Updated about 10 years ago on . Most recent reply
Refinancing a Rental
I recently purchased my first rental in June. I used the BRRR method as I found on BP. I got a great deal paying cash by taking out a Home Equitly Line of Credit on my current home. Now im looking at refinancing the rental home and paying off the HELC. Ive done all the paperwork for the mortgage on the rental and find the closeing cost are $4000. I cant see this as a good investment strategy as I've now paid for closing costs on the original purchase, and now am looking at $4000 to get a mortgage on the home. I plan to shop around as I don't feel this is a good deal. I would like to get a mortgage on the house as the HELC is a fluctuating line of credit at prime +1 and would prefer a 30 year mortgage. Is there any advice for a newbie, I don't think Ive made a bad investment with my current cashflow, but refinancing this home would wipe out all my prfits for the 3/4 of the year.
Thanks in advance,
David
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#1 Personal Finance Contributor
- Rental Property Investor
- East Wenatchee, WA
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#1 Personal Finance Contributor
- Rental Property Investor
- East Wenatchee, WA
Yep - most kinda sidestep that little cost issue with BRRRR or slapping a blanket loan on a portfolio strategy. Equity harvesting or whatever. It's kind of like the after 'surprise' when you flip. What do you mean the IRS and the realtors made more than I did?
The hassles and fees of doing this need to be factored in. Would still be interested in hearing about the details @David Hendry. Thanks for posting!