cash out refi to purchase more rental properties

Multi-Family and Apartment Investing
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Cash out refi to purchase more rental properties

Douglas Perez
Member since 2019 · 3 posts · 0 votes

Hi bigger pocket family I currently have a triplex in NY

Had it for about 10 years, looking into expanding hopefully purchase a 5 to 10 family property.

I believe I have a good amount of equity in the property and would like to refinance and use that money to purchase more properties.

Any suggestion or ideas or is this a good idea.

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Seth Williams
Real Estate Broker · Winthrop, MA · Member since 2014 · 260 posts · 199 votes
6y

Great idea! If it works out and is in your total goals. After owning a property for 10 years what condition is it in? How much will the refi kill the cash flow - all things only you would know.

refinancing or pulling equity to make bigger moves and scale up is a great idea either way. You also could potentially just refi / use the cash in the same loan to jump into a commercial loan ( just one ) for both properties. Best to talk to the local lender you’ll use to figure this out.

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  • Seth Williams
    Real Estate Broker · Winthrop, MA · Member since 2014 · 260 posts · 199 votes
    6y

    Great idea! If it works out and is in your total goals. After owning a property for 10 years what condition is it in? How much will the refi kill the cash flow - all things only you would know.

    refinancing or pulling equity to make bigger moves and scale up is a great idea either way. You also could potentially just refi / use the cash in the same loan to jump into a commercial loan ( just one ) for both properties. Best to talk to the local lender you’ll use to figure this out.

    1Reply
  • Douglas Perez
    OP
    Member since 2019 · 3 posts · 0 votes
    6y

    @Seth Williams great thank you didn’t think of that

    0Reply
  • Erik Hatch
    Rental Property Investor · USA · Member since 2018 · 325 posts · 222 votes
    6y

    Have you gotten an appraisal to see where you stand?

    0Reply
  • Douglas Perez
    OP
    Member since 2019 · 3 posts · 0 votes
    6y

    @Erik Hatch no I have not

    0Reply
  • Erik Hatch
    Rental Property Investor · USA · Member since 2018 · 325 posts · 222 votes
    6y

    Maybe start there to see where you stand. It may give you an indication of what you can do and then plan next steps. 

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  • Account Closed
    Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    6y

    yes stripping dead equity and investing is what make you a real estate investor.  Sitting on dead equity is a waste.

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  • Matthew Horstmyer
    Rental Property Investor · Moncks Corner, SC · Member since 2019 · 60 posts · 22 votes
    6y

    @Michael P.

    When you say dead equity, what amount (%) would you consider as dead equity in a property ?

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  • Account Closed
    Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    6y

    For me my lender makes me leave 25% dead.  Reinvest 75%.

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