Updated 25 days ago on . Most recent reply
Tons of equity. How / Should I use it
Hey y'all. I just purchased my first investment property and it is doing extremely well (cashflowing). We operate it as an STR and got the tax benefits. Needless to say we are itching to find out next deal.
We have a ton of equity in our primary but also a sub 3% interest rate. It was a new build that we locked the contract in early 2021. By the time we closed the value was up by over 25%. We used the VA home loan to purchase it. So now we have about $200k in equity and a low interest rate, but our equity is locked as well as my VA home loan.
We are debating selling the home to unlock the equity and VA loan and weighing the pros and cons. If we don't sell, we keep the rate and lower payment. If we sell we get cash in our hand and the VA loan back.
My concerns with selling are that we would need to spend more to buy a home that is equal to our current home in size and location plus our rate would be higher. So our personal expenses would be higher. I’m also concerned that we would have paid a ton of interest on our current loan because of amitorization and if we start a new loan, we would be back at the beginning.
What would you do in our situation? What would be the best path to maximize what we have available to us?