I am new to real estate investing and looking to buy my first investment property here in Florida .
I already have a primary residence and my mortgage on the same is @4.3% for 30 year fixed .
I have been able to cut it down principal significantly by paying off early but I realized the benefit of passive income rather than paying of the house early .
Now I am wondering if I should refinance and take a buy out .Doing so will give me liquidity to purchase my investment deal/s but my primary residence will again be under bank .
Please suggest what should I be doing paying of my mortgage early or refinancing , cashing out and using that money to buy more investment deals ?
Your guidance is really appreciated !
Without real numbers there's no real good way to answer your question.
@JD Martin thanks for your reply ..
here are the numbers
The house was bought for 275k(20%down)
Mortgage amount 220k
Currently outstanding 115k
Home market value -330k
New Investment house value -770k
20%+ closing =160k
I was thinking if I refinance and get loan on equity built in house I might be able to buy the investment homes ...does that makes sense ?
I on the other hand dont care about your numbers because someone else will be able to tell you better than I. I'll say it really comes down to EXACTLY what you want. Because you can pick the perfect strategy and still take it in an opposite direction. Your REFI, would help expedite jumping into the investment game. But your cashflow will help you build slower, safer. Here's my question...
what kind of "investment property" are you looking for and more importantly Why?
You need to realize that the cash-out of equity is going to put you into the high 4's or low 5's rate-wise. Also, best case you'll now have a mortgage for ~297,000 (some lenders will do 90% for personal residences). Can the investments you're looking at fund themselves, the increased portion of your new Principal/Interest/Taxes/Insurance AND provide an acceptable income? If so, I say go for it.
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