Refinancing and Leaving Equity
I just finished a successful BRRRR and refinanced the property at 65% of the appraisal. I have done this on a chunk of my properties and some are financed even lower than 65%. My bank would allow me to refinance up to 75%, but my current business plan dictates that I pull out only what I have into the property and leave the rest as equity. In my opinion this helps my portfolio stay a little more recessions proof, especially since the majority of my mortgages are a 5yr ARM. The higher equity also helps my net worth. However, I wanted to see what other opinions on this would be. I struggle with equity just being a imaginary number on my spreadsheets when I have the opportunity to put more cash in my pocket if I refinance at 75%. I know that I could use that extra money to get into more deals, but if I make that the standard for my business then I will start to have a portfolio and company that is leveraged at 75% instead of 65%. And that seems to be a bit of a riskier model. I want to make sure my company is around for the long run, but also don't want to miss out on opportunities to grow. What do you guys think?
