Cash out refi to buy rental property?
I’m looking at a property in my neighborhood that is turnkey and just dropped down to $115k. I don’t have cash for a 20% down payment, but I was considering doing a cash out refi on my first home (which is already a rental property.) I don’t know much about cash-out refi’s, so let me explain what I think I want to to do, and you all can tell me how misguided I am! Haha
I owe $80k out of the original purchase price of $92k on my first house, but I think I could easily refi for $110k-$120k. The result would hopefully give me enough cash in hand to put 20% on the new property and cover closing costs. Would this be a good way to acquire my 2nd rental?
I appreciate any feedback!