Thoughts on Cash Out Refi?

[Tim Kaminski]

I have a duplex in currently paying $1,250/mo plus property management fees. Duplex makes $1,800/month gross rents.

8.375% rate. Current loan is $108k. I purchased only 2-3 years ago @140k and appraised last week at $275k

I was initially interested in doing a redo but even dropping two full points, I was saving maybe $100/month.

So, I can cash out $30k, reduce rate to 6.25%, pay +$100/mo($1,350) and bring my loan up to $150k.

Any thoughts on this? I like the thought of pulling out money to find another deal but I know my cashflow is tight and there’s not a lot on the loan currently.

[Drew Sygit]

Quote from @Tim Kaminski:

I have a duplex in currently paying $1,250/mo plus property management fees. Duplex makes $1,800/month gross rents.

8.375% rate. Current loan is $108k. I purchased only 2-3 years ago @140k and appraised last week at $275k

I was initially interested in doing a redo but even dropping two full points, I was saving maybe $100/month.

So, I can cash out $30k, reduce rate to 6.25%, pay +$100/mo($1,350) and bring my loan up to $150k.

Any thoughts on this? I like the thought of pulling out money to find another deal but I know my cashflow is tight and there’s not a lot on the loan currently.

 Pulling money out of a rental is never really the issue.

The issue is what will you do with the money?

If you can reinvest at a safe, higher return, do it!

Usually though, there's some risk in chasing that higher return.