Cash Out Refi, WA quest/advice

2 Replies

I'm partners on a duplex, we just got done rehabing the property, I currently live I  one unit and we have the other rented out. My partner and I own the property free and clear, however I owe my half to my partner through a private collection contact. 

I am doing a cash out refi on the property to pay off my partner as well as my credit cards I have used during the rehab. I'm also considering taking out more money to hold onto to use as a down payment towards my next rental property....... my questions are;

should I pull out as much as possible to put me in the best situation to buy another property (2to4unit)?

only get enough to wipe my slate clean? and worry about down payment when I find a deal

or do something I  the middle where I end up with a few thousand in the bank after credit cards and  partner are paid off. 

$ breakdown looks something like this; 

property value about $180k

total investment about 105k

loan to partner  $45k

credit cards $15k

also used about 8k in cash out of pocket. 

each unit is rented at $1000mo

my partner is not going on the refi, he is keeping his half free and clear so I could essentially refi out about $135k. 

I'm looking for ideas to get me to be able to purchase my next rental property asap, on my own, either fha, or conventional or maybe owner finance.....  thanks I  advance bp!

(360) 421-9397

@Jesse Cathcart

"should I pull out as much as possible to put me in the best situation to buy another property (2to4unit)?" = YES!!!

(SMART) leverage is the key to real estate growth and wealth.

Since you will only be able to get a Conventional loan for $126K @ 70% LTV (meaning 70% of the new appraisal is the max for a Conventional cash out refi on 2-4 unit investment property), take the max, pay off your partner, costs, debt, etc...pocket the rest...rinse and repeat.

All day long, no question.  $2000 in rent, awesome cash flow, 30% equity still, and you are in great shape.

Best of luck!

Zack Karp, Lender in (#NMLS 197896)
847-387-5513
So I have better news than originally thought!! our duplex appraised for $240k Also have talked it over with my partner and I'm going to do a 70% co refi, and going to buy him out with the cash. all said and done I'll be debt free on all accounts including the wife's cc's, and own the duplex myself!! $1050 mortgage payment including tax and ins. each unit is rented for $1000 mo. planning on getting a heloc for 10% = $24k that ill use towards another property after I file taxes this year. any other advice is welcomed!
(360) 421-9397

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