Should I Cash Refi in today's rates?

[Dolev Shemesh]

Hello,

I have few properties that I own outright and some leveraged. I'm interested in getting a cash refi @ 30% LTV on my outright-owned properties (est. properties value is about $300k), so $90k in cash in order to scale up and buy more investment single or multi family properties. Does today's rates makes sense for doing that? I have a leverage capital company saying that they could in the mid 7% at the moment.

Thoughts? 

Thank you

[Mike Singer]

Do you have a deal in place? If you can put that cash to work immediately I would definitely take the cash. There's a corny saying going around the lending community right now. "Date the rate, marry the house". You can always Refi the mortgage if rates go down. If you've got a good deal, go for it!

[Dolev Shemesh]

I don't have a deal in place but I'm eyeing a couple atm. And yes that's what I thought as well, especially if my current collected rents on these properties are covering more than the (expected) mortgage after the cash refi. Now i'm also trying to fins some private lenders that will be willing to do a cash refi for less than $250k. 

@Mike Singer - Thank you for your help 

[Matt Cartwright]

Hi @Dolev Shemesh we provide C/O on investment properties and with that low of an LTV you could probably see rates around mid 6's

[Mike Singer]

You shouldn't have trouble finding a Cashout deal below $250k. DM me if you'd like to chat. Happy to provide assistance. 

[Miranda Holland]

It depends. Do you believe rates are going to go back down, stay the same, or go up? If you believe rates are going to continue to rise and you want to cash out, then you might want to do so now. 

[Ricardo Hidalgo]

Higher rates typically means you have to holder a higher equity position to have the same cash flow. Refinancing could affect your numbers. you could always do owner financing for x amount of time to hold a position in the property and see if rates drop again in the course of a year.

[Issac San Miguel]

I would cash it out on a 3 yr prepay. Rates likely in the 7s at that low of an LTV.

[Timothy Hero]

It's better to pay 7% on a refinance and buy more properties with it than to have the cash sitting in the home doing nothing.

Also, I have a lender doing mid 6's for 75% LTV. 30% LTV? You'd be at the floor rate, which is high 5.6%.

[Joe Sitzlar]

Quote from @Matt Cartwright:

Hi @Dolev Shemesh we provide C/O on investment properties and with that low of an LTV you could probably see rates around mid 6's

 Do you offer private lending in near Tampa Florida?

[Matthew Crivelli]

If the numbers work and you need the cash you might as well. You can always refi out 5-10 years down the line if rates go back down. If the rates don't go down in that time frame, then you will be glad you pulled the trigger and refinanced when you did. @Dolev Shemesh

[Matt Cartwright]

Quote from @Joe Sitzlar:

Quote from @Matt Cartwright:

Hi @Dolev Shemesh we provide C/O on investment properties and with that low of an LTV you could probably see rates around mid 6's

 Do you offer private lending in near Tampa Florida?

 We do yes!

[Jay Hurst]

If you are able to a full doc loan and have good credit your rate should be MUCH lower at that low loan to value.  Even if you are looking for a DCSR you should be able to do better then mid 7's. and it has been said, but if you have something to invest the funds in, yes it can make a whole much of sense not to strand that equity.

[Joe Sitzlar]

Quote from @Matt Cartwright:

Quote from @Joe Sitzlar:

Quote from @Matt Cartwright:

Hi @Dolev Shemesh we provide C/O on investment properties and with that low of an LTV you could probably see rates around mid 6's

 Do you offer private lending in near Tampa Florida?

 We do yes!

Matt I bought some houses and properties in Brooksville Fl. 34604, I paid cash for everything including renovations on 2 houses, I now need cash to pay off all of my debts which is approx.60k, I was working with another company previously and they had an appraisal done and property came back at 311k, my plan is to pay off all debts then refi  with conventional loan when my score FICO rises after the credit (now under 611) utilization gets to a respectable level, then use cash from cash out refi  to put down payments on 4plexes

[Jeffrey K.]

Hey Dolev, 

I always think about whether or not to tap into equity as a question of opportunity costs. Boiled down, can I make more money with that money than the interest being charged on the loan. If you can identify a property and execute in a reasonable timeline, its likely worth doing a cash out to scale your business. When you add in the tax benefits, appreciation, principal paydown and cash flow. the likely answer is yes. 

With extremely low leverage, I have most clients getting mid to low 6's right now on a DSCR 30 year. Let me know if I can help run a scenario.

[Alex Bekeza]

@Dolev Shemesh At such low leverage I would say that it's a no brainer to pull out the fresh powder for new acquisitions even with the higher rates. 

[Greg Henderson]

I'd just tie up one property at 75%-80%. Doesn't make much sense to tie them all up and get the same amount of money. If you want or need to do it again later, they're not tied to the loan. I just got a quote yesterday for a cash out refi through a local commercial lender @

5.6% amortized for 12 years for 80% LTV. Balloon at 5 years

or

5.35 for a 5/1 ARM for 15 years at 75%.

1% origination and no additional points.

[Adam Taliaferro]

Quote from @Matt Cartwright:

Hi @Dolev Shemesh we provide C/O on investment properties and with that low of an LTV you could probably see rates around mid 6's

 Do you do business in NJ? If so I’d be interested in connecting..thanks!

[Zach Wain]

@Dolev Shemesh - are you borrowing at 7%?  That is very high.  Do you own your primary free and clear?  Can you get a conventional loan instead of whatever else you are being quoted?  Some quick tips and ideas if you want to leverage and acquire more properties.

1) If your have qualifying income (traditional W2 job, of tax returns showing rental or business income) get a conventional loan.  It will be a lower rate and cheaper financing costs, all day long.

2) If you do not enough qualifying income, than its time to get creative. Do you have a living trust in place? If not, you can do a cash out refi DSCR style with no income, than put those cash assets into a Trust asset account (savings or stock account is perfectly fine), than you can take Trust "distributions" and we can count that is qualifying income for a conventional purchase.

3) Refi your primary home first, that will have a better interest rate than a rental property

If you are concerned about lending rates, conventional loans will be the best deal hands down.